RIO DE JANEIRO —
As the world’s two largest economies vie for influence in South America, Brazil sits at the heart of the global power struggle. The choices the country makes in the coming years could reshape the region’s economic and political trajectory, according to analysts.
Chinese President Xi Jinping’s recent visit to Brazil for a state visit and the G20 Summit marked the 50th anniversary of diplomatic ties between the two countries and underscored Beijing’s expanding influence in South America amid intensifying U.S.–China competition.
Xi’s visit resulted in 37 trade and diplomatic agreements with Brazilian President Luiz Inácio Lula da Silva. These agreements spanned agriculture, renewable energy and infrastructure development, signaling a closer partnership between the world’s second-largest economy and Latin America’s largest nation.
“Brazil has the biggest Chinese investment in the Global South. Lots of Chinese money here,” said Mauricio Santoro, political scientist and international relations expert, and author of Brazil-China Relations in the 21st Century, in an interview with VOA.
“And the Chinese and Brazilians are backing a lot of the development of green technologies, wind power, solar power. So, there’s huge potential in that.”
During the visit, Xi and Lula discussed strengthening economic cooperation between China and Brazil, as well as addressing key global issues, including trade, sustainable development and geopolitical challenges. Despite the sheer volume of agreements, experts suggest that many were largely symbolic, focusing on reaffirming commitments rather than enacting concrete policies.
“Signing 37 agreements is huge. It’s likely they won’t have practical effects in the near term,” Livio Ribeiro, an expert on Sino-Brazilian trade, told VOA. “Most of them are very broad and unspecific. Though, linkages are being tied up. They are getting stronger. I think that’s the point.”
China’s expanding influence
China has cemented itself as Brazil’s largest trading partner, with bilateral trade valued at close to $160 billion in 2023. Trade between the two countries has increased by nearly 10% in the first 10 months of 2024, reported China’s state news agency, Xinhua. Over the past decade, Chinese investments in Brazil, particularly in energy and infrastructure, have surged.
As China deepens its footprint in South America, the United States has emphasized soft power strategies, particularly in combating climate change — a central element of Lula’s international agenda. The Biden administration increased its climate finance to $11 billion annually and contributed $50 million to Brazil’s Amazon Fund.
However, analysts say China’s rise poses challenges to U.S. influence in South America. Bilateral currency agreements between Beijing and countries such as Brazil and Chile enable trade in Chinese currency, the renminbi, gradually undermining the dollar’s dominance in the region.
“Most American administrations look at Latin America as a problem. As a source of instability, of undesirable immigration, organized crime, border troubles and so on,” said Santoro. “But when China looks to Latin America, it basically sees opportunities.”
The Trump factor
The incoming Trump administration may shift the dynamics of U.S.–China competition in the region, and Trump’s proposals, including a possible sweeping tariff on Chinese imports, could alienate South American nations and draw them closer to Beijing, according to experts.
“As we have Trump coming into office in January 2025, the balance of power will change,” Ribeiro told VOA. “And for me the great question is whether Trump, knowing and understanding that he’s losing Latin America, if he will try to regain it or he’ll just let it go.”
He said higher interest rates in the U.S. and a stronger dollar may exacerbate economic challenges in South America, devaluing local currencies and increasing borrowing costs. Such volatility could make Chinese partnerships more appealing.
Chinese officials “don’t believe that Trump will be able to build good relationships with the leaders of these countries,” Santoro said.
Brazil’s balancing act
President Lula has maintained a careful approach, strengthening ties with China without alienating the United States. His decision not to join China’s global infrastructure project, the Belt and Road Initiative (BRI) reflects a strategy to preserve Brazil’s diplomatic flexibility, experts said.
“That’s the precise way Brazil should deal with it,” Ribeiro told VOA. “Because he [Lula] did not sign the Belt and Road Initiative. Therefore, the U.S. can’t say that we are going into the opposition.”
Analysts note Brazil can potentially still benefit from the BRI project — for example through a proposed Brazil-Peru transcontinental railway that remains in the planning stage — while balancing diplomacy between the global rivals, analysts said.
“We are trading more and more [with China]. We are using infrastructure. We are receiving Chinese money. So, the integration that comes along with the Belt and Road is reaching us,” said Ribeiro.
Some experts see opportunities for Brazil in the U.S.–China rivalry.
“If China is suffering economically with the imposition of U.S. tariffs, it could quite possibly make a deal with Brazil to bring the trade to us, using our established trade partnership,” said Brazilian writer Sergio Farias in an interview with VOA.
“I think there’s a great possibility of Brazil benefiting from this.”
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Publish date : 2024-11-22 08:14:00
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