China Woos the 'Trump of the Tropics'
The love affair between Jair Bolsonaro and Donald Trump was in full swing in June on the sidelines of the G20 summit in Osaka. The two presidents, who share a laundry list of commonalities including support for gun rights and hard-line immigration policies, bonded over their mutual distrust of Chinese trade policy. Changes are apparently afoot, however, after Bolsonaro -- who once accused China of trying to “buy up Brazil” -- visited with Chinese President Xi Jinping in Beijing earlier this month.
Brazil would like China to import more of Brazil’s value-added products and to court more Chinese investment in Brazil. One needs look no further than Foreign Minister Ernesto Araújo for a sign of how radically the Bolsonaro government’s China policy has pivoted. Araújo is a fervent admirer of Donald Trump’s and was once a staunch anti-China voice. In fiery posts on his blog, he has accused “Maoist China” of being behind a globalist plot to “rule the world”. In a remarkable contrast, Araújo recently declared that “[Chinese investment in Brazil’s infrastructure] is a useful and helpful presence for us. There are no restrictions on Chinese investment. We want more Chinese investment”.
Araújo has taken considerable pains to insist that the elevated hopes of a U.S.-China trade deal are good news for Brazil. It makes one wonder how much Brasilia fears losing the competitive advantages it has enjoyed during the trade dispute. Whatever the case, Araújo’s 180-degree turn and Bolsonaro’s trip to speak to Xi are just the latest stages of a steady rapprochement between Brazilian and Chinese officials.
Vice President Hamilton Mourão and a number of lawmakers, including Bolsonaro’s eldest son, Flavio, participated in a trip to China that was funded by the Chinese government earlier this year. Since no Brazilian taxpayer money was spent during the trip, lawmakers were able to spin it as a positive exercise in extending bilateral relations between Brasilia and Beijing -- ostensibly with no strings attached.
However, the visit’s itinerary included an invitation to controversial technology firm Huawei -- apparently to assuage any doubts about Huawei’s involvement in Brazil’s 5G program. The tactic appears to have worked. The Trump administration has put extensive pressure on U.S. allies to follow its example in excluding Huawei from development of 5G networks -- but Brasilia pushed back after its cushy tour of Huawei.
Brazil’s deputy government leader in the Senate, Chico Rodrigues, praised Huawei after his return, saying that satisfying Brazil’s technological needs was more important than “concerns over spying.” Rodrigues’s newfound enthusiasm seemed to confirm that Huawei is welcome to expand its presence in Brazil: Huawei plans to build an $800 million factory in Sao Paulo and is reportedly considering forming a joint venture with China Mobile to bid for Brazilian telecom firm Oi.
Meanwhile, another of the Brazilian president’s sons, Eduardo Bolsonaro, has cozied up to paper firm Paper Excellence, which is part of controversial Sino-Indonesian conglomerate Sinar Mas and considered using China Development Bank (CDB) funds to buy shares of Brazilian pulp producer Eldorado. The younger Bolsonaro had previously excoriated China’s lending practices, often seen as predatory. “If you do something China doesn’t like, they can take out all the investment, all the money they put in the country,” Bolsonaro said in June. “We want to keep our sovereignty.” Only a few weeks later, the president’s son posted a photograph of himself on social media receiving an oversized check for 31 billion Reais ($8.2 billion), symbolising future investment in Brazil, from Paper Excellence owner Jackson Widjaja, a worrisome development given the company’s association with China’s Belt and Road initiative. The photo cast doubt on Eduardo Bolsonaro’s commitment to follow through on his pledge to protect Brazil from predatory lending.
Bolsonaro’s recent trip to Beijing, which apparently shocked aides when he announced it, suggests that the Brazilian president has also warmed up to Chinese investment. Bolsonaro’s softening on relations with China is likely to ruffle feathers in Washington, and it might alarm the international community. It comes in the context of broader Chinese expansion in Latin America in parallel to its Belt and Road Initiative (BRI) elsewhere.
China’s strategic investment in South American energy companies is particularly illuminating. China National Petroleum Corporation now holds 20% of Rio de Janeiro’s Comperj refinery, while China’s State Grid Corporation paid more than $4 billion in 2016 to buy a controlling stake in energy generation company Companhia Paulista Força e Luz.
To make matters worse, some of Beijing’s investments are in highly sensitive infrastructure projects. Bolivia’s national ‘emergency response system,’ for example, was developed by a Chinese company and financed with a loan from Beijing. If Brazil allows Huawei a key role in rolling out its 5G network, as now looks likely, Washington may take that a sign of where Brasilia's loyalties lie.
There’s little doubt that Brazil’s relationship with China would be adversely affected if Bolsonaro chose to side with Trump on sensitive security and geopolitical issues. It remains to be seen whether Brazil will embrace a deeper collaboration with China on trade, infrastructure and technology deals or will take a more tactical approach that won’t alienate its Western allies.
Steve C. Sherman is a writer, radio commentator, former Iowa House Republican candidate, and the author of “Mercy Shot” (Ancient Path Publishing, 2013). The views expressed are the author's own.