Brazil Cements Chinese Ties During Official Visit

From 12 to 15 April 2023, Brazilian President Lula da Silva, who is affectionately called Lula, was on four-day official visit to China. He was accompanied by a large delegation comprising of ministers, state governors and business leaders.

Brazil is the largest country in Latin America with a population of 217 million. Currently, China is the top trading partner for Brazil while Brazil is the 10th largest for China. In 2022, bilateral trade volume reached USD 172 billion, up nearly 27% year-on-year.

Brazil exported goods worth about USD 70 billion to China while China exported more than USD 100 billion to Brazil. The main exports from Brazil to China are iron ore, crude oil and a number of agriculture products such as soybean, beef and chicken. On the other hand, China exports to Brazil consist of electronic goods including mobile phones, semiconductors and pesticides.

Previously, China financed and built the Belo Monte power transmission project and a water desalination plant in Joao Camara. During this trip, the two countries signed 25 agreements covering areas such as Currency Swap, #5G, #Cybersecurity, Semiconductor Manufacturing, #SpaceTechnology, #GreenFinance, to name a few.

It is worth noting that both Brazil and China form part of the #BRICS which has just surpassed the #G7 in terms of combined GDP. The BRICS created their own Development Finance Institution called New Development Bank (NDB) which is headquartered in Shanghai. Coinciding with Lula’s visit in China, the former Brazilian President Dilma Rousseff officially took office as the new rotating chair of the bank.

In his speech for the occasion, President Lula called for the conduct of trade and investment in the currencies of the countries concerned. Given the new heft of the BRICS bloc, the statement sent shockwaves to Washington as the trend toward dedollarization seems to gather momentum.