Brazil and China are looking forward to a new cycle of development.

Since the beginning of this century, bilateral relations between Brazil and China have gained momentum and become one of the most important in the world. The initial milestone in this new relationship was President Luiz Inácio Lula da Silva's trip in 2004, during his first term, to visit then-Chinese President Hu Jintao. That moment resulted in robust gains for the Brazilian economy, which benefited from the increased value of soybeans and iron ore, thanks to Chinese demand.

Brazilian economic growth reached over 7% in 2010, but lost momentum in subsequent years, and a recession arrived in 2016. Today, however, Brazil has reason to be hopeful for an improved economic situation. The Brazilian president is the same as during that period, now in his third term, maintaining his vision regarding the prevalence of strategic interests in relations with emerging countries, such as China. And the Chinese economy has returned to growth and is showing strong demand for food and minerals.

Therefore, China Radio International (CRI) interviewed three experts to understand what paths both countries should take to resume win-win relations. One of them is Melissa Cambuhy, coordinator of international cooperation between Brazil and China at the Lula Institute. She says that China has much room to grow in the construction sector. "There is still ample room for accumulation provided by the advanced, but still incomplete, Chinese urbanization process, which has high demand from young people and families still interested in acquiring real estate."

She states that, to revive the construction industry, the country has implemented several measures to encourage home purchases, such as changes to the one-per-couple policy, generous credit lines, and more flexible mortgage terms. "Considering this potential and the measures to stabilize the real estate market and stimulate the economic development of urban areas and their potential consumers, state policies are creating a favorable scenario for the sector," explains Cambuhy.

Javier Vadell, director of the postgraduate course in Contemporary China at the Pontifical Catholic University of Minas Gerais (PUC-Minas), emphasizes the importance of Chinese social transformation in this process. “The expectation is that in the coming years, we will see the middle class jump from 400 to 800 million people. That's four entire 'Brazils' in terms of people consuming food and other goods derived from minerals. The Brazilian economy will benefit from this.”

He warns, however, against complacency. “Economic relations with China are good. During the Bolsonaro administration, contracts were fulfilled, and exports and imports proceeded normally. The question is what role Brazil will play in this relationship: a seller of soybeans and ore, or a collaborator in the development of high value-added products. China can help, but Brazil is the one that makes the main choices about this. The direction the productive sector chooses will determine whether China buys soybeans, iron ore, semiconductors, airplanes, robotics.”

Cambuhy is critical of a segment of the Brazilian productive sector. “Another challenge to the sophistication of Brazil-China productive-commercial relations lies simultaneously in internal class contradictions – where the short-term interests of agribusiness end up prevailing, to the detriment of tactics with a longer temporal reach.” Vadell, in turn, warns that there is competition in this sector and that Argentina already has China as its main trading partner. “Argentinians are not limiting themselves to cattle farming, which is the country's historical international product. They are manufacturing lithium batteries for electric cars, for example.”

Researcher Marco Fernandes, from the Tricontinental Institute for Social Research, explains that Chinese growth is solid. “The IMF (International Monetary Fund) has already indicated that China should grow by more than 5% this year, amidst a global average of less than 3%, with US growth at 1,5%. Chinese companies raised $8 billion on the stock exchanges, while American companies raised around $4 billion.”

Fernandes is emphatic in stating the dependence of the Western economy on emerging countries. "The West and its allied countries create all sorts of controversies, but when it comes to making money, they turn to China."

He concludes that the Brazil-China relationship is one of the great promises for 2023. “Lula’s visit to China should take place in March, for the first meeting with Xi Jinping. It will be important for the advancement of economic relations. Trade exchanges that transcend iron ore, crude oil, soybeans, and meat, which today represent 90% of Brazil’s exports to China. The quality of exports needs to be improved,” Fernandes adds.