Can China repeat what it did to Australia and retaliate against Brazil?

Who has the most to lose from this friction?

According to experts heard by BBC News Brazil, although, in fact, China currently has few alternatives to buy from except Brazil, the possibility of imposing trade barriers on Brazilian products cannot be completely ruled out, even if this decision is hinders. .

In this regard, they say, the view is erroneous that, due to the codependent relationship between the two countries, which was further strengthened during the coronavirus pandemic, Brazil could “test the patience” of its largest trading partner without non commitment. risk.

Furthermore, in this arm wrestling, Brazil will tend to “lose out”, they add.

“The Chinese government is unpredictable. Of course, there could be retaliation. Nothing would prevent the Chinese from taking it. China has large stocks of these raw materials. Of course, it would suffer, but if it believes that the cost benefit of this measure is worth it. “It will. It happened recently with Australia,” says a source closely following the issue, who preferred not to be identified.

“There is no point in taking an ‘unnecessarily confrontational’ stance with our main trading partner. Besides not bringing any immediate benefits, this could jeopardize a long-standing friendly partnership,” he adds.

This year, China took economic retaliation against Australia, of which it imports most of its iron ore and one of its main trading partners, when Australian authorities called for an international investigation into the origin of the coronavirus.

Beijing lifted partial barriers to Australian beef, taxed the country’s barley import by 80% and deterred Chinese from studying or traveling in Australia due to “numerous instances of discrimination against Asians.”

According to World Bank data, Australia is the sixth exporter to China, ahead of Brazil, which appears in seventh place.

China has been Brazil’s main trading partner since 2009, when it overtook the United States.

Since then, it has been buying more and more, being the main destination for Brazilian products.

As it buys much more than it sells to Brazil, the Asian giant contributes to keeping the Brazilian trade balance in blue, the so-called surplus (when exports exceed imports).

From January to October, for example, China, which bought 10% more from Brazil compared to the same period last year and accounted for 65% of the Brazilian trade surplus (US $ 30 billion out of US $ 47 billion) .

Almost ten years ago, in 2011, this rate was 39%, according to the Foreign Trade Indicator FGV / IBRE (Icomex).

China represented 30% of the value exported by Brazil this year. The United States of Donald Trump, with whom the Brazilian government has the greatest ideological affinity, only 10% of the total, 30% less than in 2019.

In other words, our dependence on China has increased.

But China has also become more dependent on Brazilian raw materials.

To supply its huge domestic market, the Asian giant’s appetite for products such as soybeans, meat, iron ore, sugar and cellulose has grown, and Brazil has gained ground in the face of international competition as a supplier of these resources.

This was due to a combination of factors, including our agricultural production capacity, the sharp devaluation of the real – of around 40%, which made Brazilian raw materials cheaper in the international market – and the friction between China and the United States. States during the Trump presidency.

“In fact, China depends on Brazil in some specific sectors, as is the case in a very marked way for soybeans and meat. But in reality this was due to an external scenario that favored Brazil, because our competitors began to suffer retaliation China’s policies, as was the case in the United States, “Tulio Cariello, director of content and research at the Brazil-China Business Council (CEBC), told BBC News Brazil.

“So it was much more a logic of space occupation than necessarily a development of Brazil’s trade relationship with China,” he adds.

One of the most iconic examples is soy.

From January to October, Brazilian soybean shipments to China reached almost 60 million tons, 18% more than in the same period last year.

In September alone, Brazilian soybeans accounted for 75% of all oilseed imports from China, while US soybeans, our main competitor, took only 12%.

According to experts heard by BBC News Brazil, despite the fact that, in the short term, due to both domestic and foreign circumstances, the Chinese do not have much option to import non-Brazilian products, in the long run the situation is different.

“The Chinese are looking for new suppliers for these products,” says Cariello, who cites Chinese investments in Eastern Europe and Africa.

“This idea of ​​long-term thinking is part of the genetic material of the Chinese government,” he adds.

In a recent interview with BBC News Brazil, retired diplomat Roberto Abdenur, who served as ambassador to Beijing (1989 to 1993) and the United States (2004 to 2006), shared a similar opinion and also criticized the Brazilian government.

“It is an illusion to think that China will continue to depend on our imports forever. There are other countries in the world. China is financing important agricultural projects in Africa, in regions that have a climate and soil similar to those of Brazil, it is also in talks to increase soybean production in Russia and Ukraine, “he said.

“Brazil is putting its feet in its hands in an unreasonable and counterproductive way. Eduardo Bolsonaro speaks as a deputy, as the son of the president and as president of the Chamber’s Foreign Relations Committee. He is immensely irresponsible, now he threatens to cause serious harm to the interests of Brazil with China ”, he added.

For the economist and diplomat Tatiana Rosito, former executive secretary of the Foreign Chamber of Commerce (Camex) and former representative of Petrobras in China, “codependency is delicate and brings risks for both parties, who must mitigate these risks with long-term understandings.”

“Brazil does not care to depend only on China and it does not matter to China to depend only on Brazil,” he says.

Rosito is the author of a recent study in which she proposes that Brazilians see their Asian partner less and less as a competitor and threat, and increasingly as a reference and an opportunity.

The document, titled Basis for a long-term strategy from Brazil to China, was launched in late November at an event attended by Vice President Hamilton Mourão.

Remember that China is one of the countries that invests the most in biotechnology, so “unnecessary disagreements can close the door to opportunities,” he says.

Speaking of opportunities, Cariello reminds that Brazil must diversify its exports with China.

“Although this is difficult, Brazil can diversify exports in a sector in which it is already competitive, such as agribusiness. Brazil’s focus is on commodified meats, but not on the premium market. Australia, States and New Zealand have traditionally managed to sell this type of product to China, “he says.

In the new episode of crisis with the Brazilian government, the Chinese Embassy in Brasilia raised the tone by threatening Brazil “with negative consequences” in a note against the posts on Twitter by Eduardo Bolsonaro, who in addition to being a deputy is the son of President Jair Bolsonaro and president of the Chamber’s Foreign Relations Commission.

Commenting on Brazil’s adherence to a US-sponsored alliance against the use of 5G technology by the Chinese company Huawei, the parliamentarian directly accused the Asian country of espionage.

“The government of Jair Bolsonaro has declared its support for the Clean Network alliance, launched by the Donald Trump administration, creating a global alliance for a secure 5G, without spies from China,” Eduardo Bolsonaro wrote on Monday night (11/23). ).

“The program that Brazil has joined aims to protect its participants from invasions and violations of the private information of citizens and companies. This occurs with the repudiation of entities classified as aggressive and enemies of freedom, such as the Chinese Communist Party”, also added on Twitter. the president’s son.

The Chinese embassy, ​​which generally protests only with the authorization of the government in Beijing, issued a tough note, even though the deputy had already deleted the post.

The statement described Eduardo Bolsonaro’s speech as “totally unacceptable” and threatened Brazil with retaliation if the parliamentarian and “other personalities” did not abandon “infamous statements that, in addition to disrespecting the facts of Sino-Brazilian cooperation and the mutual benefit that it provides, undermines the climate of friendship between the two countries and damages the image of Brazil. “

We urge these personalities to stop following the rhetoric of the American far right, to stop the misinformation and slander about China and the Sino-Brazilian friendship, and to avoid going too far down the wrong path, in view of the interests of both parties. peoples and the general trend of bilateral association. Otherwise, they will bear the negative consequences and the historical responsibility of disturbing the normality of the China-Brazil partnership, ”the note also says.