International Observatory of the Maurício Grabois Foundation defends China’s Belt and Road Initiative

As one of those great coincidences in history, the first words about what would become the New Silk Road, whose official name is the Belt and Road Initiative (BRI), were spoken by President Xi Jinping on September 7, the same day that Brazilian Independence Day is celebrated. The year was 2013, and while Brazil was still beginning to have to deal with the bitter effects of the electoral use of the June days of that year, which would open the door to a Trojan Horse. The unfolding of such a movement would remove a government elected through a parliamentary coup (in 2016), making vulnerable the country’s attempts for autonomy and leading Brazil to the worst economic recession in its history.

In contrast, on that very same day, China through Xi’s speech at the University of Nazarbayev in Kazakhstan, in the heart of Central Asia, unveiled the outline of a proposal to carry out policy coordination, infrastructure integration, trade densification, financial integration and closer ties to unite countries between Asia and Europe, in a region that had previously been the Silk Road. The following month, President Xi speaking in the Indonesian parliament emphasized that the Initiative being proposed would be broader than Central Asia and would also include maritime union between countries for mutual prosperity. However, it would be two years later, in 2015, that China’s National Development and Reform Commission (NDRC), together with the Ministry of Commerce and the Ministry of Foreign Affairs, would publish a founding document of the BRI called ” The Vision and Actions on Jointly Building the Silk Road Economic Belt and the 21st Century Maritime Silk Road.”

Unlike most free trade or mutual defense agreements that have a single, legally binding text for all countries that wish and are accepted, the Belt and Road Initiative is characterized by a more fluid form of agreement and binding. Countries or multilateral organizations participate in the BRI through Memorandums of Understanding with priorities for cooperation with the People’s Republic of China. Among the principles contained in these Memoranda are that of self-determination and cooperation for the common good. In other words, this does not create any suppression of sovereignty, does not generate mandatory diplomatic ties or alignments. On the contrary, it is precisely its flexibility and joint decision by countries regarding the investments to be made that explains the rapid expansion of the BRI, which refutes the current discourse that there is an alleged controversy between membership or synergy. Now, beyond the euphemisms, the agreement is flexible, and the decision is joint, therefore it is a matter of cooperation.

For this reason, more than 150 countries is already participating in this Initiative, 17 of which are in the European Union. Several member countries of military cooperation organization with the United States, such as members of the North Atlantic Treaty Organization (NATO) have also signed such memoranda with China, becoming part of the BRI. In South America, almost all countries had decided to participate by 2023, and with Colombia’s decision in 2024, only Brazil and Paraguay remain outside the Initiative, with Paraguay not recognizing the People’s Republic of China, having maintained diplomatic relations with the government established in Taipei for a long time. In these 11 years, the New Silk Road projects developed under this Initiative have involved investments of more than 1 trillion dollars.

In 2024, Brazil and China will celebrate 50 years of fruitful diplomatic relations. Thirty years ago, they reached the level of Strategic Partnership and, with the creation of the Sino-Brazilian High-Level Commission for Consultation and Cooperation (COSBAN) in 2004, the two countries joined forces in 2006 to form BRIC, and the level of bilateral relations between Brazil and China was elevated to the level of Global Strategic Partnership in 2012. At the recent BRICS Plus meeting, the BRICS Plus confirmed its vocation to be the main basis for a multipolar global reorganization in favor of autonomous sovereign development projects.

There is currently a public debate in Brazil, albeit timid, about the opportunity and convenience of participating in the New Silk Road. In addition to the already established participation of several countries, especially almost all South American neighbors, there are economic and political arguments that support the opinions expressed on the subject. At a time when economic integration has ceased to be the only relevant concern for the foundation of international relations, especially of hegemonic countries, protectionism and the issue of geopolitical dispute are reemerging, with the United States and its allies seeking to reduce the intensification of relations with the People’s Republic of China while at the same time fighting to prevent its access to the most advanced technologies. This geopolitical dispute has been one of the main arguments used in Brazil by opponents of Brazilian participation in the Initiative, to argue that it would not be in the country’s interest to participate in the BRI because this could attract discontentment and even opposition from the United States, also an important Brazilian trading partner and still the largest military power in the world today.

It must be said that the dozens of countries that take part in the BRI, many of them small and much more fragile, were not so apprehensive. Furthermore, exercising international protagonism implies making choices, knowing their implications. It is not about ideological alignment, but rather about evaluating the benefits to Brazil’s position on the international scenario and its contributions to its national development. In a world in transition, with several hotbeds of conflict and tension, both real and potential, this is even more delicate. However, it is necessary to be clear about one’s own national interests, firmness and assertiveness for those who want to exercise some leadership, including in important bodies such as the BRICS Plus or as a candidate for permanent member of the UN Security Council.       

In this context, the International Observatory of the Maurício Grabois Foundation (FMG), an institution made for reflection and systematization of knowledge maintained by the Communist Party of Brazil (PCdoB), with this synthesis report, participates in the debate and presents the elements it considers most important for this discussion. Starting from the centrality of the Brazilian New Development National Project, through which it is intended that the Brazilian people achieve a substantial increase in their material and spiritual standard of living, and walk the path towards Socialism in our homeland, the FMG brought together experts on the subject and systematized the debate in order to present the issues that it considers to be the most pressing that should guide the Brazilian decision. This is a subsidy that is now presented here to the Brazilian society, especially to decision-makers in the leadership of the Brazilian State, so that it can be used as a guide for the discussion on the opportunity and convenience of Brazilian participation in the Belt and Road Initiative.

China’s situation has changed greatly since the start of the Reform and Opening-Up in 1978, which was initially led by President Deng Xiaoping. From an economy that was still relatively backward compared to the major capitalist powers, the country has become one of the world’s two major economic powers in a few decades. In this sense, the success of Deng’s policies also showed its temporal limitations, with the exhaustion of several initiatives, which made President Xi Jinping propose new solutions for a new time, at the beginning of the last decade. China’s attempt to change its level of development in the early 2010s, after the crisis of the subprime, caused great consternation in the United States, which believed that China would become more subordinate after accession to the World Trade Organization. Thus, the current moment is one of great friction between the US power and the Asian giant and also with Russia. In this sense, the U.S. has pressured several partners and allies to distance themselves from relations with China, even to the point of causing harm to these allies, as was the case with the Dutch company ASML, which saw its profits plummet after refusing to export machines for manufacturing chips to the Chinese.

The discussion about Brazil’s participation in the New Silk Road takes place in this context of international geopolitical rivalry. Since our country is in Latin America, a region in which the U.S. exercises strong hegemony, there is fear of fraying relations with that country, which in addition to being an important economic partner would have great power of political and military destabilization, a fact already seen in several regional situations. Regarding the prospect of the geopolitical situation, it is not to be expected that the U.S. positions will cool down on a visible horizon, since the signs are clear of preparation for a long period of rivalry. One way to measure this reality is through articles published by the U.S. intelligentsia in the field of international relations and defense in high-level debate journals in that country, such as Foreign Affairs. Such a situation is complicating Brazil’s foreign relations: the issue of Brazilian participation in the BRI could have been openly discussed on President Lula’s visit to China in March 2023, however, the internal political polarization in Brazil delayed it. At that moment, the extreme rightwing forces of Brazil were fueling fear against China, in a context in which they had tried to carry out a coup d’état on January 8 of the same year, inspiring caution on the analysis of convenience and opportunity of joining BRI.

Still on the geopolitical issue, it is necessary to conduct a sober analysis of the possible implications of Brazil’s participation in the BRI. Although many believe that Brazil’s participation in the New Silk Road could be seen as an alignment and that this could create friction with the U.S. that could undermine Brazilian stability, it is worth considering that the BRI does not have any provisions for mutual defense or even political alignment, and that it focuses on cooperation for development. In fact, Brazil is part of a questionable mutual defense agreement with the U.S., and there is currently no serious discussion of its denunciation. By deciding to participate in the BRI, what Brazil would be doing is maintaining its tradition of independence and autonomy in foreign relations, of long traditions, dialoguing with various poles with a focus on national self-determination and non-interference in the internal affairs of other countries. In fact, countries with excellent relations with the U.S., such as Austria, Chile, Costa Rica, and Saudi Arabia, including most of the South American countries already mentioned, are already part of the Initiative, without this having in fact shaken relations with the U.S..

On the other hand, the geopolitical rivalry between the U.S. and China has produced situations in which an eventual participation in the BRI tends to benefit Brazil: the U.S.’s attempt to disengage from direct economic complementarity with China by seeking nearshoring as an alternative. This is a strategy in which, instead of buying Chinese products, the U.S. seeks alternatives in countries that are closer or more friendly. Countries such as Mexico and Vietnam have become major beneficiaries of this policy. However, there is no shortage of examples in Brazil as well. A large Chinese manufacturer of heavy machinery has used its factory in Brazil as a platform for exports to the U.S. market. Since U.S. tariffs and restrictions have some operational limitations of their own so as not to completely impede trade, loopholes like these can further help Brazil attract Chinese companies for which there are no sales restrictions in that market. For this, Brazil’s participation in the New Silk Road can be of great value, and such potential for generating jobs, income and technology transfer cannot be ignored.

The issue of Brazil’s eventual participation in the BRI must be guided by the national interest and the perspective of building and implementing a New Development National Project. Consequently, it is necessary to negotiate with China on terms that are favorable to our country. In several countries, participation in the BRI has led to increased Chinese investment as well as increased trade density. In the case of Brazil, these advantages cannot be given in a small way given the size of its economy and its geopolitical importance. On the contrary, Brazil needs to make a bold proposal for consideration by the Chinese side. However, if there are any further delays, the right moment for a discussion that would have real advantages for Brazil could be lost. Likewise, one cannot think of a possible participation in the Chinese Initiative without Brazil being clear about its interests and putting them forward clearly and with tangible goals for the Chinese partner. Brazil is a great country on the regional and world stage, and this allows it to negotiate at high levels, but for that it is necessary for Brazil to know what it wants.      

Thus, the experts gathered by the International Observatory of the FMG propose that Brazil should not shy away from discussing a possible participation in the New Silk Road. But that such discussion should be held at a high level, focusing on mutual gains, with clarity on Brazilian interests and seeking to maximize the opportunities arising from it. In this sense, there are four important issues to be discussed with China:

1) intensifying cooperation in Science, Technology and Innovation (STI), involving public and private STI institutions, as well as companies, from Brazil and China, especially in strategic areas such as renewable energy, biotechnology, bioeconomy, regenerative agriculture, transportation, civil aviation, low-carbon economy and new information and communication technologies, and choosing priorities, such as artificial intelligence. The experience of the Sino-Brazilian Earth Resources Satellite (CBERS) agreement, signed in 1993, shows that these initiatives can be successful;

2) define and implement investment projects, in partnership with China, to boost, reinforce and complement the Brazilian strategy of reindustrialization on new technological bases in alignment with the New Industry Brazil (NIB), through its six missions that include the sectors of infrastructure, housing and mobility, agroindustry, health industrial complex, digital transformation, bioeconomy and energy transition, and defense technology;

3) create the conditions for increasing the complexity of bilateral trade, including the increase in Brazilian exports of higher value-added products;

4) promote South American integration, with the participation of China and its capacity for design and financing, especially in the construction of infrastructure, through the definition of priority projects, including the purchase of inputs in Brazil and the South American region.

In other words, Brazil needs to be clear about the role of the global strategic partnership with China in its New Development National Project, and it should know how to replicate, without automatic alignments, strategies that Brazil itself used in its industrial start-up, adapted to the times, including joint ventures, commitments to technology transfers, obligations regarding investments and innovation, while also ensuring sectoral conditions for development and access to new technologies.

After establishing these major priorities, it is necessary, based on a Brazilian project to accelerate development and seek national autonomy and regional integration, to develop them into concrete initiatives with deadlines and goals. It is well known that the Memoranda of Understanding signed within the scope of the BRI are generally succinct and deal with cooperation in a generic way. It is possible, however, to prioritize the most important sectors in a broad way and, later, in the work plans, to focus on increasing the details to make the agreed projects feasible. This should be Brazil’s strategy in a discussion about participation in the BRI: to focus on Brazilian interests. To achieve this, it is essential that the Brazilian government, as well as the business sectors, be aware that it is possible and desirable to use this opportunity as a lever for sustainable development and the pursuit of greater national autonomy. To achieve this, it is necessary to overcome some mental barriers that have been placed on some of the Brazilian leadership in various sectors, who believe that it is wise to give up any search for strategy and planning for the country’s development. On the contrary, it is necessary to demonstrate the need for sustainable development that reduces social and regional inequalities, and this can only happen with a bold strategy of diversifying opportunities.

Last but not least, it is necessary to calculate the possible cost of Brazil’s non-participation in the BRI. Like everything in politics, there is timing and implications. If Brazil does not participate in the project, it would be giving up Beijing’s most important diplomatic initiative, a partner with which there are great synergies. Brazil would find itself outside of an initiative that involves more than 150 countries, and which is promoted by a strategic partner of BRICS Plus. Brazil would not be part of important decisions on effective infrastructure projects related to South American integration, since, except for Paraguay, all its neighbors in the region already participate in the BRI. And finally: to what extent would Brazil’s non-participation guarantee U.S. non-interference in Brazilian domestic affairs? In international relations, only those who are bold in the defense of their own national interests are respected.

In short, this is undoubtedly a decision that is as complex as it is important. The fact is that decision-making, in favor or not, will have implications. And, of course, our national project depends on clarity about the direction of international transformations. Historically, international insertion has been decisive in the trajectory of countries. With Brazil it was not, is not, and will be no different.