Lula's China visit to refresh Brazil ties with pragmatic approach

FILE PHOTO: Luiz Inacio Lula da Silva takes office as Brazil's President in Brasilia

By Anthony Boadle and Lisandra Paraguassu

BRASILIA (Reuters) - Brazilian President Luiz Inacio Lula da Silva heads to China this weekend for a five-day visit to refresh relations with his country's largest export market and seek new Chinese investment in the Latin American country.

Lula will meet with Xi Jinping on March 28 in Beijing, the first foreign leader to visit the Chinese leader since he secured a precedent-breaking third term as president.

The trip to China comes less than two months after Lula met with U.S. President Joe Biden at the White House, as Brasilia aims for a pragmatic foreign policy balancing ties with its top trading partners despite growing tensions between the two.

"Brazil has to keep a flexible and pragmatic position in this dispute between China and the United States," said Senator Hamilton Mourao, who as Brazilian vice president met with Xi in Beijing in 2019. That made him a key conciliatory voice on China in the government of former President Jair Bolsonaro, whose ideological base cheered his diplomatic spats with Beijing.

Lula is traveling with a large delegation that includes a half dozen cabinet ministers, plus governors, lawmakers and 240 business leaders, over a third from Brazil's farm sector, which sends the lion's share of its beef, soybeans and wood pulp to China. Lula will also visit Shanghai later in the week.

Foreign Ministry officials said Brazil wants to diversify its trade with China beyond iron ore, soy, oil and meat exports, with preparations to sign agreements on technology, innovation and sustainable development.

In an early positive sign, China resumed on Thursday imports of Brazilian beef that had been suspended for a month after an atypical case of mad cow disease was diagnosed in Brazil.


Lula drew Brazil closer to China and traveled twice to Beijing during his two presidential terms from 2003 to 2010.

This visit comes after a period of rocky relations under Bolsonaro, who campaigned for office using anti-China rhetoric that continued into his first years in government, when his lawmaker son blamed China for the COVID-19 pandemic.

A senior government official told Reuters many people, including former Vice President Mourao and members of the Agriculture Ministry at the time, "tried to avoid disaster" and stop things from spiraling into an ideological war."

Trade relations were not affected by the diplomatic storm, though Chinese investment stalled, due in part to the pandemic preventing China's executives from visiting Brazil. Trade experts said Chinese investors did not feel welcome under Bolsonaro.

Marcos Caramuru, a former Brazilian ambassador in Beijing, previously told Reuters his country at first benefited from the U.S. trade war with China under former U.S. President Donald Trump, but he lamented that Chinese investment in Brazil lost steam for a few years.

By 2021, investment by Chinese companies in Brazil recovered to the level of 2017, according to the China-Brazil Business Council, which forecasts steady growth in coming years.

Beijing has kept open relations with Brasilia whatever the political color of the government in power, but China prefers to invest when local authorities are more friendly, Caramuru said.

China overtook the United States as Brazil's top trading partner in 2009 and Brazil is the today the largest recipient of Chinese investment in Latin America, driven by spending on high tension electricity transmission lines and oil extraction.

During the Bolsonaro presidency, many Chinese companies paused plans with the federal government and instead pushed ahead on business with state governments, especially in the less affluent northeast where Lula's Workers Party is strongest.

New Chinese projects include Latin America's largest bridge in Salvador, Bahia and, more recently, plans to build electric vehicles at a former Ford industrial complex there, potentially mining lithium nearby and producing batteries for export.

(Reporting by Anthony Boadle and Lisandra Paraguassu; Editing by Brad Haynes and Aurora Ellis)