A rising Brazil and the US-China relationship
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Brazil is determined to expand its trade out of South America and to become one of the US and China's trade partners. The efforts may relieve the trade tensions in the US-China relationship caused by the massive US trade deficit, China's industrial transformation and trade barriers. The US has made reducing trade barriers with Brazil a priority and anticipates a sharp increase in bilateral trade volume in the near future. Meanwhile, Chinese manufacturing companies are transferring production from expensive coastal provinces in China to Brazil. In the aviation sector, as Brazil agreed to purchase an order of US Boeing aircraft, China is preparing to buy 35 planes from the Brazilian Embraer. Brazil has also showed great interest in developing renewable energy, which both the US and China have been heavily investing in. These overlapped interests would expand market to a new scale that could increase the economic mobility and employment opportunities in all three countries, and reduce tensions accordingly.
But Brazil's engagement in natural resources may pose pressure on the US-China relation. Agreements signed over the past two month show both countries are expanding their investment in Brazil's oil industry. China's state-owned oil companies' overseas investments and Chinese state banks' financial supports in Africa have been labeled by the US as "unfair practices" indicating "ambitions of becoming a regional power." At the same time, Brazil is also one of the top exporters of iron ore. China is the biggest buyer of iron ore in the world, but it does not have pricing power due to the Western countries' monopolies in the industry. China's investments in the steel industry in Brazil put it at odds with the US. Most significantly, Brazil is a major exporter of agriculture products and is extremely important when discussing food security issues. China has been an agriculture goods importer for years. Though China has agreed to fully embrace trade globalization and the Doha Round, the US and Brazil both want to enlarge their market share in China. China not only needs to deal with old problems with the US, it also has to prepare for new challenges that may arise as Brazil emerges.
Politically, Brazil may impact US-China relations on three fronts: UN reform, nuclear nonproliferation and political democratization. Both the US and China are aware of Brazil's ambition to become a permanent member of the UN. But the attitudes are vague. China is still a beneficiary of the current world order led by the US and seems to be more interested in regional organizations, such as BRICS. Nevertheless, the US and China welcome the influence of Brazil on international issues. As mentioned before, as long as Brazil does not pick a side, it will not trigger fundamental conflict between the US and China. Before South Africa joined BRICS, Brazil was the only BRIC country without a nuclear weapon. It is an ideal partner to promote President Obama's nuclear free world, but it is too early to tell how significant nuclear-free Brazil will be to the North Korean and Iranian nuclear issues. Like India, the more successful Brazil is, the more pressure US commentators will put on China to reform its political system. Chinese leadership does not like to be told to reform. Overemphasizing Brazil as a political role model may harm the trust between China and Brazil and eventually worsen the good faith between the US and China.
All in all, a rising Brazil brings opportunities to both the American and Chinese people. Unavoidably, it also poses challenges to the US-China relationship because its economic and political implications are too critical to ignore. However, Brazil is not the key to a prosperous US-China relationship. Good faith between the US and China is the key.
The author is a non-resident Vasey Fellow at the Pacific Forum for the Center for Strategic and International Studies (CSIS).
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn.
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