Brazil's Participation in BRICS Cooperation Gains Many Benefits from China and Brazil | Trade | Brazil
The picture shows a BYD pure electric bus taken on July 12th at the starting station of the "Green Line" of the San Jose dos Campos Rapid Transit System in S ã o Paulo, Brazil.
Xinhua News Agency reporter
Photo by Wang Tiancong
The picture shows visitors watching BYD pure electric cars in El Salvador, the capital of Bahia state in Brazil, on July 4th.
Xinhua News Agency reporter
Photo by Wang Tiancong
"Friendship is like wine, the longer it lasts, the better it tastes." In April of this year, Brazilian President Lula quoted a Brazilian proverb during his visit to China and highly praised the relationship between Brazil and China and the cooperation between the BRICS countries. Since the establishment of the BRICS Cooperation Mechanism 17 years ago, the foundation of cooperation has been increasingly solid, and the fields have gradually expanded, injecting inexhaustible impetus into Brazil's economic development.
In April, Lula's first stop in China came to the Shanghai headquarters of the New Development Bank of the BRICS countries and attended the inauguration ceremony of the new president of the Bank and former Brazilian President Rousseff. "As the former President of Brazil, I am well aware of the importance of multilateral development banks, especially the New Development Bank, in meeting the economic, social development, and environmental needs of member countries," Rousseff said at his inauguration ceremony.
As stated, in recent years, Brazil has received multiple important investments through the New Development Bank, effectively improving the level of infrastructure construction in transportation, clean energy, and digital networks in Brazil. As of the first quarter of this year, the New Development Bank has approved a total of 22 Brazilian projects with a total investment of approximately 6.2 billion US dollars. Recently, the New Development Bank has approved a financing support of 120 million US dollars for the century old infrastructure project in Aparecida Digoyania, Brazil, to support the city's urban road traffic improvement, important transportation hub renovation and upgrading, strengthening school infrastructure construction, and repairing community parks and other project activities. The head of the Brazilian National Economic and Social Development Bank also stated that the BRICS New Development Bank will provide $2.7 billion for Brazil's ecological transformation.
"The New Development Bank is the first multilateral development bank established entirely by emerging countries, representing their ability to make changes to the world by establishing a world that reduces poverty, reduces inequality, and is more sustainable. This is completely different from the 'traditional bank' led by developed countries. Lula highly praised cooperation among BRICS countries and has high hopes for the development prospects of the New Development Bank.".
Under the cooperation mechanism of the BRICS countries, Brazil has not only received hot investment, but also continuously deepened trade exchanges, especially the rapid development of China Pakistan trade, which already has strong complementarity. According to data from the Chinese Ministry of Commerce, the bilateral trade volume between China and Brazil reached 171.49 billion US dollars in 2022, making China Brazil's largest trading partner for 14 consecutive years. According to data from the General Administration of Customs of China, the trade volume between China and Pakistan in the first quarter of 2023 was RMB 250.414 billion, a year-on-year increase of 14%; Both sides have shown impressive performance in agricultural trade, coinciding with Brazil's record high soybean harvest this year, further boosting China's soybean imports. In the first half of this year, China imported 29.7 million tons of soybeans from Brazil, an increase of 2 million tons from the same period last year.
At the same time, Lula's repeated mention of cross-border trade settlement in local currency has also received attention and response from the BRICS countries. According to foreign media reports, just before President Lula's visit to China, the Brazilian Trade and Investment Promotion Agency announced that Brazil and China have taken the first step on the path of establishing bilateral trade with their own currencies. The two sides signed two preliminary agreements at the China Brazil Business Seminar, stipulating that BBM Bank, headquartered in El Salvador and controlled by the Bank of Communications of China, will join China's interbank payment system, and the Brazil branch of Industrial and Commercial Bank of China will serve as the clearing bank for the Chinese yuan in Brazil. Tatiana Rossito, Secretary for International Affairs of the Brazilian Ministry of Finance, stated that through these two institutions, both exporters will receive payments in the currency of their country of origin.
"The use of local currency for trade settlement between major trading countries reduces dependence on third-party currencies or a single currency, effectively avoiding the freezing of their own trade settlement funds, which is beneficial to the overall macroeconomic stability of each country. Of course, it also facilitates trade between China and Brazil, reduces transaction costs, stimulates bilateral trade, and enhances the convenience of China's investment in Brazil." Zhou Zhiwei, Deputy Director of the International Relations Department of the Latin American Institute of the Chinese Academy of Social Sciences and Executive Director of the Brazilian Research Center, said that the current US dollar dominated international monetary system has structural problems such as instability and unfairness. Expanding the scale of local currency settlement among BRICS countries, promoting diversified currency settlement, will also help promote international monetary system reform.
The accelerated shaping of a new world order by the BRICS countries also provides an opportunity for Brazil to strengthen its global discourse power. After experiencing drastic changes in Brazil's foreign policy under the Bosonaro government, Lula began her third presidential term this year and actively promoted a major country diplomatic strategy with the theme of "Brazil's return" in the diplomatic field.
At present, Brazil strives to maintain a neutral and pragmatic position in international affairs, refuses to choose sides in the Russia-Ukraine conflict, and more directly rejects the request of the United States to provide weapons to Ukraine. However, constrained by the traditional Western hegemonic position, Brazil has repeatedly attempted to initiate peace mediation processes, but has faced opposition and resistance from the United States and Europe; At the G7 summit, Ukrainian President Zelensky even stood up and did not meet with Lula as scheduled. To increase international discourse power and leadership, and promote the process of world multipolarity, it is crucial for Brazil to further deepen cooperation with the BRICS countries.
"For Brazil, the BRICS cooperation mechanism is not only a unique cooperation platform belonging to developing countries, but also the only BRICS country in Latin America. It is a strong proof of Brazil's own strength and status, strengthening Brazil's representativeness at multiple levels such as regional power and emerging countries, and enhancing its international influence and recognition." Zhou Zhiwei said that the BRICS countries have obvious advantages in terms of dimension and depth of participation in global governance, especially in terms of negotiation on political and security issues, which provides an important way for Brazil to further expand its participation in global governance.
