Lula looks for his Eldorado to end up depending on China

Brazilian President Lula da Silva has gone from Beijing in a big way, not only because of the huge delegation that has accompanied him and the more than 15 cooperation agreements signed with China, but also because of the audacity of his statements, at least from the perspective of West, statements that, on the other hand, seem to come from the mouth of President Xi Jinping.

If President Lula's objective on this trip was to put Brazil in the international community's sights, he has undoubtedly achieved it.

But if the objective was to place Brazil as a neutral power, as Narendra Modi has done with India, the trip has not gone so well because it has made it very clear who is the master of the bilateral relationship between the two countries: Xi Jinping.

Lula's objectives with his visit were very clear: above all, to bring growth opportunities to Brazil, whose economy was hit hard by the pandemic.

In fact, exports of Brazilian raw materials to China have skyrocketed since 2008, making China, by far, Brazil's leading trading partner.

Although these exports suffered a slump, they have recovered again thanks to the abundance of lithium from Brazil, along with other critical materials for the energy transition.

So much so that the Brazilian trade balance with China is positive, one of the few cases in the world.

Beyond exports, China is one of the largest investors in Brazil, especially in the energy sector.

The Chinese distribution company State Grid has invested about 3.

000 million dollars in energy transmission in Brazil and Cofco, the largest food trader in China, has invested more than 1,100 million in Brazilian agribusiness.

On the other hand, the high interest rates, not only in Brazil, but also on the dollar, are creating financing difficulties for the South American giant, which is why Chinese companies are more welcome than ever, even if they are in strategic sectors in which Brazil is losing control.

But growth and development are not the only objectives that have brought Lula to Beijing.

The low hours that Lula went through after his first presidency, marred by his arrest and conviction in 2017, seem to have created a yearning for international leadership absent in his first presidency (2003-2010).

There is no doubt that Brazil is large enough, in terms of economy and population, to play a role as a regional power in Latin America and also a global one if the rivalry between the two great powers, China and the United States, allows it.

Other actors are also in this fight, such as the European Union and India, but Lula seems to have taken another path, which is to break the deck and side with China.

The reality is that traditional international institutions are not working for Brazil,

with a rather dysfunctional G-20, and even more so since the invasion of Ukraine, the absence of trade agreements with the US and the 20 years of waiting for the agreement between Mercosur and the European Union.

Perhaps it is precisely this that has led Lula to the conviction that only China can offer quick results.

In fact, the initiative promoted by Xi, especially since the start of the pandemic and with greater zeal since the invasion of Ukraine, from the Global South leaves room, at least on paper, for a country like Brazil as a co-promoter of this initiative.

What better proof than having the former Brazilian president, Dilma Rousseff, as president of the BRICS bank, renamed the New Development Bank, always in the shadow of Lula.

the absence of trade agreements with the US and the 20 years of waiting that the agreement between Mercosur and the European Union accumulates.

Perhaps it is precisely this that has led Lula to the conviction that only China can offer quick results.

In fact, the initiative promoted by Xi, especially since the start of the pandemic and with greater zeal since the invasion of Ukraine, from the Global South leaves room, at least on paper, for a country like Brazil as a co-promoter of this initiative.

What better proof than having the former Brazilian president, Dilma Rousseff, as president of the BRICS bank, renamed the New Development Bank, always in the shadow of Lula.

the absence of trade agreements with the US and the 20 years of waiting that the agreement between Mercosur and the European Union accumulates.

Perhaps it is precisely this that has led Lula to the conviction that only China can offer quick results.

In fact, the initiative promoted by Xi, especially since the start of the pandemic and with greater zeal since the invasion of Ukraine, from the Global South leaves room, at least on paper, for a country like Brazil as a co-promoter of this initiative.

What better proof than having the former Brazilian president, Dilma Rousseff, as president of the BRICS bank, renamed the New Development Bank, always in the shadow of Lula.

Perhaps it is precisely this that has led Lula to the conviction that only China can offer quick results.

In fact, the initiative promoted by Xi, especially since the start of the pandemic and with greater zeal since the invasion of Ukraine, from the Global South leaves room, at least on paper, for a country like Brazil as a co-promoter of this initiative.

What better proof than having the former Brazilian president, Dilma Rousseff, as president of the BRICS bank, renamed the New Development Bank, always in the shadow of Lula.

Perhaps it is precisely this that has led Lula to the conviction that only China can offer quick results.

In fact, the initiative promoted by Xi, especially since the start of the pandemic and with greater zeal since the invasion of Ukraine, from the Global South leaves room, at least on paper, for a country like Brazil as a co-promoter of this initiative.

What better proof than having the former Brazilian president, Dilma Rousseff, as president of the BRICS bank, renamed the New Development Bank, always in the shadow of Lula.

The problem is that the limit to the Brazilian leadership that Lula seeks is precisely its origin, China itself, since it can only be exercised in opposition to the US and with unconditional support for Beijing.

A leadership of these characteristics becomes so biased that it ceases to be biased, and that is exactly what happened with Lula's visit to China.

If Lula intended to show the world, and certainly the United States, his "strategic autonomy", to use an expression that we Europeans know well, he certainly has not succeeded.

In fact, Lula's two key messages in Beijing – the end of the use of the dollar in commercial transactions and his position on the war in Ukraine – could well have been launched by Xi Jinping.

As regards Ukraine, since last February Lula has intensified diplomatic efforts to end the war by creating a so-called "peace club".

From this initiative, autonomous

, Lula has gone on to a much more aggressive one in which he accuses the United States of fomenting the war and Ukraine of being responsible for it, along with Russia.

With this, Lula has gone from launching great ideas as a possible plotter for a concerted solution, to having a puppet role adopting a position much more similar to that of China, with the difference that Beijing can maintain a less aggressive official position and hide behind Lula and others who follow him.

Regarding the international use of the dollar, Lula has defended the use of local currencies for international trade, but no one is aware that it will not be the Brazilian real that will assume that role, but the Chinese yuan, as has been evident in the announcement made a couple of weeks ago of the creation of a payment infrastructure in yuan in Brazil, with the main objective of settling bilateral trade payments between China and Brazil in the Chinese currency.

What does seem clear is that Xi has achieved his objectives with Lula's visit to tip the balance in favor of a more united Global South and ready to follow in the footsteps of the Asian giant.

Lula, on the other hand, has gone from showing signs of strategic autonomy and global leadership to using the language of Xi Jinping on issues of great importance.

Of course, at least it has carried a series of cooperation agreements in its pocket that hopefully will bring new growth opportunities for Brazil.

This had better be the case because Lula's dismissal of Washington may not be gratuitous in the bipolar world in which we still find ourselves.

Alicia García-Herrero

is Chief Economist for Asia at Natixis and a Senior Research Fellow at Bruegel.

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