How China is Transforming Brazil 9789819931019, 9789819931026

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How China is Transforming Brazil Edited by Mariana Hase Ueta · Mathias Alencastro · Rosana Pinheiro-Machado

How China is Transforming Brazil

Mariana Hase Ueta · Mathias Alencastro · Rosana Pinheiro-Machado Editors

How China is Transforming Brazil

Editors Mariana Hase Ueta Campinas, São Paulo, Brazil

Mathias Alencastro São Paulo, Brazil

Rosana Pinheiro-Machado University of Bath Bath, UK

ISBN 978-981-99-3101-9 ISBN 978-981-99-3102-6 (eBook) https://doi.org/10.1007/978-981-99-3102-6 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Introduction

The introduction of this book was finalized a few days after the defeat of Jair Bolsonaro in the Brazilian elections, and, back then, it was far too early to draw conclusions on his political legacy. It was visible, though, from both institutional and societal perspectives that the Sino-Brazilian Strategic Partnership had fundamentally changed during his government. Bolsonaro had an ambiguous relationship with Beijing since the early days of the campaign. To the surprise of many, one of the first foreign trips from candidate Bolsonaro was precisely to Taiwan, in a sign that his ideological and political alignment to Donald Trump could have a direct impact on relations between Brazil and China.1 Things escalated slowly in the beginning of his mandate, with provocations from Bolsonaro himself, who mocked Chinese habits on social networks, the incorporation of the anti-China discourse by the Brazilian far-right, and the pro-US diplomatic line adopted by Bolsonaro’s Foreign Minister Ernesto Araújo.2 An already strained relationship was taken to the limit when the pandemic hit, as Bolsonaro embraced the conspiracy ideas launched by far-right groups of an alleged involvement of Chinese authorities in the development and dissemination of the coronavirus. Bolsonaro then publicly attacked the 1 https://www.poder360.com.br/brasil/republica-popular-da-china-critica-bolsonaropor-sua-visita-a-taiwan/. 2 https://www12.senado.leg.br/noticias/materias/2021/05/06/fala-de-bolsonaro-

sobre-china-causa-polemica-em-reuniao-da-cre-com-chanceler.

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Chinese vaccine Coronavac that was being produced by his political opponent, São Paulo Governor João Doria.3 The tensions and animosities previously confined to online exchanges dramatically escalated and boiled over to the bomb attack against the Chinese consulate in Rio de Janeiro in September 2021. Relations seemed to have reached a point of no return when Chinese authorities started to create obstacles for Brazilian agribusiness. Bilateral relations between China and Brazil were characterized by discretion under Lula and Dilma. They became part of the national debate under Bolsonaro. The growing relevance of Brazil-China relations is not only a result of Bolsonaro’s chaotic approach to foreign policy. It is also related to deeper, more important reasons, linked to the rise of China as a central economic actor in Latin America and Brazil. While China has been increasing the pace of its economic diplomacy in the region for more than a decade, with a focus on countries that previously supported Taiwan or those that faced political pressure by the United States, things accelerated during the pandemic, when China not only offered solutions to the “polycrisis” but also expanded its interests.4 Investments in agricultural, energy, and mineral commodities were part of an expansive foreign policy agenda. Driven by greenfield investment and sovereign lending, China’s creditors became active in the whole of the region, financing Chinese companies in a range of strategic sectors. China’s commercial banks—including the ICBC and Bank of China— and its private equity funds are also playing increasingly prominent roles. It is worth noting, however, that the wave of investments appears to be cyclical. In 2010, China’s policy banks issued $34.5 billion to the region. Last year, its policy banks approved no new loans to Latin America, and total commercial bank lending was less than $1 billion.5 Since 2019, China seems to be shifting from commodities and energy and finance to infrastructure, with an interest in what is called “new infrastructure”— 5G, electricity transmission, high-speed rail, electric vehicles, data centers, and artificial intelligence—a theme of the 7th China-LAC Infrastructure Cooperation Forum in 2021. Beyond the economy, China tried to forge

3 https://www12.senado.leg.br/noticias/materias/2020/11/10/senadores-criticam-

comemoracao-de-bolsonaro-da-suspensao-dos-testes-da-coronavac. 4 https://www.ft.com/content/498398e7-11b1-494b-9cd3-6d669dc3de33. 5 https://journals.sagepub.com/doi/full/10.1177/18681026211057134.

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strategic partnerships. It added Argentina to the Belt and Road Initiative (BRI), opened negotiations for a foreign trade agreement with Uruguay, and developed an expansive military partnership with Venezuela.6 In Brazil, in particular, despite the problems with the Bolsonaro administration, China continued to develop projects in infrastructure, technology, and other critical areas with a transformational impact. While Brazil consolidated its role as an important supplier to China, increasing exports and turning China into the main destination for Brazilian exports since 2009, China, by virtue of its status as the “factory of the world,” has established itself as the main supplier of manufactured products to Brazil. Politically, China worked with other branches of the government to counterbalance the tensions with Bolsonaro and acquired assets in a variety of strategic sectors. The China-Brazil congress partnership was strengthened and empowered, and Chinese companies hired top lawyers with political influence, including firms tied to former elected officials.7 Behind the scenes, senior advisors in the Bolsonaro government, especially in the department of agriculture, created a China bureau and assisted Chinese investors. Despite diplomatic tensions, trade agreements were signed, and exports to China rose across all states of the federation, especially across the so-called Center-West. China was not just doing damage control; it was investing in the conditions for deepening and strengthening the partnership with Brazil. Due to Brazilian regions’ different socio-economic profiles, the effects of Chinese investment were experienced differently across the country. The states of the Center-West thrived under Bolsonaro, while the trend of deindustrialization appears to have accelerated in São Paulo and Rio de Janeiro. Thanks to their commercial link to China, states like Mato Grosso do Sul debunked São Paulo as trade powerhouses. The material life of Brazilians was also impacted. Products from low to high technological complexity and across different price ranges are now being imported from China.8 The very success of the Havan stores, an iconic brand of the

6 https://journals.sagepub.com/doi/10.1177/18681026221094852?icid=int.sj-fulltext.similar-articles.3. 7 https://tecnoblog.net/noticias/2021/01/22/huawei-recruta-michel-temer-para-def ender-presenca-no-5g-do-brasil/. 8 https://www.cebc.org.br/arquivos_cebc/carta-brasil-china/Ed_6.pdf.

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Bolsonaro years, reveals the contradictions of Brazil in the age of superpower competition. The store boasts a replica of the NY Statue of Liberty at its entrance, but it almost-exclusively sells Chinese-imported products. In the age of Bolsonaro, many revered the United States, its aesthetics, and its ideology, but embraced the materiality of the “Chinese century”. That apparent contradiction tells a story about a country in transition. The Brazil that was once culturally and economically anchored in the West, and most specifically in the Atlantic economy where liberalism and slavery formed together the Republic, is slowly giving place to a country closer than ever to China. This book traces the roots of a process that is often treated as recent and incipient. China stepped up its investment in Latin America while adopting a more balanced approach toward some of its key economic partners in Africa, so it seems to continue wielding massive political influence. Loans, commitments, and foreign direct investment have been surging and the promise of economic development based on an industrialization-led structural transformation agenda is rallying politicians in both continents. The fact that both the Argentinian and the Ethiopian cases have only partially delivered on their promises is not deterring others from trying to develop a relationship with China on similar terms. However, deeper engagement may also be at the origin of future tensions. China’s expanding role as a holder of African and Latin American debt will increasingly shape relations as countries from the Global South still recover from the COVID-19 pandemic. Debt renegotiation and forgiveness will mark the end of the era of easy Chinese money. However, the fact that the US has failed to compete with China’s economic pledges in Latin America shows the breadth of the expansive vision of Xi Jinping. Due to the complexification and the emergence of new issues, the SinoBrazilian partnership has been a challenge to those involved in research and strategic planning. From the Chinese side, it is possible to see the growing importance attributed to these regions through the creation of institutes and departments in the main universities of this country dedicated to the research and teaching Portuguese, as well as the increasing number of Confucius Institutes in Brazil. From the Brazilian side, there is still the recurring discourse that there is lack of research being developed in Brazil on China. Research in Latin America on China has made important advances in the past decade. Those working in China from Brazil, Argentina, and Chile have produced an important body of literature. Yet there are limits that go beyond academia. It is important to recognize that

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much work is still needed and there is plenty of room for the field to grow. During the 2008 Beijing Olympics, the number of Brazilian correspondents in China reached its peak, and the media coverage was not only limited to the sports event, but on political and cultural aspects of the country. This contributed to the construction of a more complex image of China in Brazil, in contrast to the representations it had before: either as an economic threat or as an exotic beauty. ∗ ∗ ∗ This book seeks to establish a new perspective on the studies of Brazil and China in Fernand Braudel’s understanding of long duration. Our premise is that the current developments in Brazil and China relations are not incipient nor new. Rather, they are rooted in political and cultural interactions that have been taking place since the nineteenth century. This effort draws on a new generation of scholars that are working on Chinese contemporary influence across the country and are pushing the boundaries of the field forward, but also on established academics that have been working on the topic for decades and have set the ground for the current research. Only by recognizing the work already developed in the field and bringing new research, these synergies will allow the field to not only expand, but also diversify in its scope. It gathers texts from different natures and disciplines which made the editorial work especially challenging. The main structure constitutes in two parts that differ by scale. China-Brazil ties take place both at the high level of comparison between states, and in the private lives of Brazilians who interact in a secular way with Chinese influences. These two mechanisms feed back into each other and go on to define China’s image in Brazil. The book thus challenges conventional perspectives of IR, very prevalent in Brazil, where the perspective of states, treaties, and political actors prevails over the social and cultural perspective. Finally, the book aims to present at the same time a more “visible side” of the partnership that consists in the economic and international political relations, while also offering perspectives on “less visible sides” that consist in historical and sociological constructions that give a broader picture of the challenges and opportunities of the relationship between China and Brazil. The first part will welcome the readers to understand the historical and sociological perspective on China. Tom Dwyer brings the perspectives of

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Brazilians who migrated to China, through their dreams, their difficulties, and strategies to navigate the Chinese reality. Through the experience of Brazilian musicians in China, the author invites us to think the importance of the intercultural perspective in the encounter between Brazilian and Chinese. André Bueno and Douglas Piza bring historical perspective of the Chinese migration in Brazil. Bueno celebrates important authors such as Freyre and Teixeira Leite who were pioneers in identifying Chinese elements in the Brazilian culture and provoke us to question the influence of the exchanges with the Chinese in the formation of our own culture. Douglas brings the history of Chinese migration, the differences between the migratory waves, the challenges and contributions of each one of them, and makes a contemporary reflection about the image of the Chinese currently built from these historical processes. Finally, Victor Ido presents an overview of how the technological development of the last decades in China has inaugurated new IP norms. The author calls attention to the need for actors in Brazil to understand the process in order to be better informed in their decisions and development of cooperation. The second part will be on Economy and International Relations focused on environmental issues, which has been a field of fruitful cooperation between the countries. Niklas Weins, Talita Pinotti, and Jefferson Estevo bring an interesting overview that takes the reader from Chinese reforms and policies to their effects on the global sphere and their impacts on the development of strategic relationships. They focus on the environmental issue and analyze how this issue is understood through investment and trade. Adriana Abdenur, Maiara Folly, and Maurício Santoro deepen this discussion by analyzing the insertion of China in strategic sectors, such as transportation, and how this experience has taught lessons on both sides. Since the commodities boom, China has been learning how to deal with Brazil’s business, regulation, and investment landscape. Brazil, in turn, has been understanding and organizing itself to deal and respond to the Chinese presence in these sectors. Livia Machado maps out the Brazilian investments and Sino commitments from the strategic Amazon region. She draws attention to the potential of this region and the need not only for regulatory and law enforcement, but also for dialogue and political commitment. João Cumaru gives an overview of the investments in the energy sector. The author presents data on the important Chinese actors in the field and how their investments have been influencing and transforming the electric

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landscape in the country. Through these four chapters, it is possible to see that Chinese investments are led by different actors and focusing on different sectors in different parts of the country. Finally, we are honored to have a final chapter from Professor Zhou Zhiwei, Senior Researcher at the Institute of Latin American Studies at the Chinese Academy of Social Sciences and Executive Director of the Center for Brazilian Studies, offering a perspective from China on the Sino-Brazilian partnership. By bringing into light this set of scholars, this book seeks to consolidate the scholarship developed in the last decade and promote a new approach to Brazil-China relations, written from the perspective of the Global South. But this book is nothing short of a reflection on the future. It has been conceived and developed as a set of ideas that can help shape future policies for Brazil toward China.

Contents

Brazilian Migrants Experience China: Musicians’ Observations of the Promises and Limits to Sino-Brazilian Relations Tom Dwyer 1 Introduction to Brazilians Relationships with China 2 Early Brush Strokes—Brazilian Travellers in the Nineteenth and Twentieth Centuries 3 Reform and Opening Up: Brazilians Move to China 4 Methodological Notes 5 Academic Studies of Brazilians in China 6 The Live Music Market in China for Foreigners 7 Globalisation and Brazilian Musicians 8 Policy Recommendations References Traces of Chinese Culture in the Roots of Brazil André Bueno 1 Introduction 2 Colonial Brazil (Before 1822) 3 Brazil Empire (1822–1889) and the ‘Question of Chin’ 4 Rediscovering the Chinese Traces in Brazil 5 The ‘China in Brazil’ by José Leite 6 News Studies on Chinese Presence in Brazil 7 Conclusions References

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Chinese Migration and Changes in Brazilian Society Douglas de Toledo Piza 1 Introduction 2 The Overseas Chinese in Brazil 2.1 Servants of the Portuguese Empire 2.2 The Chinese Question 2.3 Migration in the Making of a Nation by Design 2.4 Overseas Chinese in Multicultural Brazil 2.5 Climbing Up the Social Ladder 2.6 Popular Markets 3 Transforming Commodity Circuits in Brazil 4 Economic Crisis, the Pandemic, and Discrimination 5 In Lieu of Conclusion: From the Margins to the Center References From ‘Threat’ to ‘Partners’? The Changing Landscape of Innovation and Intellectual Property Between China and Brazil Vitor Henrique Pinto Ido 1 Introduction 2 From the Made in China to the Made in China 2025 (and Beyond) 3 Global Socio-Legal Consequences of China’s New Role 3.1 China Can Be a Potential New ‘Norm-Maker’ in International Economic Law, Particularly Given Its Prominent Participation at the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO), and Its Bilateral and Regional Trade and Investment Agreements 3.2 Chinese Domestic Regulators and Courts May Often Act as de facto Extraterritorial and Transnational Regulators, Especially in High-Technology Areas Such as 5G 3.3 Chinese Firms Are Turned into Global Private Regulators (Enforcing Their Contracts Across Global Value Chains and Their Privacy Standards, Seen in E-commerce Retailers and Big Tech Platforms More Prominently)

41 41 43 44 45 47 48 49 50 51 52 54 55

59 59 61 68

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4 Implications for Brazilian Stakeholders 5 Conclusion References Chinese Railway Investments in Brazil: Socio-Environmental Implications for the Amazon and Cerrado Adriana Erthal Abdenur, Maurício Santoro, and Maiara Folly 1 Introduction 2 Institutional Learning in Transport Infrastructure Projects 3 The Ferrogrão Railway Project 4 Institutional Learning and Mutual Adaptation 5 Conclusion Understanding Chinese Investments in the Brazilian Amazon Region Lívia Machado Costa 1 Introduction 2 What Brings China to the Brazilian Amazon? 2.1 Chinese Investments in the Brazilian Amazon Region (2010–2020) 3 China’s Climate Goals, the Amazon, and Development 4 Conclusion References The Sino-Brazilian Relations in Debate: A Perspective from the Energy Sector João Cumarú 1 Brazil-China Cooperation 2 The Energy Sector in Evidence 2.1 Latin America 2.2 An Overview of the Sino-Brazilian Cooperation in the Energy Sector 2.3 Regional Division of Investments 3 Comments on the Challenges and Potentialities of the Sector for Sino-Brazilian Cooperation 4 Final Comments References

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79 79 81 85 93 99 101 101 103 105 108 111 113 119 119 121 121 122 126 129 133 135

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China’s Environmental Turn and the Impacts on Investment and Trade in Brazil-China Relations Niklas Werner Weins, Jefferson dos Santos Estevo, and Talita de Mello Pinotti 1 Introduction 2 China’s Environmental Turn 3 A Greener China and Its Impacts on Sino-Brazilian Relations 3.1 Chinese Investment in Brazil: Environmental Risks and Opportunities 3.2 Consequences of the Commercial Relations Between China and Brazil 4 Conclusions References Common Interests and Brazil-China Multidimensional Cooperation Zhiwei Zhou 1 Bilateral Dimensions 2 Multilateral Dimensions 3 Cross-Regional Collaborative Dimensions 4 Conclusion Index

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List of Contributors

Adriana Erthal Abdenur Plataforma CIPÓ, Rio de Janeiro, Brazil André Bueno University of the State of Rio de Janeiro, Rio de Janeiro, Brazil Lívia Machado Costa Department of Geography, University of California, Santa Barbara, CA, USA João Cumarú Fudan University, Shanghai, China; Federal University of Pernambuco, Recife, Brazil Douglas de Toledo Piza Lafayette College, Easton, PA, USA Tom Dwyer CASS-Unicamp Center for China Studies, IFCH, University of Campinas, Campinas, Brazil Maiara Folly Plataforma CIPÓ, Rio de Janeiro, Brazil Vitor Henrique Pinto Ido University of São Paulo, São Paulo, Brazil; Health, Intellectual Property and Biodiversity Programme, South Centre, Geneva, Switzerland Talita de Mello Pinotti University of Campinas, Campinas, Brazil; United Nations System Staff College, Bonn, Germany Maurício Santoro State University of Rio de Janeiro, Rio de Janeiro, Brazil

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LIST OF CONTRIBUTORS

Jefferson dos Santos Estevo University of Campinas, Campinas, Brazil Niklas Werner Weins University of Campinas, Campinas, Brazil; Wageningen University, Wageningen, Netherlands Zhiwei Zhou Institute of Latin American Studies, Chinese Academy of Social Sciences, Beijing, China

Brazilian Migrants Experience China: Musicians’ Observations of the Promises and Limits to Sino-Brazilian Relations Tom Dwyer

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Introduction to Brazilians Relationships with China

Today, thousands of Brazilians live in China, and the experiences and perceptions of a group of them constitute the subject matter of this chapter. By the end of the nineteenth century, the only register Teixeira Leite found on the mainland was of a single Brazilian who lived in Tientsin (today’s Tianjin) for a year (Lisboa, 1888). Early Brazilian travellers wrote about China, its people and their lives, but besides Lisboa, no Brazilian authors so far rediscovered seemed to have shown any in-depth life experiences and knowledge about that country. This short chapter will begin by briefly mentioning José Roberto Teixeira Leite’s key readings of selected books written by Brazilian visitors to China in the nineteenth century and most of the twentieth century. While some examine early State-to-State relationships between our Continental countries. Direct comparisons and approximations are produced.

T. Dwyer (B) CASS-Unicamp Center for China Studies, IFCH, University of Campinas, Campinas, Brazil e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_1

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The sheer size, density, poverty and massive differences are highlighted, as is a sense of innate superiority. However, the viewpoint changes when to the Chinese republican revolution of 1911, and later the communistled revolution of 1949, a ‘new and modernising China’ emerges. Sporadic visitors came to write about that country, sometimes from utopian viewpoints. Brazil established diplomatic relations with the People’s Republic of China in 1974; from 1978 onwards, the giant started its transformation—the most significant and positive seen in human history—into what it is today, the second economic power on Earth, Brazil’s major trading partner and the new key State actor on the world scene. In 1999, José Roberto Teixeira Leite, in introducing his trail-blazing book “China in Brazil: Chinese influences, marks, echoes and survivals in Brazilian society and art,” stated, “At this end of a decade, which is also the end of a Century and of a Millennium, the mention of China inevitably raises confused ideas, and in any way signifies as little to 99.99% of us Brazilians, accustomed to associating it with a nebulous country, so little known about, and almost as remote as Mars or the Moon” (1999, p. 11). However, China-Brazil relations were already being prepared for a previously unimaginable mutation. Less than a half a decade later, Brazil and China had become ‘strategic partners,’ and in less than a full decade, China had become Brazil’s biggest trading partner. By 2014, according to the Brazilian Foreign office, some 16.700 Brazilian citizens lived in China. In 2021, over 30% of all Brazil’s exports went to a country that even today we in Brazil know so little about! Much of what many Brazilians at home think of China today is anchored in powerful images of the other, many of which can be found in contemporary books written by Brazilian journalists who have lived there. Some representations appear to be similar to those portrayed by nineteenth-century Brazilian travellers and authors; others are of a country and a people that appears to be completely transformed as a result accelerated modernisation—tradition and modernity are portrayed as living side by side. Domination and subordination are a part of life, and the society is on the move. Increasing the interest of Brazilians in China not only attends a national interest to permit our citizens to know our major trading partner better, but it also is a fruit of an academic interest—reflected in the title and the authors who are writing in this volume. It aims at understanding how China is impacting Brazil. For me, the key question is, how can we live together? and how does our answer to this question positively impact on

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the lives of Brazilians and Chinese peoples and on our neighbours, and contribute to world peace. China’s entry into the World Trade Organisation (WTO) signified much more than abstract principles of ‘economic globalisation’; for many Brazilians, it has directly impacted their lives and not always positively. However, early scripts on economic globalisation were late in forecasting that China would become Brazil’s major trading partner. The building of these relationships has involved much more than WTO membership and diplomatic contacts; it has required the establishment of complex relations between various institutions, private and public, and interactions between our peoples. For Fernando Henrique Cardoso, “I confess it is easier for me to see the reciprocity between our interests and China’s than with India. Culturally I am fascinated by India…. [with India] [O]ur conversations, always friendly, never turned into anything concrete, neither economically nor politically…. [With China] We, from our side, need to define what our game is. It’s possible to play with the Chinese, but if they are the only ones with strategic objectives and know what they are looking for, in this game we won’t do very well…. In the mid-term it depends on our capacity to formulate our own proposals and implement them” (Cardoso, 2006, pp. 634–635). For Polish sociologist Piotr Stompka, it is appropriate to treat the “macro theme of globalisation at the micro level of the mundane everyday experiences of ordinary people. This implies that real sociality resides in those experiences and the relationships they contain.”1 The bulk of this chapter reports on the results of original research carried out by the author with Brazilian residents who had been based at least three years in China; interviews and observations were carried out during the 2010 decade in both Beijing and Shanghai. The results of this research indicate that, with patience, knowledge and wisdom, Brazilian musicians—as carriers of a Brazilian contribution to cultural globalisation—have been able to construct enduring, profitable and, in spite of instabilities, long-lasting relations with the China and with the Chinese people. To read our interviewees’ reflections on their experiences in China can serve as an antidote to the anti-Chinese propaganda of Brazil’s government at the time of writing, which, acting contrary to 1 https://www.isa-sociology.org/en/about-isa/history-of-isa/isa-past-presidents/list-ofpresidents/piotr-sztompka (consulted on 31 March 2022).

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Brazil’s core interests, sought to cosy up to the US. By sharing their experiences and collective wisdom, they help readers see how they have constructed relations and laid the grounds for the future.

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Early Brush Strokes---Brazilian Travellers in the Nineteenth and Twentieth Centuries

Francisco Antonio de Almeida (1879) provides us with the earliest description based on a short period he spent in China on his way to observe the planet Venus’s transit over Japan in December 1874. He was a member of a scientific mission commissioned by Dom Pedro II. For Teixeira Leite (1999, p. 261), his short stay didn’t permit him to write in any depth about the country, and his opinions were formed lightly. Salvador de Mendonça (1879), author and diplomat, travelled to China, with the mission to stimulate the migration of Chinese agricultural labourers to Brazil. His book “Asian Workers” was harshly received by Brazilian positivists. After well-researched and written chapters, Mendonça came out against the immigration of indentured Chinese labourers (coolies) as had occurred in Peru and Cuba, and in favour of the migration of free labour as in the USA, where in his view such migrants had proven to be very hard workers. However, he also warned about the Chinese: “liars, disloyal, suspicious, partial to robbery and gambling, lustful, hypocrites, unclean and incapable of coming to love their new land. All of this without speaking of the dangers of ‘mongolisation,’ a phenomenon which many hygienists had also been calling to the attention of the authorities” (Teixeira Leite, 1999, p. 262). Later, Henrique Carlos Ribeiro Lisboa travelled to China as part of an official mission led by Admiral Artur Silveira Mota, which lead to the Treaty of Tientsin’s—a treaty of friendship, trade and navigation (permitting the emigration of ‘free’ labour)—signing and re-signing. A ceremony took place on 5 September I880 in Tientsin, where Viceroy Li-Hung Chang acted in Emperor Guangxu’s name. However, the document’s final wording proved unacceptable to the Brazilians. In the year, it took to prepare a new version, signed off on 3 October 1881, Lisboa, in his role as secretary to the diplomat Minister Eduardo Callado, stayed in China. He set up home in Tientsin, took Mandarin lessons, mounted a photography laboratory, read the best sources available about China and travelled. Subsequently, he published two books. Teixeira Leite (1999, pp. 264–265) lists several highlights of the first volume (1888), “written

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with manifest sympathy and knowledge” and indicates the interest of chapters on Macau and matters surrounding the 1880 Treaty signing. The last book on Imperial China noted in Teixeira Leite’s literature review was Luis Guimarães Filho’s (1911) “Samurais and Mandarins,” written “without any apparent sympathy nor any genuine cultural interest,” which he evaluated as a “shallow book, by someone who, understood absolutely nothing about what he saw, and didn’t make any attempt to understand” (Teixeira Leite, 1999, p. 264). A trickle of generalist books continued to be published during the turbulent period of the Republic of China (1911–1949) above all by diplomats. Of this list, I would highlight Tabajara de Oliveira’s (1934) descriptions of the ‘Paris of the East,’ Shanghai, “its nightlife and bohemian environment, with its cabarets, dens, smokehouses and houses of prostitution, confessing that he had tried opium, which he considered an aphrodisiac” (Teixeira Leite, 1999, p. 265). After the communist revolution of 1949, a number of Brazilian authors wrote generalist books, which often showed them to be enamoured with Mao’s leadership and the communist regime. Such was the case of the surrealist sculptor Maria Martins (1958), who visited China at the end of 1956, having been invited by none less than Chou En Lai, and received by Mao Tse-Tung. Subsequent efforts followed in the journalistic tradition. Worthy of mention is the Cearense author Heloneida Studart’s (1979) ‘China: the Northeast that became a Success.’ Teixeira Leite’s attention to this period is grasped by cartoonist Henfil (1980) who published a book based on his stay of only 16 days in Beijing, Shanghai and Guangzhou in 1977. He treated “communes, barefoot doctors, bicycles, workers, educational systems… massification, marxification, standardisation of art, television, living costs, toys, birth-rate, neighbourhood committees, atomic bomb shelters, dazibaos, political propaganda, acupuncture, sexuality, musical and theatrical performances, the fall of the ‘Gang of Four,’ little red soldiers, schistosomiasis, Mao posters, pagodas, Chinese cartoonists….” (1999, p. 267). The life of the Brazilian journalist, Jayme Martins, and his family, who lived for 20 years in China is portrayed in Marcelo Machado’s remarkable, empathetic, prize-winning documentary “Bamboo Bridge” (Ponte de Bambu, 2020). The Martins couple’s two daughters became ‘cultural intermediaries’ as they had developed the necessary skills to provide a bridge between people from both lands. This occurred, for example, when

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in the mid-1980s Chinese generals and Brazilian civilian researchers from the National Institute for Space Research (INPE) came together in the China-Brazil Earth Resources Satellite (CBERS) project (Raupp, 2017). Later, as adults, they would work as Chinese-Portuguese translators for Heads of State and work with developing commercial and other links between China and Brazil. Originally recruited to work in Beijing’s ‘Institute of Foreign Languages,’ Jayme Martins lived in China for a total of 20 years (1962– 1979 and 1987–1989). For a part of this time, he worked for major Brazilian and Chinese news outlets. He, his wife and their two daughters (who had spent their formative years in Chinese schools) were eye witnesses of the traumatic sixties and seventies and the initial stages of “reform and opening up” as idealised and led by Deng Xiaoping. Jayme Martins met with or interviewed Mao, Zhou Enlai and Deng Xiaoping, all key shapers of the twentieth century. The Martins family became a reference for many early Brazilian visitors, some of whom referred to them as the only Brazilian family living in China, and the documentary indicates some possibilities and limits of Brazil-China dialogue. China is a country which, throughout its history, has translated and sought to learn from others. ‘Migration’ should therefore be seen not only in demographic, economic or political terms (e.g. Jayme Martins was forced to leave Brazil after a short visit in 1994 and was welcomed to China as a political exile). Less tangibly, it has a cultural dimension and ideas migrate. Ideas and experiences drawn from Brazil, and built up during our development process, played a role in the feeding reflections that contributed to the building of Contemporary China. Works of important intellectuals such as Celso Furtado, Fernando Henrique Cardoso and Theotônio dos Santos were firstly studied in English and subsequently translated into Chinese. Even today, at social science seminars, we find Chinese colleagues who remember studying their works. With the implementation from 1978 of “reform and opening up,” Deng Xiaoping restored sociology to the curriculum in certain major universities and the Institute of Sociology of the Chinese Academy of Social Sciences was founded. Deng had said: “Most of our ideological and theoretical workers should dig into one or more specialised subjects. All those who can do so should learn foreign languages, so as to be able to read important foreign works on the social sciences without difficulty. We have admitted that we lag behind many countries in our study of the

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natural sciences. Now we should admit that we also lag behind in our study of the social sciences, insofar as they are comparable in China and abroad. Our level is very low and for years we haven’t even had adequate statistical data in the social sciences, a lack that is naturally a great obstacle to any serious study” (Freitas, 2019, p. 14).

3

Reform and Opening Up: Brazilians Move to China

If, as many think, there was only one Brazilian family living in the People’s Republic of China before the reestablishment of diplomatic relations in 1974, 40 years later, in 2014, roughly 16.700 Brazilians were estimated to reside there (Jatoba, 2020). A precise timing of the early migratory ‘droplets,’ and subsequent migratory ‘ripples’ that do not appear to have foreshadow any migratory ‘wave,’ remains to be published. For the time being, a proxy to this may come from the evaluation of Ricardo Schaefer—Adjoint Executive Secretary of the Ministry of Development, Industry and Commerce on the entry of Brazilian enterprises into China. “There was a big first moment of Brazilian companies entering into China, which occurred in the second half of the 1990s, and which carries on until 2005–2006. When companies like Embraco, Vale, WEG and Embraer invested in the Chinese market…. benefiting from the high economic growth of China, at rates superior to 10%…. What we are seeing now, can be considered a second moment of entry… for example, when Brazilian companies open franchises in China or form distribution strategies for the Chinese market. Another example would be through the financial sector… trying to get closer to China. Finally, sectors of higher technology, such as Embrapa studying the possibility of opening laboratories in the Chinese market” (CEBC, 2012, p. 24). The sector of high technology was one of the first in which Brazil established cooperation with China. From the mid-1980s onwards, but this was carried out as scientific and technical cooperation, it did not involve economic transaction. Most Brazilians involved in the CBERS agreement moved back and forth between countries; however, some ended up marrying or living in China where they developed new professional activities. In its earliest days, there were so few Brazilians in China that Jayme and Angélica Martins’ daughters became ‘cultural intermediaries’ helping make social exchanges possible especially in the absence of a lingua franca. In this way, they made a contribution to the development

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of the project, normally seen in its time as the biggest technological cooperation project between two developing countries; however, technological projects are also social, and they can build trust and approximate those who are different. As Professor Raupp explained, “We always wanted to cooperate with Russia and it never worked…. The Indians? We tried several times…. Indians are very complicated…. I don’t know, it never worked with the Indians. I learned that it was not enough to want to do something, countries have to be similar. What I notice with the Chinese is that they are like the Brazilians, happy, joyful people, always open-hearted, joking…. Eating and drinking is what they like the most. The banquets, the toasts with everyone, all this makes people come closer to each other. Today, the openness of the Chinese impresses me, I don’t know how long it will last. They are very easy to access. There are a lot of young people!” (2017, p. 144). The situation observed in the mid-1980s appears to be a far cry from that which Brazilian migrants who led their companies in China, before the pandemic faced, they and their families could have access to assistants who serve as translators, most commonly from Chinese to English, but increasingly from Chinese to Portuguese, their children go to international schools and—should they live in Shanghai and Beijing—they have ready access to international products and services. The origin of this rapid change is that until 1999 only the “University (formerly Institute) of Foreign Studies in Beijing and the University of International Studies in Shanghai offered degrees in Portuguese”; by 2021, over 30 universitylevel undergraduate Portuguese language courses had been approved in mainland China.2 The movement of larger Brazilian companies to China, highlighted and analysed in the CEBC report (2012), was followed by smaller companies. In the decade of 2010, I occasionally met with new arrivals, business graduates, lawyers and others who worked for both Brazilian and nonBrazilian internationalised companies, between China and overseas, in some cases carrying out a wide range of activities, including helping to implant manufacturing, customisation, sales and quality divisions in the Chinese market, and in other cases attending specific demands of the markets at home, or elsewhere.

2 https://www.theportugalnews.com/news/2021-03-13/the-chinese-ministry-of-edu cation-has-authorized-the-opening-of-two-new-degrees-in-portuguese/5.

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The increasing number of Brazilians teaching Portuguese in China was mainly left out of the target audience for this research because I required interviewees to have lived in China for a minimum of three years. In Beijing, I mainly found citizens of Portugal teaching their native language and was informed that Brazilian teachers worked outside of the country’s two major urban centres.

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Methodological Notes

I researched databases of theses and dissertations registered with the Ministry of Education’s (MEC) specialised higher education agency CAPES, the Brazilian Scielo database and international paid databases such as Proquest, all with very limited results. From early 2020, the pandemic meant that normal working relations with reference librarians were interrupted. Television and printed media are today important sources of information, for example carrying news into Brazilian homes about the large community of their compatriots who have settled in Southern China since the late 1990s. Jatoba’s (2020) article ends with a very useful list of links (some broken) to television, web and news items about the Brazilians of Dongguan. This and other journalistic material can serve for other researchers. Also, members of the Brazilian community kept blogs and made other digital publications on their lives and impressions that can serve also serve as research resources.

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Academic Studies of Brazilians in China

In the 1990s, the Brazilian footwear industry started to suffer from Chinese competition, and many of its workers had skills that China did not have, and some manufactures wagered that their company’s chances of survival might be improved by relocating to Southern China. At the time, China lacked a positive image, so higher salaries were raised to serve as an incentive; many pioneers earned five times what they earned at home. However, after the first generation had broken through, the following generation lost fear and migration became easier, subsequent increases the offer of skilled Brazilian migrants ended up contributing to the reduction of wages and benefits. CEBC (2012) reserved a footnote for the footwear manufacture sector installed in Dongguan in the Pearl River basin of Southern China, which did not fall into its sample. This

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same study pointed to Nantong, in Jiangsu Province, as providing good conditions for the installation of Brazilian manufacturing enterprises. It was estimated that the number of Brazilians resident in Dongguan was between 2000 and 3000 in 2018–2019 (Jatoba, 2020). This is reputed to be the biggest single Brazilian resident community in China. The earliest academic study on Brazilians in Dongguan was carried out by Luciana Orsolin (2008) and earned the author a masters’ degree in psychology. She explored the ‘vision’ of five young Brazilian couples, creatively using photographs to develop discussions on their understandings of China and difficulties therein. Much later, Jatoba (2020) published a revealing article about language learning practices, including relating to the choice of Chinese or English as a second language for the children of this community. Carol Porto (2014) defended a doctoral thesis in sociology where she portrayed the difficulties or Brazilian women who had accompanied their husbands’ career moves to Beijing and in doing so had forfeited both their jobs and the autonomy they had acquired back home. Some cases were similar to those identified by Orsolin. Porto examined the complexities of these women’s situations and how they sought to resignify them, and give a new sense to their lives, by joining an association whose work included promoting Brazilian culture, and participating in voluntary support networks. Lucia Anderson da Silva, a rare Brazilian who is fluent in Chinese, and who has work experience in both the Chinese public and private sectors, carried out her doctoral research in social sciences in Beijing and Shanghai. Her research question was backgrounded in years of observations of Brazilian residents, and her thesis built around a series of interviews with male executives (who could have easily have been the husbands of the women who Porto had studied if their studies been carried out simultaneously). It is interesting that the findings of CEBC’s (2012) report had not been absorbed by the companies in question. One of her major findings is that the overwhelming majority of Brazilian executives interviewed had been sent to China without a minimum preparation for their new working and living environment; they and their families arrived unprepared for the culture, the difficulties and the challenges. She permits the reader to understand that such a ‘policy’ creates a lose-lose situation, one that is dysfunctional for the companies, the executives and the families involved (Silva, 2020).

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Over recent years, a considerable number of books have been published by journalists who have worked in China. Some treat numerous curiosities, be they critically, seen as exotic or as great achievements, and the format used often seems to constitute a contemporary version of the journalistic perspectives adopted by those that preceded them: Henfil (1980), Tabajara de Oliveira (1934) and indeed Salvador de Mendonça (1879). Even with all of this work, there are large gaps in our knowledge about interactions between Brazilians and Chinese in China. The material presented in this book, as reflected in its title, concentrates on how China is changing Brazil. In this chapter, I shall do something different, and I shall examine the lives, motivations and perceptions of a small group of Brazilians who work in China and who I interviewed as a part of a particular wider research project. The project is one of three that I have been conducting from my base at Unicamp; I call it the “Sociology of Brazil – China relations.”3 In it, I examine the processes through which social bonds are formed and social life and relations between people are managed as interrelations are built up, especially bi-laterally. I recall Piotr Stompka who was mentioned at the beginning of this chapter, “it is appropriate to treat the macro theme of globalisation at the micro level of the mundane everyday experiences of ordinary people. This implies that real sociality resides in those experiences and the relationships they contain.”4 The bulk of the material that I shall present in the rest of this chapter, published here for the first time, examines the experiences and relationships of Brazilians as they live their lives in China. Between 2011 and 2018, I conducted over 60 interviews with Brazilians who had been living for at least three years in China, and validated

3 This project also has three other foci: (1) comparative sociology, which has led our

team to publish of a total of 6 books, two edited handbooks in English (Dwyer et al., 2018; Li et al., 2013), a book in Portuguese (Dwyer et al., 2016) all three books were at least partly published in Chinese (Jiu et al., 2016; Li et al., 2011; Li & Dwyer, 2022). (2) An examination of issues of communication and dialogue, this project led to the coorganisation of a special issue of Hermès la revue no. 79 (CNRS, Paris) on the BRICS countries, edited by: Arifon, O. Dwyer, T. and Liu Chang. (3) Additionally, teaching activities at both undergraduate and post-graduate levels at Unicamp are carried out, and we have conducted joint activities with IS-CASS (and, within the BRICS Network University, with India). 4 https://www.isa-sociology.org/en/about-isa/history-of-isa/isa-past-presidents/list-ofpresidents/piotr-sztompka.

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some 50 of them. Initial candidates had responded positively to Facebook and other social media requests for an in-depth interview, announced as being made by a sociologist and professor at Unicamp who was studying China-Brazil relations. Interviewees were chosen to permit the formation of as broad a view as possible of the multiple activities of Brazilians engaged in these cities. With two exceptions, interviews were conducted in Beijing and Shanghai. The universe studied ended up excluding Brazilians who lived in Dongguan and Nantong. Also, soccer, a high-profile export, was underrepresented as only one person whose career had been associated with the sport was interviewed. Similarly, fashion modelling was not contemplated. Brazilian diplomats were excluded from my universe; their unique careers and social position preclude most of them from having day-to-day contacts with ordinary Chinese people. On certain occasions, interviewees would be invited to contact friends or colleagues for subsequent interviews—a technique known as snowball sampling. Most interviewees were professionally active, their work covered a variety of areas and sectors, and many were eager to share their deep reflections and queries based on their experiences in China. However, long-term students and housewives were also included. My analysis of the interviews has permitted the composition of a more general picture of how different groups of Brazilians live and conduct their day-to-day lives. Many interviewees were quite frank in revealing their incomprehension of Chinese society, language and culture, but each and every one of those whose interviews were validated proved to be close observers of the country and its peoples, and gave valuable clues about how to live together. All of the validated interviews lasted for over an hour, and some lasted for much longer. In a number of cases, I would end up meeting interviewees on later occasions, either through casual social contacts within the Brazilian community or in pre-arranged contexts. The material I shall present in this chapter is based on just over 10% of the validated interviews, with one female and five male musicians. All say that they work doing what they love, and claim they earn a good living compared with what they would have earned had they remained musicians in Brazil. Indeed, with their gains they educate their children in good schools, travel around China, remit money home, can finance the construction of a home in Brazil and occasionally bring family members to China. Each interviewee transmits eyewitness accounts of their new homeland to Brazilians elsewhere, whether they meet them in China, in

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online contacts or upon occasional visits to home. As a group, these musicians provide a possible work horizon, outside of the traditional musical markets of North America and Western Europe, thereby contributing to project Brazil in China (and eventually beyond).

6 The Live Music Market in China for Foreigners5 An industry source analysed the development of the Chinese industry thus, “Music and related entertainment in China lives an expansion that is only its own in the world. From boom to boom and has done so for quite some time” (Pastukhov, 2022). This market has been generous to Brazilians who operate at the highest levels in this marketplace.6 “[T]he post-90s [generation] grew up listening to music from all over the world, and now, they have the purchasing power to drive the demand for live performances of all shapes and sizes. However, is the industry ready to supply the new type of concert-goer? We have to keep in mind that the Chinese music industry as we know it was born about a decade ago — while most of the traditional markets have more than a hundred years behind their belt. So, while most concert halls across Europe were there 30 years ago, in China, the live infrastructure is still just fleshing out” (Pastukhov, 2022). In this article, I shall examine the actions of Brazilian musicians at a lower level, who earn their living essentially by playing music on a day-today basis. Pastukhov (2022) states, “On the other side of this context are the artists of the smaller scope, that won’t make the headlines of Chinese newspapers — and thus won’t become a subject of big politics. In that case, the process of getting a performance permit is a bit more predictable. Every artist, applying for performance visa will have to submit their setlist, lyrics, audio-visual show material — virtually every piece of content

5 The important Sino-Brazilian Cooperation “Projeto Tropical China” began just before the pandemic on January 6th 2020, and brought about a dialogue between musicians from Brazil and China, lies outside the timeframe of the research for this chapter. https://portuguese.cri.cn/news/china/407/20200106/403012.html (consulted 27 June 2022). 6 https://oglobo.globo.com/economia/parceria-brasil-china/musica-brasileira-ganhaespaco-na-china-24074880 (consulted on 31 March 2022).

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that will be performed publicly — to the local Ministry of Culture department, and based on that information the officials will either allow or deny the entry into the country.” He continues, “In most cases, getting a permit won’t be a problem for smaller artists — unless the act is particularly political, or the lyrics frequently reference drug use or other illegal activities. Be aware though, that the process of getting validation from the Ministry of Culture alone can take up to 6 weeks, and there still will be some degree of uncertainty, since no one can guarantee the final ruling” (Pastukhov, 2022). As our interviewees all work in this segment, and most have been recruited on the basis of personal indications, they typically arrive in China with a visa and guaranteed employment; subsequently, they rely on cultural intermediaries, who predominantly speak with them in English, to help get them through bureaucratic hoops, and out of eventual difficulties.

7

Globalisation and Brazilian Musicians

An important early opening at the very top level of the Chinese musical industry had been provided to Brazilian musicians because of Nelson Pereira dos Santos’ 1977 film “The Highway of Life” (“Estrada da Vida”), shown in China in 1983. This led to an invitation being made by the Chinese government that caught both Brazilian diplomats and cultural elites unprepared. Milionário and José Rico, known as the “Brazilian Golden Throats” (in Portuguese “Gargantas de Ouro do Brasil”), were invited by the Chinese government to do a month-long tour, “singing to 800 million Chinese.”7 Brazilian musicians can be found all over the world and combine tradition and enterprise in forging their professional paths, at the same time as they dialogue with international and local cultures and open up a crack in music to display our musical culture. The Brazilian musicians interviewed inhabit a part of the world where the musical tradition completely different to that in which they have been trained and professionalised. When in China, they are no longer considered exclusively

7 https://www.youtube.com/watch?v=CLaAFTdZep8, see also: https://veja.abril.com. br/cultura/dupla-faz-sucesso-com-shows-de-bossa-nova-em-mandarim/; https://portal. apexbrasil.com.br/becreative-musica-brasileira-encanta-importadores-chineses/ (consulted on 31 March 2022).

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“Brazilian musicians” as they may be at home, they’re “Western musicians”—labelled in this way they find themselves called upon to exercise an ever-widening variety of musical skills. Social psychologist Nisbett authored the “Geography of Thought,” where he theorises about two ‘ideal types’ of music: monophonic in East Asia and polyphonic in (at least white) North America and Europe. “Their monophonic music reflected the Chinese concern with unity. Singers would all sing the same melody and musical instruments played the same notes at the same time. Not surprisingly, it was the Greeks who invented polyphonic music, where different instruments, and different voices, take different parts” (Nisbett, 2003, 7). Nisbett corroborates what many interviewees repeated, “Western music” is fundamentally different to “Chinese music.” The rise of interest in these musicians has reflected a growing demand for “Western’ music,” and especially for live music. Depending on circumstances, playing arrangements may follow traditional and/or contemporary Chinese notions of space, orientation (Feng Shui), networks, visual harmony, etc., which may leave Brazilian performers not comprehending the subjacent logic behind all that is going on, but performing as requested is simply seen as a part of the job. The ‘Sudamérica’ restaurant group has branches in a number of major cities throughout Asia, hires musicians and dancers, and has proven to be of great importance for guaranteeing visas and work upon arrival for some interviewees; other groups in this same industry play similar roles. I also accompanied some musicians in their daily lives, met members of their families and, on subsequent visits to the cities of Shanghai and Beijing, caught up with some by accident as they played in spots that I arrived at with friends or students, and by socialising with them ended up enriching my own observations. After sitting down with the interviewees, normally in a public place such as a café, less frequently in their home or office, I would explain the research, guarantee anonymity and discuss the scope and the objectives of the interview. I typically began by requesting demographic details of the interviewees. Each interview started with an open-ended question: “How did you end up in China?” This group of musicians seemed to have all followed a similar track to China, each was personally indicated by an already-employed musician. Upon arrival, they would typically build, together with professional peers, a series of social networks, the first of

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which functioned like a ‘big family’ (support groups), and the second would give them access to a variety of possible work engagements. Musicians interviewed considered themselves to be victorious in China. This was similar with other professions interviewed in the study: export agents involved with the sale of Chinese commodities to Brazil, those involved with the importation of Brazilian commodities into China, executives and administrators who work in either Brazilian or international companies, all appeared to share similar self-evaluations. For many, the simple fact of being transferred to the country resulted in a promotion. However, the self-evaluations of some students and of women who had abandoned their careers to accompany their husbands to China were less focused on the positive professional consequences of their migration. The musicians appear to work outside of what Wladimir Pomar (2021) has called the “socialist market economy.” Professional musicians in their category, be they in China or in Brazil, sell their labour in the marketplace; however, in China, all of them say the same thing, and they are subject to the State’s watchful eye and the uncertainties of bureaucratic controls. Each has to renew their residence visa twice a year, which introduced a tension into their lives. At another level—to use a soccer metaphor— all ‘dribble’ the system, this is normally done with the help of Chinese agents, sponsors and their business partners. When contracted to play in places not designated in their legal documents, specialist networks are resorted to, and a path discovered. However, in China, they also work within a much more complex system of overlapping networks, subject to reciprocities (‘one hand washes the other’), intermediations, unexpected demands and financial rewards as they move around their city and the country. Some parts of this complex system with which they have to negotiate may rooted in centuries old traditions (after all, was it not the Chinese who invented bureaucracy?), which even today follow rituals and codes influenced by Confucianism and other relevant traditions. One musician, in his forties, who over the last few years had spent a greater part of his time teaching than performing, and who complements his income playing gigs in local European restaurants and parties said, “China chose me, it was out of my reach. I insist that I am much better off in China, without any doubt, with respect to the quality of my life, the sequence of work I obtain, and social status, I would never have achieved this in Brazil.” But what exactly do these interviewees do? One could imagine they play popular Brazilian music (MPB) all over the country, but this is not

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their principal activity, and they are multi-taskers. They record and launch CDs as do many professional musicians worldwide (in the year of this interview, 2017, this market had lost profitability in China, even though releasing CD seems to remain as a part of these musicians ‘career objectives’ (perhaps in a similar manner to which publishing a book remains a sociologist’s one), one may double up as a producer, another compose, as performers they might travel all over China to play in concerts, weddings and in more recent times inaugurations of new real estate projects. Some teach music (both theory and performance, in English or in Chinese languages), and many play locally in restaurants and bars. Contrary to popular belief, they do not only play Latin American music as they do in Latin-themed bars and restaurants, they also play with other foreign musicians, and in their time in China, they have become versatile, playing jazz, European and North American popular music and—every now and again—bossa nova, samba…. Most of my interviewees said they had learnt to sing some of their music, including sambas, in Chinese! As one summed up “I sing in Chinese, Italian, Russian, Spanish and English.” In other words, their key product is musical, but it relies on multiple musical talents, linguistic versatility, and geographical and spatial mobility. How has this phase of their career worked out? The majority replied, as was said earlier, that they have been able to acquire and maintain a living standard that it would have been impossible for them to have had they decided to live off their music in Brazil. Many understand that “local talents are now developing quickly,” for those who have been in the country the longest this is something that was impossible to have imagined upon arrival. A few interviewees believe that the government’s plan is to eventually not need foreign artists to reply to the demands of the local tourism industry. Others are more sceptical, revealing they have been hearing such murmurings for many years. There is more or less a consensus, around a vision expressed clearly by one, “China has transformed my life, I am grateful for this.” Such a vison does not, however, mean that they are passive observers of contemporary China and its development, all seek to ‘take home lessons’ from what they see. When I asked how they explained China to Brazilians, the replies ran along the line advanced by Nisbett that the Chinese have a totally different understanding of things to Brazilians. For Felipe, in his midthirties and who over the last 15 years had spent a decade in China “It’s

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another universe.” To exemplify another interviewee stated “they use the two sides of the brain when they speak.”8 They have also learnt that friendships are made on different bases than in Brazil. “To be a friend here,” for someone to be considered ‘guanxi,’ “in Brazil one doesn’t need to be important, in China, Yes.” But this particular interviewee’s ideas of ‘guanxi’ are based upon what he has witnessed in his position in the labour market as he plays in different bars, “in this sector – which is a new sector in China and one that is not in sync with the country’s traditions – it’s necessary to have guanxi to stay open.” I conducted one of my interviews with a musician in a quiet corner of a bar installed in an old mansion in Shanghai’s French Concession. The bar, he told me, was the property of the Peoples’ Liberation Army, which rented it out; the tenant used this fact to illustrate his powerful connections whenever cases occurred that resulted in difficulties with the local police. Relations between the people and the State are constantly commented upon. For another musician, “the Chinese government and the people remain at a distance from one another… in other countries [I see] the people pressuring the government, the government here stays in its place [distant from such matters].” The Chinese people “are very docile, they are not malicious as is to be found in Latin America” opined a musician in his early forties and who had spent six years in China. Many Brazilians talk of China as a ‘surveillance society’ and try to explain this to friends back home. Interestingly, this concept does not meet with wide opposition among the interviewed members of the Brazilian community, principally because it isn’t seen as affecting their day-to-day lives. “The internet is supervised freedom, but this doesn’t affect me, what I need to access I can. They [the government] can take control of everything: what I do, where I work, they try to see if I am a threat to the system. I’ve never had a problem, I can’t complain.” Maria Lígia has lived for a decade and a half in China; she declared things have gotten “serious, they examine your DNA, test to see if you’re taking drugs, they are always checking up on musicians.” This idea was corroborated by others. She told of having once been caught working in a different city without the appropriate papers and was taken to the Police station. However disagreeable this incident may seem, she pondered “they 8 See https://www.languagemagazine.com/tonal-languages-use-both-sides-of-thebrain/ (consulted on 31 March 2022).

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treated me really well in the Police station,” but she contrasts this “here in Shanghai they don’t treat you well…. They even had a Portuguese translator, they knew they were going to catch me.” As a result “I had to change my visa to work in a different bar. The law changes all the time.” But, she added, a game of cat and mouse is constant, involving the authorities, premises’ owners, agents and musicians. Also, the smaller the city, the less likely it is that ‘real problems’ will appear, unless the local leader is a member of a moralist or an anti-Western group in the administration (which is run by politicians and the police). If in ancient times local autonomy in China was defined by the distance from the Emperor, as in the expression, “The mountains are high and the Emperor is far away.” In these musicians’ view of contemporary China, it seems to be defined by the distance from Beijing and Shanghai. Chinese people are seen as very different to Brazilians, “they don’t know how to hug, nor to touch each other.” His next sentence suggests a preference “the children of Chinese-Brazilians want to go to Brazil, they like it there.” But interviewees always pay attention to the problems that exist in Brazil. They frequently comment on China and especially on its lack of criminality and interpersonal violence, a fact which attracts attention and comparisons. “I didn’t live in peace in Brazil” says the Maria Lígia. The Chinese people, she adds, believe that “impunity generates delinquency.” Such an idea dates back at least to the Qin Dynasty (221–207 BC) which established the country’s first centralised Chinese empire. Qin officials had written a legal code, to protect the weak from the strong. Called ‘Legalists’ they defended harsh punishments for legal violations in order to combat social breakdown, as manifested in crime and disorder. The musicians debate public safety and its relation to freedom. Given the levels of interpersonal violence in Brazil and social peace experienced in China, a question that is asked by all is thus resumed: “[T]o what point is freedom viable [as a concept] for a country like Brazil?” Interviewees also analyse the speed of Chinese economic and urban development, and how this is leading to a widening gap between our two countries. “Why not take the system of government used here and put it in place in Brazil?” Such a simplistic vision is common among Brazilian interviewees in many professions. In countries within China’s orbit, including Brazil, ‘Chinese ideas’ and techniques spread in a myriad of ways, sometimes they have complexly cosmopolitan origins, such as: investment in transport infrastructure (Qin,

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2016), poverty elimination (Dwyer, 2021),9 instant payments [‘pix’ in Brazil],10 public telephone booths in the shape of big ears (‘orelhões’),11 5G technologies and university studies. We can already see certain Chinese inventions and the cheapening of manufacturing and commercialisation costs provide multiple opportunities for people to transform their actions; this is perhaps the most visible and strongly supported Chinese contribution to changing Brazilian consumption patterns and living standards, especially for poorer Brazilians. An interviewee, whose job led her to conduct consumer-oriented public opinion polling market research in China, told of a chance meeting in the elevator of her Shanghai home, with a Chinese man who knew Brazil; he summed our country up with three characteristics: “Blue sky, happy and creative people.” One musician opined vaingloriously, “Brazilians are creative and could conquer the world.” There are many different diagnoses made of Chinese society and its functioning, and on numerous issues, a degree of consensus is to be found among interviewees. A musician in his late 40 s, who had lived 5 years in China, said, “They have a strange way of making things work. Laws don’t exist and there’s a hierarchy here that… [persists] independently of our intention to change it…. you don’t question hierarchy.” He points out that inequality will perpetuate itself for a long time. Another interviewee notes that there is a hierarchy for foreigners: “blacks, Latins and Asians each do different jobs.” In China, different races, he added, are seen as though they are different species. Another musician, of mixed-race descendency as many of his peers, whose child was born and brought up in China, when discussing such questions, said, “In two decades I’ve never had a problem, I can’t complain.” Then, he launches a common philosophical/explicative argument developed by numerous Brazilian interviewees, “The difficulty of China is to administer so many people. Compare this with Brazil where we can’t even agree on a common idea” [for the country]. Another opined, “we’re a baby compared with 9 “Instant payments are credit transfers that make funds available in a payee’s account

within ten seconds of a payment order being made.” https://www.ecb.europa.eu/paym/ integration/retail/instant_payments/html/index.en.htmlThe system developed by Brazil’s Central Bank—pix—was inspired by China’s system. 10 How 5 countries adopted instant payments. https://dock.tech/en/blog/pagame ntos-instantaneos/ (consulted on May 2022). 11 https://www.orelhao.arq.br/ (consulted on 31 March 2022).

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China” such a notion was shared by both Brazilians and Brazilians of Chinese or Japanese origin interviewed in my wider study. There is a genuine feeling that the Chinese government works for its people. This is especially underlined by those interviewees who spontaneously contrast the two countries. “The government puts the country out in front.” This is seen as a two-sided coin by a musician who has been nearly two decades in China, “The Chinese people are controlled by the government. The government does many things for the people…. Does things that are needed: trains, highways, infrastructure.” Indeed, among interviewees parts of “the Chinese model [are] presented as an alternative to the Western model which defines itself as universally applicable” (Zhang, 2018, 289). These musicians are generally cultural relativists, while they may infer Western motives to Chinese practices (e.g. ‘racism’ was just mentioned). In their working lives, they exhibit patience as they wait for answers to unfold, and they have learnt to never get angry (they have learnt to avoid, at all costs, the importance of never losing ‘face’). They observe closely before talking. Highly talented, they are studious and have a strong work ethic. A saying attributed to Confucius helps us understand: “Choose a job you love, and you will never have to work a day in your life.” As people who live off their art and as foreigners, they feel respected and have considerable status. As said before, when confronted with nonmarket difficulties in the exercise of their profession, they step back and trust Chinese intermediaries and relevant actors to come up with solutions. They live constantly with lack of privacy. Most importantly, they perceive they will never fully understand what is going on. Humility, being relaxed about differences, work and success appear to go hand in hand. Most of my interviewees, spend or in the past had regularly spent, short periods moving around the country, have visited key cities in China’s immense interiors and along the coast. They are also semi-public people, after a gig they may sit down and talk, mostly to members of the Brazilian and Latin communities, for Nivaldo “lots of people complain and keep on smiling.” A big problem is seen clearly by members of this small community, “The problem is these Brazilians are not learning to negotiate with China.” “Brazilians are not good expatriates, they are full of prejudice.” Or, “the Brazilian needs to be more pragmatic, and less euphoric with regards China.” For the musicians who constantly negotiate their lives and

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careers, and in some weeks do this on a daily basis, most other Brazilians appear to be in a state of acommunication (Wolton, 2019); they do not attempt to negotiate; and they live aloof from the society to which they have migrated. In both their private lifestyle and their work environment, they have chosen to live an expatriate’s life. The musicians work in multiple situations and socialise mainly with fellow expatriates be they musicians or otherwise. However, some interviewees socialise more than others with Chinese people, and they share with Professor Raupp the impression that, “the people are lively and fun… [often] it’s difficult to understand, but they adore a laugh.” Interviewees were also asked what they would do differently it they were to have their time in China again? The musicians differ from other Brazilians who mainly lament not having learnt the language or developed friendships with Chinese people. Some musicians told of those who had married and had Chinese children. One met his wife while playing on a long-term contract in Northern China, and he saved up and bought a house, which led to family approval for his marriage. He explained that his in-laws are Muslims, but religion does not stop his father-in-law eating pork and drinking beer! His extended Chinese family now lives in his city apartment along with his wife and daughter. On several occasions, I saw a Chinese musician playing with Brazilians, the same person on most occasions. He seemed like a piece of the scenery rather than someone with a vocation for music. Some Brazilian musicians appear to be close to their agents. But, let me warn the reader that these are just passing impressions, they are not the product of in-depth sociological research necessary, complete immersion in Shanghai’s and Beijing’s Brazilian communities for months on end. A more robust observation was that in Shanghai and Beijing socialising typically occurs with Latins or more specifically Brazilians. Some may hang out occasionally with Europeans and have a preference for members of the Portuguese and Spanish-speaking communities. Interviewees typically did not talk of socialising with Africans (not even Portuguese-speaking Africans), and their main contacts with North Americans appear to have been with non-musicians. Those who had lived in smaller and less cosmopolitan cities reported having greater social interaction with Chinese people, other foreigners, and in such cases lived physically isolated from other Brazilians. Less so than any other professional group interviewed, the musicians do not universally regret their lack of language skills. There is an

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old English saying about this—that “necessity is the mother of invention”—most have had to develop either a working-level knowledge of the language (as few as 300–500 Chinese characters), and/or work with cultural intermediaries who construct a ‘bamboo bridge’ for expatriates; they provide technical and linguistic support, represent the musician in negotiations and make sure they keep out of trouble, and the smartphone is their work instrument and office. Chinese cultural intermediaries typically speak English and serve as fire-fighters in a fast-moving and liquid society (Bauman) as well as the largest single nation in the world based on what appears to outsiders to be a highly uniform Han society, anchored in millenarian traditions and which combine to shape day-to-day life. As for the agents, they negotiate both gigs and the bureaucracy on the musicians’ behalf. In other words, they serve as interfaces.

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Policy Recommendations

Given the lack of knowledge in Brazil about China (and the economic and political importance for Brazil of the world’s most populous continent—Asia), it is necessary for all levels of the education system and in all disciplines—from mathematics to world history to modern languages, to incorporate reference to Chinese and Asian thought, history and accomplishments. Such learning will permit Brazil to develop a general view of the continent based on widespread public knowledge and familiarity, rather than ignorance and exoticism as at present. We live under the threat of the ‘clash of civilisations’ (Huntington, 2011). It is necessary to avoid war. To do this, Brazilians must keep options open, get to know the other, trade with the other and develop a public understanding of how we can avoid being drawn into a cultural conflict that pits the East against the West, a conflict that is not of our own making. One of the major aims of the BRICS. Network University (BRICSNU), expressed in the MOU that led to its foundation, is the formation of what I have called a generation of ‘cultural intermediaries’ of “highly qualified and motivated professionals” who are capable of interacting across cultures “of combining traditional knowledge with science and contemporary technologies.”12 To do this, it is necessary to develop the 12 https://we.hse.ru/data/2017/09/10/1172330598/MoU_SU_BRICS.pdf (consulted on 22 May 2022).

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idea and the profession of cultural intermediaries, who are capable of explaining to and influencing the Brazilian press, and explaining to the public that, just because people are different, this does not mean that Brazil should side with the West as it (re)affirms its right to punish or to destroy the other. But Brazil is a neo-Western country and cannot abandon its cultural roots, nor its heritage and position in the world. Teitelbaum (2020) in “War for Eternity” details of a meeting in the US State Department, at which Olavo de Carvalho—a lackey of Steve Bannon and close to Brazil’s (at the time) future president Bolsonaro— was encouraged to undermine the BRICS in order to damage Brazil’s main trading partner, China. As of 2017, the Brazilian Ministry of Education (MEC/CAPES) prematurely contributed to the achievement of this objective in the field of higher education by withdrawing support from the BRICS Network University (a move it never announced publicly). In any future minimally patriotic government, such a move will be reverted, and the original spirit of BRICS-NU preserved, but its administrative project will require reformulation, and a model of financing will need to be built. By then BRICS will probably be very different from today. I believe that one of the reasons for the relative success of the BRICS is that there are only five countries, this limits the complexities of debates, and speeds up processes—and just the BRICS represent over 40% of the world’s population. But incorporating more nations into constructive dialogue with BRICS to resolve mankind’s greatest problems is essential. Last but not least, a question raised a decade and a half ago repeats itself, what has been learnt since it was raised, and what still needs to be done? Can social science research be relevant to relevant policy development? “We, from our side, need to define what our game is. It’s possible to play with the Chinese, but if they are the only ones with strategic objectives and know what they are looking for, with this game we won’t do very well…. In the mid-term it depends on our capacity to formulate our own proposals and implement them” (Cardoso, 2006, pp. 653–634).

References Alameida, F. (1879). Da França ao Japão. China, Japão e outros países. Tipografia do Apóstolo. Arifon, O., Dwyer, T., & Liu, C. (Eds.). (2017). Les BRICS, un espace ignore. Hermès n 79. CNRS, Paris.

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Cardoso, F. (2006). A Arte da Política: A história que eu vivi. Civilização Brasileira. CEBC. (2012). Empresas Brasileiras na China: Presença e Experiências.Centro Empresarial Brasil-China. https://www.cebc.org.br/sites/default/files/pes quisa_presenca_das_empresas_brasileiras_na_china_-_presenca_e_experiencias. pdf. Accessed 21 May 2022. Dwyer, T. (2021). Do macro ao micro, desenvolvimento e combate à pobreza na China rural. China Hoje, 36(1), 60–64. Dwyer, T., Gorshkov, M., Modi, I., Li, C., & Mapadimeng, S. (2018). Handbook of the sociology of youth in BRICS countries. World Scientific. Dwyer, T., Zen, L., Weller, W., JIU, S., & GUO, K. (Eds.). (2016). Jovens universitários em um mundo em transformação: uma pesquisa sino-brasileira (p. 311). IPEA. Freitas, M. (2019). Reform and opening-up: Chinese lessons to the world. Policy Center for the New South. Policy Paper. https://www.policycenter.ma/sites/ default/files/PCNS-PP-19-05.pdf. Accessed 21 May 2022. Guimarães Filho, L. (1911). Samurais e Mandarins (2nd ed. 1925). Francisco Alves e Cia. Henfil (Henrique Souza Filho). (1980). Henfil na China. Record. Huntington, S. (2011). The clash of civilizations. Simon & Schuster. Jatoba, J. (2020). Planejamento linguístico familiar na diáspora brasileira: considerações sobre a comunidade brasileira em Dongguan, China. Revista Diadorim, 22(1), 40–56. https://doi.org/10.35520/diadorim.2020.v22n1a 32019 Jiu, S., Guo, K., Dwyer, T. (2016). Zen. L. e Weller., W. Bian Ge Shi Jie Zhong De Da Xue Sheng—Zhong Guo, Ba Xi Bi Jiao Yan Jiu. Pequim, Social Sciences Academic Press. Li, C., & Dwyer, T. (2022). The Youth and social development: A comparison between China and Brazil. Social Sciences Academic Press. (in Chinese) Li, P., Gorskkov, M., Scalon, C., & Sharma, K. (2011). Jin Zhuan Guo Jia She Hui Fen Ceng: Bian Qian Yu Bi Jiao. Social Sciences Academic Press. Li, P., Gorshkov, M., Scalon, C., & Sharma, K. (2013). Handbook of social stratification in the BRIC countries. World Scientific. Lisboa, H. (1888). A China e os Chins. Typographia a vapor de A. Godel, Montevideo. https://purl.pt/32681/2/. Accessed 31 March 2022. Martins, M. (1958). Ásia Maior – o Planeta China. Civilização Brasileira. Mendonça, S. (1879). Trabalhadores asiáticos. Novo Mundo. Nisbett, R. (2003). The geography of thought: How Asians and westerners think differently—And why. Free Press. Oliveira, N. (1934). Shanghai: Reportagens do Oriente. Nacional. Orsolin, L. (2008). Carto(foto)grafando o encontro de migrantes brasileiros com a China (Dissertation). Universidade do Vale do Rio dos Sinos, São Leopoldo.

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Pastukhov, D. (2022). Inside the Chinese live music industry. Music Market Focus: China Part 2. https://soundcharts.com/blog/chinese-live-music-tou ring. Accessed 22 May 2022. Pomar, W. (2021). Comentários sobre a Economia Política Chinesa. In R. Musse (Ed.), China Contemporânea: Seis interpretações (pp. 69–93). Autêntica. Ponte de Bambu: Uma família entre o Brasil e a China. (2020). Directed by M. Machado. Globo Filmes, Beijing, Jundiaí. Porto, A. (2014). Chega de Samba: estratégias de recriação da identidade pelas brasileiras em Pequim (PhD thesis). Universidade Federal do Paraná. Raupp, M. (2017). Les satellites, exemple de coopération entre le Brésil et la Chine. Hermès La Revue, 79, 140–144. Silva, L. (2020). Executivos Brasileiros na China: Adaptação e Dificuldades em Empresas Brasileiras (PhD thesis). Unicamp. Studart, H. (1979). China: o Nordeste que deu certo. Nosso Tempo. Teitelbaum, B. (2020). War for eternity: Inside Bannon’s far-right circle of global power brokers. Dey Street Books. Teixeira Leite, J. (1999). A China no Brasil. Editora da Unicamp. Qin, Y. (2016). China’s transport infrastructure investment: Past, present, and future. Asian Economic Policy Review, 11(2), 199–217. https://doi.org/10. 1111/aepr.12135. Accessed 31 March 2022. Wolton, D. (2019). Communication, incommunication et acommunication. Hermès, La Revue, 84, 200–205. Zhang, L. (2018). La Chine desorientée. Éditions Charles Léopold Mayer.

Traces of Chinese Culture in the Roots of Brazil André Bueno

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Introduction

The beauty of Brazilian baroque art is everywhere in the streets of the cities of Ouro Preto, Sabará or Diamantina, in the state of Minas Gerais. It is an art inherited from the time when Brazil was a colony of Portugal, as evidenced by the architecture of houses and churches, their decoration and ornaments. Great anonymous artists were part of the Brazilian Baroque: slaves, foreigners and humble artisans, but not only them, worked to create masterpieces of art. They can be compared to the most beautiful works in Europe, but they carry the traits of a nascent Brazilian identity (Bazin, 1983). For most visitors, some important details go ignored in these cities, and it is in the details that the secrets hide. As a phrase commonly attributed to Confucius and common in Chinese popular imagination goes, ‘Sage is the one who makes the obvious evident to all’. The same is true for those who travel through these cities and recognize the traces of Chinese art in monuments and churches. There are thousands of high-tiled roofs, just like the traditional Chinese house Hutong; murals with Chinese landscapes painted

A. Bueno (B) University of the State of Rio de Janeiro, Rio de Janeiro, Brazil e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_2

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inside the churches; doors with traditional motifs and walls decorated with dragons and phoenixes. A ‘dragon-alligator’ shaped lamp in the church of Pilar in Ouro Preto shows the inventiveness of the crossing of cultures; all these elements are marks of a Chinese presence—or of Chinese inspiration—that permeate the existence of these cities. When one is trained to detect these particularities, the phenomenon reveals itself also in some of the oldest cities in Brazil: in Paraty (in the state of Rio de Janeiro) or Salvador (Bahia), where these marks are obvious. In the Museu da Ordem Terceira do Carmo, in the city of Cachoeira (also in Bahia), there is an unprecedented group of seven statues of Jesus Christ, represented in all of them as Chinese. Who were these anonymous artists? Were they Chinese, or was it merely a ‘Chinesice’, a copy of Chinese motifs, like the Chinoiserie fashion that existed in the eighteenth century? And if they were just copies, who taught Brazilian artists to make them? This work goes on until today, and the rediscovery of these ancient Chinese signals is recent (Longobardi, 2011; Torelly, 2019). But we are still scratching the surface of a much deeper question: how much has Chinese culture influenced Brazil? And why can’t we recognize Chinese traits in our cultural roots? In this essay, I will discuss how Chinese culture has contributed to Brazilian culture and society since colonial times. I will also show how this topic was studied by Brazilian intellectuals, the problems and views on how the Chinese presence was historically perceived.

2

Colonial Brazil (Before 1822)

Brazil has a long history of relationship with Chinese culture. At the time of the Portuguese empire, the country was already part of a world in motion, where persons, things and ideas traveled from one side to the other. Portuguese, Brazilians, Indians, Chinese and Africans moved through the colonies, exchanging culture and customs. As for the Chinese, specifically, More numerous than is generally believed are the references to Chinese articles in Brazil, in documentation and chronicles, mainly from the 18th and early 19th centuries. Tea, medicines (Chinese root, rhubarb, etc.), fabrics of various qualities (silks in general, Nanjing silk, handkerchiefs, blankets, garments, satin bedspreads, Nanjing denims, etc.), paintings on

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paper and silk, fans, ladies’ ornaments, character boxes, crockery in general, vases, porcelain, “Macao crockery”, furniture, art objects, fireworks, etc. (Moura, 1995, p. 32)

The phrase is from the researcher Carlos Francisco Moura, who has worked to identify the material influences and the Chinese presence in Brazil, as well as the Brazilians who went to the Far East in the colonial period, which lasted until 1822 (Moura, 2014). People such as Antônio Albuquerque Coelho (1732) and Lucas José Alvarenga (1828, 1830) were born in Brazil and became governors of Macau; José de Aquino Freitas (1828) wrote the first official history of Macau; meanwhile, the Chinese were hired to work in Brazilian shipyards (Moura, 2014) or to form the first tea-planting community in the West (Moura, 1973, 2012). If, on the one hand, Brazil received inflows from China, on the other hand, it is certain that many Chinese circulated in Brazil and remained here.

3 Brazil Empire (1822–1889) and the ‘Question of Chin’ Throughout the nineteenth century, with Brazil already independent after 1822, the arrival of the Chinese to the country continued to be an important topic of debate. In an area that is practically being discovered now in history, discussion about hiring free Chinese workers to replace enslaved labor was one of the central themes of Brazilian political life, and it spanned decades until it was replaced by Japanese immigration only at the beginning of the twentieth century. The movements of this debate— the ‘Question of the Chins’—currently have an increasing research, but it is far from being over (Czepula, 2020; Dezem, 2005; Lee, 2018; Lesser, 2001; Peres, 2013; Santos, 2020). The possibility of the Chinese coming to Brazil directly influenced the discussions on the abolition of slavery, eugenics, racism, prejudice, xenophobia and work relations that permeated the formation of the Brazilian mentality. Chinese groups did land in the country, but their number was not impressive. Great Brazilian intellectuals, such as Quintino Bocaiuva, José do Patrocínio, André Rebouças, Joaquim Nabuco, Miguel Lemos and Machado de Assis, established a deep debate on the relationship between China and Brazil. Their production helps us understanding political, social and cultural ideas of his time. The last decades of the nineteenth century marked the beginning of

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a Brazilian sinology project, with the writings of Salvador Mendonça (1879) and Henrique Lisboa (1888), whose works were read not only in Brazil, but also in France and the United States (Bueno, 2021a, b). In another sense, the Chinese also developed projects to colonize Brazil on a large scale. Fu Yunlong (2019) was in the country in the last days of the empire, toured several regions and wrote a series of ten volumes on the most diverse aspects of Brazilian culture and society. Based on Fu’s positive impressions, and talking to Macao merchants, the great intellectual Kang Youwei (1967) considered creating a ‘New China in Brazil’, building a new hybrid civilization of Chinese and Western matrices. For him, The only region in the world where the Chinese, driven by political disorders and economic pressures, can migrate and colonize is Brazil. The latitudes and longitudes of Brazil correspond to China’s. There is land several thousand Li in extent along the Amazon River that is rich and fertile, and the population there is only eight million. If we move our people there, we can build a new China. (Kang, 1967, p. 78)

The project also failed in China by unknown reasons, but it is clear that some Chinese intellectuals had a lively interest in Brazil (Bueno, 2021b). Unfortunately, the victory of opponents against Chinese migration in Brazil meant the affirmation of the Eurocentric model, which many Brazilian intellectuals wanted to copy; and consequently, the erasure of much of the memory linked to the contributions that the Chinese made to the country.

4

Rediscovering the Chinese Traces in Brazil

For this reason, Brazilians know very little about their Asian roots. It was in 1936 that Gilberto Freyre, a renowned Brazilian intellectual, published one of his most important books, Sobrados e Mucambos (in English, ‘The Mansions and the Shanties ’). In the first edition, Freyre outlined an idea that would become a special chapter in later revised editions: the presence of the Orient in colonial Brazil. In the search of these ‘oriental’ traits, Freyre wanted to show that before the Portuguese court fled to Brazil in 1808 because of the Napoleonic wars, Brazil was an Oriental, African and indigenous country that little resembled Portugal. The aspects highlighted by the author included elements from India, the Middle East,

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Malaysia and China, presenting them together. However, Freyre managed to separate the origin from customs and practices, showing how they were gradually incorporated into Brazilian daily life. On this influence, he commented that: The truth is that the Orient came to give considerable substance, and not just some of its most showy glimmers of color, to the culture that was formed here and to the landscape that was composed here within predominantly patriarchal conditions of human coexistence, in general, and exploitation of the earth by man and of men of one race by another in particular. And not only substance and color to culture: the Orient contributed to enlivening the lordly and servile forms of this coexistence among us: the hierarchical ways of living man in the family and in society. Ways of living, dressing and transporting that cannot have failed to affect ways of thinking. (Freyre, 2013, p. 466)

In this fragment, Freyre makes a summary list of Asian and African contributions to Brazilian culture. It is just the introduction to his chapter on the Orient in Brazil, in which he would discuss these arguments. However, two fragments are very significant for us: ‘And not only substance and color to culture: the East contributed to enliven the lordly and servile forms of this coexistence among us: the hierarchical ways of living man in family and in society’ and ‘It is as if ecologically our kinship was more with the Orient than with the Occident’. Before going through the Europeanization project imposed by the Portuguese royal court at the beginning of the nineteenth century, Brazilian society was linked to different cultural matrices, which profoundly influenced its habits and customs. Chinese products such as porcelain and silk marked an important social and material distinction; but objects like the fan became popular, being found in all strata of the population. Colonial elites adopted the Chinese mandarins’ habit of growing fingernails, indicating their power through indolence. In the material sphere, Brazilian material life gradually became permeated by the symbols and evidence of this Chinese presence: the rush mats and palanquins of the Orient; silks, porcelains, perfumes and fans from China; and even the custom of adults, and not just children, amused themselves by releasing oriental fireworks and flying tissue-paper kites in the Chinese manner. Custom - that of adults flying kites, as a form

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of noble or honorable recreation - that would come to almost our days. (Freyre, 2013, p. 471) For you cannot conquer the tropics without somehow overshadowing it in the fashion of the Arabs or the Orientals. Nor without narrow streets, shawls, parasols from the coast, vast oriental umbrellas for walks under the sun on the hottest days, the shadows from large Asian and African trees, such as mango, jackfruit, gameleira, around houses, in squares and along roadsides. Nor without concave tile on buildings, wide eaves upturned at the finish in moon horns, squat-roofed houses in the style of Chinese pagodas. (ibid., p. 473)

Freyre’s conclusion was that Brazil, finally, was a space of intercession between Orient and Occident, being more linked to the latter: But it was not only ecologically that Brazil, officially colonized by Europeans, had come so close to the Orient and, through the Orient’s cultural experiences and instruments, had adapted to the tropics to the point of becoming, in many ways, a its organization and landscape, an undecided area between Orient and Occident. Area that would sometimes stand out as Orient rather than Occident. (ibid., p. 473)

It should be noted that Freyre, as we said before, understood the ‘Orient’ as a vast group of peoples who were in relationship with Portugal through the empire, and therefore, he did not find it strange to bring China closer to India or the Middle East. Two reasons supported this writing strategy: the first is to create a vision of the cultural destinations of Brazil in a generalizing and structural profile. The second is that Freyre, despite his extensive research, did not know (and nor was an expert) in the archives and sources on the Chinese presence in Brazil, which limited his presentation. In a very intuitive way, he perceived the strong Chinese presence in the country, but specifying this approach—like any other—would lose the focus of his work, which consisted in revealing the originality of Brazilian culture. Even so, he would carry out a series of essays on Brazil’s relations with Asia—mainly with China—that would form a book with the suggestive title of China Tropical (‘Tropical China’, 2003); in short, a resume of what Brazil would be in its origins.

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The ‘China in Brazil’ by José Leite

Gilberto Freyre’s work was the source of inspiration for the paradigmatic book A China no Brasil (China in Brazil: Chinese influences, marks, echoes and survivals in Brazilian art and society), by José Roberto Teixeira Leite, published in 1999. The author is an art historian, and with his training in visual and aesthetic art, he can see the innumerable evidences of the Chinese presence in Brazil, initiating a detailed material, literary and historiographical survey. It was with this material that he defended his doctoral thesis in Fine Arts in 1994 at the University of Campinas, and five years later, with more evidence collected, the work was finally published as a book, becoming one of the most important books on Asian presence in Brazilian history. ‘China in Brazil ’ was the first extensive survey of the Chinese presence in the country, and of how it influenced cultural and material life, according to the ideas proposed by Gilberto Freyre. In a work that brings together years of experience and research, José Leite divides his work into the following chapters: a historical introduction to the problem; a presentation of Chinese customs and habits that were imported by Brazilians; Commerce, Agriculture and Immigration; Architecture and Landscaping; Sculpture, Painting and Decorative Art; finally, some annexes with questions to be discussed about the Chinese presence in Brazil. As the author detailed, his intention was precisely to bring together the various knowledge produced on the subject, forming a coherent and powerful image of the Sinic presence in Brazil: The problem of the influences that China exerted on Brazil has been discussed from time to time by a limited number of researchers and scholars, both national and foreign, and it is fair to highlight in this sector, above all others, the pioneering and in-depth contribution of Gilberto Freyre. Only in Chapter IX of his book Sobrados e Mucambos (Orient in Occident), which appeared in 1936 and which would become the starting point for all those who, in the next fifty years, would become seriously interested in the subject, leaving aside the fantasies and inventions that also aroused (...) If such approaches had already been made, each one focusing on a given topic within the problematic of the influences exerted by the old China on the young Brazil, until the present moment no one had tried to study them together and no longer in isolation, with a view to building a comprehensive scenario, beyond specializations or sectorizations. (Leite, 1999, pp. 7–8)

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Let us note here the orientation of Gilberto Freyre as the epistemological path adopted by José Leite to develop his work. The central hypothesis of his work was that the Chinese were present in Brazil since the beginning of the country’s colonial history, already in the colonial period, and the material and documentary evidence were available for a semiotic analysis, leading to a necessary rewriting of Brazilian history: Indeed, over four centuries - from the second third of the 16th century to at least the second quarter of the 19th century (when the country suddenly and almost forcibly converted to the Occident, becoming French and English overnight, regret of having remained for so long an Indian, African or Asian and ashamed of having been if not in the mentally red, black and yellow epidermis before trying to be white), considerable Chinese influence reached Brazil, assuming among us specific forms and unmistakable connotations, that would be translated in due course into habits, ways of living and doing that even today are far from being exhausted, deeply rooted as they are in the national soul. And note that we are not dealing here with chinoiseries or chinesices, China of fantasy or lie, invention of Europeans that we also had at a given time, but with authentic Chinese influence, the impact of Chinese ideas, habits, techniques and ways of life about Colonial Brazil or from the time of the Empire; under this aspect, it seems to us that Brazil is a unique case in the world. (Leite, 1999, p. 11)

The book was impressive and revealed a little-known dimension of Brazilian society. Simple things like: wearing an umbrella in the sun, dressing in silk, ‘kissing’ with a scent, using fireworks, flying kites, the nineteenth-century foot fetish, the cockfight, the pagodas and bandstands scattered around the cities, the architectural styles, all these elements were naturally understood as ‘Brazilian’ (or ‘European’) by most people and researchers. The discovery that these items were ‘Chinese’ was thrilling. And that was just the beginning; examining the Chinese presence in art and architecture was the impetus for the research we mentioned at the beginning of this essay, which continues to discover more and more evidence and marks of Chinese artistic culture in Brazil. Much of this evidence predates the period of Chinoiserie fashion in Europe and apparently did not undergo any reinterpretation of Portuguese art, strengthening the idea that many Chinese artisans worked in colonial Brazil. In the two final parts, we can find a list of the ‘Chinese’ works and monuments spread across Brazil, serving as a guide for those who wish to delve deeper into this research.

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José Leite was one of those responsible for showing how this contact with China revolutionized Brazilian life. The inclusion of rice in Brazilian cuisine has completely changed Brazilian eating habits, in such a way that the popular expression ‘guarantee rice-with-beans’ means, in Brazil, synonymous with basic food security. Once again, China and Africa meet in Brazil to form new habits. As we mentioned earlier, Brazilians also consume numerous types of tea—although it is not Chinese tea, which was tried to be cultivated in the country—the habit was incorporated by the population, which makes different types of infusions with native plants. Finally, the ‘pastel’—stuffed dough fried in oil, and one of the most outstanding and appreciated items of Brazilian cuisine—was inspired by the traditional Chinese ‘chunjuan’, ‘roubing ’ and the ‘gaodian’, and became one of the most popular snacks. We can say that many Chinese immigrants who arrived in Brazil in the twentieth century went to work in the restaurants and snack bars, which reinforced in the Brazilian popular imagination the connection between the ‘pastel’ as a Chinese heritage. Another technological revolution brought from China was the Monjolo (in Chinese, shuiti), a kind of rudimentary water-powered mill, which spread rapidly throughout the colony from the sixteenth century onwards. This device transformed the work of peeling grains of rice, corn, coffee, among other products, and became popular throughout Brazil. Its simple mechanics and easy construction made it the main mill in Brazilian plantations for centuries, and even today, it is used by small farmers and has been revived as an ecological and cheap solution for grain processing. Not just in art, but in everyday life and even in the most basic act of eating, Brazilian society experiences habits and ideas from China. As we can see from this succinct and punctual presentation, the book ‘China in Brazil …’ has become the reference and starting point for all those who intend to study the relations between Chinese and Brazilian culture throughout history. The author also made a list of documents on the subject and highlighted a list of authors who analyzed the issue, showing a significant critical fortune. This survey was very important, showing that other authors had noticed the presence of China in Brazilian history and culture, but without building a network effort. The work of José Leite thus became a fundamental guide for the study of these issues and revealed to the Brazilian public the depth of his Sinic heritage. It is also worth remembering another work by the same author, ‘A Companhia das Índias e a Porcelana Chinesa de encomenda’, from 1986. Although it

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anticipate ‘China in Brazil…’, José Leite announced, there, the rich material collection of the Chinese porcelain that circulated in Brazil, another vast and little explored theme in Brazilian art.

6

News Studies on Chinese Presence in Brazil

After ‘China in Brazil …’, other books have already appeared, deepening research on Chinese brands in the country. It is worth noting the artistic survey carried out by Júlio Bandeira, ‘O Brasil na Rota da China’ (‘Brazil in the Chinese Route’, 2018), which specializes in identifying Chinese artifacts scattered in Brazilian collections and museums, further increasing the wealth of information about the theme. This survey shows that Brazil not only imported substantial amounts of porcelain, works of art and furniture, but reinforces the idea that Chinese artisans came to the country to work in the most diverse fields—not only in construction, but in the production of household items. Another significant work in this sense is that of Ana Paulina Lee, ‘Mandarin Brazil: Race, Representation and Memory’ (2018), probably the most complete and up-to-date survey on the issues and sources that permeated relations between China and Brazil since the colonial period. Lee focuses his book on cultural relations and migratory movements, building a broad scenario of China and Brazil relations, especially after the nineteenth century. ‘Mandarin Brazil ’ is a fundamental book to understand the origins of Brazilian prejudices and the erasure of memory about the Chinese presence in the country. It brings extensive literary, as well as documentary research, and stands as a key piece in updated studies on the subject. I would also like to include, in this sense, the book ‘Studies on Chinese Migrations: Brazil, China and Mozambique’, organized by André Bueno and Daniel Veras (2021), which presents several studies on Chinese migrations to Brazil, addressing the most diverse aspects, such as prejudice, economic issues, social insertion, reception in newspapers and media and the Brazilian imaginary about Chinese. It is an up-to-date study that reports the latest documentary findings and points out some new paths for research.

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Conclusions

Finally, it must be said that, despite the racism and prejudice that composed the writing of Brazilian history, minimizing the important contributions of Chinese immigrants, even so, China continued to be a distant mirror for Brazil. Especially after World War II (1939–1945), when mainland China becomes a Communist Republic (1949), many Brazilian intellectuals became interested in how this country had made its revolution and quickly transformed itself into one of the most powerful socialist nations in the world. This would give rise to the ‘China-asModel’ theory (Bueno, 2018, 2021a–c), defended by dozens of intellectuals and travelers who came to the country between the years 1950 and 1990. For them, China could serve as a model of transformation and development for Brazil, due to a series of cultural, economic and political elements that were considered ‘common’ to both countries. Although this theory was never effectively implemented in Brazil, it strongly influenced the Brazilian political and intellectual class to think of new paths for the country’s development. So answering the crucial question that governs this essay: how did China change Brazil? The answer has three dimensions. The first is the cultural factors that influenced the formation of the arts, eating habits, customs and economic structure in Brazil. Since colonial times, and having experienced a strong presence of Chinese in the country, Brazilians have learned to live in houses with Chinese architectural and decorative influence, decorate their churches with Sinic motifs, incorporate Chinese cuisine flavors and foods, cultivate habits and customs, built the country’s economy through Chinese grain and plant monocultures (and to this day Brazil stands out in the production of rice, oranges and soybeans), and developed social patterns of differentiation from the consumption of distinctive products Chinese such as silk, porcelain, furniture and palanquins. Just as the Chinese presence in Brazil is evident, its influences (directly or not) are deeply rooted in Brazilian daily life and imagination. The second dimension is the ‘Chinese Question’. It permeated the nineteenth century and contributed decisively to the discussions on abolition, the exploitation of labor and the improvement of the Brazilian production system. Although the Chinese did not come in large numbers, the fact that they came as free contract workers directly affected the country’s slave-holding structure, which was pressured by the abolitionist and labor movements. In another sense, the debates on immigration and

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colonization deepened, as well as the dissemination of racist, eugenics and discriminatory theories, which profoundly undermined the construction of a more balanced social and cultural structure, which duly contemplated indigenous, African and Asian contributions. The third dimension is that the ‘China-as-model’ served as an intellectual counterpoint to the ideological models and political ideas traditionally established in Brazil, focused on reproducing Eurocentric models of conservative capitalist thought or socialist theories. The initiative to bring Brazil closer to the Chinese model of socialism fostered the creation of a space for new political ideas, such as reforms in labor relations, greater attention to the agricultural peasantry and reinforcement of feminist ideas (Bueno, 2020; Studart, 1978). There is no doubt, therefore, that Brazil would not be as it is today if it was not for the influence of China and the Chinese. Our productive structure would have been reoriented in other, perhaps unpredictable, directions; slavery could have lasted longer had China not emerged as the horizon of free workers who reached the world, in spite of all the suffering and challenges they faced; even in the smallest details of customs and art, the massive presence of Eurocentrism was not able to pay for the deep traces of the Sinic presence in the country, or as José Leite said: ‘It is however worth mentioning that Gilberto Freyre had the right intuition that the brand left by China and other ancient Asian civilizations on Brazil is not a superficial scratch, but a deep scar’.

References Alvarenga, L. J. (1828). Memória sobre a expedição do governo de Macao em 1809, e 1810 em socorro ao império da china contra os insurgentes piratas chinezes, principiada, e concluída em seiz mezes pelo governador, e capitão geral daquella cidade, Lucas José d’Alvarenga, authenticada com documentos justificativos. Typographia Imperial e Nacional. Alvarenga, L. J. (1830). Observaçoens à memória de Lucas Jose d’alvarenga com as suas notas e hum resumo da sua vida. Typographia do Diario. Bandeira, J. (2018). O Brasil na Rota da China. ArtePadilla. Bazin, G. (1983). Arquitetura religiosa barroca no Brasil. Record. Bueno, A. (2018). Caminhos para uma Sinologia Brasileira. In A. Bueno, E. Crema, D. Estacheski, & J. M. Neto (Eds.), Diversos Orientes (pp. 5–12). LAPHIS/UNESPAR.

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Bueno, A. (2020). A China pelo olhar de brasileiros 1880–1990. In A. Bueno, C. E. Campos, & J. M. Neto (Eds.), Estudos sobre História e Cultura do Extremo Oriente (1st ed., pp. 20–29). Sobre Ontens/Projeto Orientalismo. Bueno, A. (2021a). Chinese studies in Brazil: History and current perspectives. In C. Shei & W. Wei (Eds.), The Routledge handbook of Chinese studies (pp. 551–564). Routledge. Bueno, A. (2021b). Sinology in the Brazilian Empire. Academia Letters, 2565: 1–5. https://doi.org/10.20935/AL2565 Bueno, A. (2021c). The ‘New China’ in Brazil: Chinese migratory projects in the 19th century. Academia Letters, Article 2116. https://doi.org/10.20935/ AL2116 Bueno, A., & Veras, D. (2021). Studies on Chinese Migrations: Brazil, China and Mozambique. Projeto Orientalismo—Universidade Estadual do Rio de Janeiro. Coelho, A. A. (1732). Jornada que Antonio de Albuquerque Coelho, Governador e Capitão General da Cidade do Nome de Deos de Macao na China, fez de Goa até chegar à dita cidade no anno de 1718: dividida em duas partes/escrita pelo Capitão João Tavares de Vellez Guerreiro. Occidental na Officina da Musica. Czepula, K. R. (2020). A questão dos trabalhadores “chins”: salvação ou degeneração do Brasil? 1860-1877. Anuario colombiano de história social y de la cultura, 47 (1), 303–325. Dezem, R. (2005). Matizes do Amarelo. Humanitas. Freitas, J. A. G. (1828). Memória sobre Macao. Real Imprensa de Coimbra. Freyre, G. (2003). China tropical: e outros escritos sobre a influência do Oriente na cultura luso-brasileira. Editora Universidade de Brasília. Freyre, G. (2013). Sobrados e Mucambos : Decadência do patriarcado rural e desenvolvimento do urbano. Global. Fu, Y. (傅云龙)(2019) 游历巴西图经(精)/清末民初文献丛刊. Blossom Press. Kang, Y. 康有為(1967) 康南海自訂年譜. In J.-P. Lo (Ed.), K’ang Yu-Wei: A biography and a symposium. The University of Arizona Press. Lee, A. P. (2018). Mandarin Brazil: Race, representation, and memory. Stanford University Press. Leite, J. R. T. (1999). A China no Brasil : influências , marcas , ecos e sobrevivências chinesas na sociedade e na arte brasileiras. Editora da Unicamp. Lesser, J. (2001). A negociação da identidade nacional : minorias e a luta pela etnicidade no Brasil. Editora Unesp. Lisboa, H. C. R. (1888). A China e os Chins. Recordações de viagem do Ex. Secretário da Missão Especial do Brasil a China. Typographia a vapor de A Gobel. Longobardi, A. P. (2011). Fragmentos de visualidades chinesas no Setecentos mineiro 1720–1770 (Master Thesis). UFMG Mendonça, S. (1879). Trabalhadores Asiáticos. Typographia do Novo Mundo.

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Moura, C. F. (1973). Colonos Chineses no Brasil no Reinado de D. João VI. Boletim do Instituto Luís de Camões, n° 2, vol VII. Instituto Luís de Camões, Macau. Moura, C. F. (1995). Relações entre Macau e Brasil no séc. XIX. Revista de Cultura, 22(2), 32–55. Moura, C. F. (2014). Brasileiros nos extremos orientais do império: séculos XVI a XIX . Instituto Internacional de Macau/Real Gabinete Português de Leitura. Moura, C. F. (2012). Chineses e chá no Brasil no início do século XIX . Instituto Internacional de Macau/Real Gabinete Português de Leitura. Peres, V. H. L. (2013). Os ‘Chins’ nas Sociedades Tropicais de Plantação: estudo das propostas de importação de trabalhadores chineses sob contrato e suas experiências de trabalho e vida no Brasil (1814–1878) (Master’s Thesis). UFPE Santos, M. A. (2020). Chineses no vale do Paraíba cafeeiro: projetos, perspectivas, transições e fracassos – século XIX. Almanack, 25, 1–41. Studart, H. (1978). China: o nordeste que deu certo. Nosso tempo. Torelly, L. (2019). O imaginário chinês no barroco brasileiro. Arquitextos 227.02, abril, ano 19. https://vitruvius.com.br/revistas/read/arquitextos/19.227/ 7366. Accessed 21 November 2007.

Chinese Migration and Changes in Brazilian Society Douglas de Toledo Piza

1

Introduction

Migrants of Chinese background have shaped Brazilian society in ways that still need to receive recognition. Well before the much-discussed intensification of mainstream business ties between Brazil and China, migrant networks provided a vital human capital linking those economies and societies. With China’s rise in the late twentieth century and Brazil’s emerging global position at the early twenty-first century, migrant networks established transnational commercial links and spearheaded trade, which became an essential part of today’s Sino-Brazilian economic relationship. Among other major changes, the networks of migrants of Chinese background helped diversify commercial routes and transform popular markets throughout Brazil. Popular markets can be defined as localized social spaces predominantly of lower-class vendors and consumers, where circuits of commodities and people give form to non-hegemonic modes of production, distribution, and consumption (Gago, 2017, 2018; Gordon et al., 2012; Muller & Colloredo-Mansfeld, 2019; Tassi, Hinojosa &

D. de Toledo Piza (B) Lafayette College, Easton, PA, USA e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_3

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Canaviri, 2015). In transnationalizing the popular markets, migrants of Chinese background revolutionized the distribution of imports, increased the Brazilian population’s access to affordable goods, and created incomegenerating opportunities for vendors in all corners of Brazil. As the relationship between China and Brazil evolved over the last few centuries, so did the conditions of possibility that enabled the transit and presence of the Chinese in Brazil, with deep implications for their integration in Brazilian society and the role they played in changing it. Historically, the Chinese migration to Brazil has been at the crossroads of Brazil’s systems of racial oppression and labor exploitation, which continue to shape the experience of migrant communities today. They are confronted with a society that has largely maintained the pillars of its discriminatory foundations even as it became multicultural, what Wejsa and Lesser (2018) describe as the superimposition of multi-ethnicity brought about by migration and discriminatory racial relations that keep nonwhites at the bottom of social hierarchies. Newly arrived working-class migrants are primarily integrated in liminal socioeconomic positions that push them to activities at the fringes of legality. Yet, in this social space, they also find opportunities to build their lives and show solidarity with one another. In this paper, I provide an account of the role of migrants of Chinese background in transforming Brazilian society over six distinct moments of migration spanning more than two centuries. Drawing from two deep ethnographies I conducted over 13 years along the transnational economic circuit between São Paulo and Ciudad del Este (a Paraguayan city bordering Brazil), I argue that overseas Chinese were key in fundamental yet unacknowledged shifts in Brazilian society regarding labor, race, national identity, multiculturalism, class, transnational businesses, informality, and geopolitics. I performed observations in multiple sites like vending stalls and migrant associations and I followed mobile methods (Büscher & Urry, 2009), such as embarking on trips with my interlocutors. Additionally, I conducted over 60 informal, non-recorded interviews and 47 recorded interviews with migrant vendors, community leaders, members of migrant associations, and representatives of diaspora agencies. My interviewing approach combined snowball sampling with semi-structured, sequential interviewing (Small, 2009, p. 25). Two sets of interviews were conducted between May 2009 and March 2012, and July 2015 and August 2018 in Portuguese, Spanish, and Mandarin

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Chinese. I used the assistance of non-paid volunteer translators for interviews in Hakka, Cantonese, and Fukien. Lastly, I conducted document analysis, including policy memos, booklets, manuals, reports, brochures, and memoirs published by the associations. The paper is organized in three sections. First, I will give an overview of the Chinese migration to Brazil and its six moments. Second, I will discuss how migrant networks spearheaded trade relationships between China and Brazil in the 1970s, which transformed popular markets across Brazil. Lastly, I will analyze how the Chinese community participates in multiethnic solidarity in the context of Brazil’s economic, political, and health crises to resist discrimination based on race, class, economic activities, and ideologized discourses about China. I conclude by defending that we gain a more nuanced perspective by centering the overseas Chinese in Brazilian society as well as Brazil and China in the global economy.

2

The Overseas Chinese in Brazil

The overseas Chinese in Brazil are a heterogeneous group with diverse languages, religions, political views, and ethnic and national identities. The term “overseas Chinese,” which is a loose translation of 华侨华 人, includes both ethnic Chinese migrants of various countries of origin and their descendants (Ho, 2016). While the term goes back to the late nineteenth century’s migrants—who were also called “Chinese sojourners” (Douw, 1999)—the English translation “overseas Chinese” has been consistently used in official policy and ordinary language since the creation of a diaspora-specialized agency in the 1926, first by the government of the Republic of China and later also by the People’s Republic of China (To, 2014). It suggests retention and transmission of the Chinese identity despite not being physically present in the territory of the nation and a sense of belonging to a presumed homeland to which they are expected to return. However, with the economic rise of China and the increase in remittances, foreign direct investment, and trade, the term has come to signify that migrants and their descendants can reconnect with the homeland and contribute from afar (Ho & Boyle, 2015; Liu, 2008; Xiang, 2007). Much of the heterogeneity of the overseas Chinese in Brazil owes to different circumstances they faced in six distinct moments of migration (see Table 1). Even before migration officially started, Chinese people had been present in colonial Brazil, largely because of extensive

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Table 1

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Overseas Chinese migration to Brazil

Period

Major Provenances

Major destinations

1810–1812

Canton (today Guangdong) and Macau Canton (today Guangdong) and Macau Zhejiang

Rio de Janeiro

1870–1880 1990–1949

1949–1955 1960–1979

1980s–present

Shanghai, Guangdong, Hong Kong Taiwan, Hong Kong, Singapore, Indonesia, Mozambique, Paraguay Guangdong, Zhejiang, Fujian, Shanghai, Jiangsu, Shandong, Anhui, Jiangxi

Populationa

1812: 1,410 Rio de Janeiro 1881: 2,000 Rio de Janeiro 1931: 820 1949: 1,000 São Paulo 1959: 6,748 São Paulo, Curitiba, Foz 1967: do Iguaçu, Recife 17,490 São Paulo, Foz do Iguaçu, Recife, Goiânia, Brasília, Rio de Janeiro

1984: 70,000 2018: 250,000

a Recorded or estimated population in cumulative numbers

Source Freire da Silva (2014, 2018), Gao (2017), Macagno (2013), Shu (2009), Stenberg (2012), Silva (2008) and Yuan (1998)

human transit across the territories colonized by Portugal spanning from Macau to Brazil and the Portuguese maritime trade between Asia, Africa, South America, and Europe. However, little is known about the lives of Chinese aides, servants, and slaves during most of colonial Brazil because of scarce and poorly documented records—although exoticized representations appeared in newspapers, traveler’s chronicles, literature, and paintings (Lee, 2018, p. 5; Leite, 1999). 2.1

Servants of the Portuguese Empire

The first moment and official marker of the Chinese migration to Brazil is the arrival of Chinese tea cultivators between 1810 and 1812 to work in Rio de Janeiro’s botanical garden (Gao, 2012; Shu, 2009). Numbers of migrants are inconsistent, ranging from 300 to 750 Chinese tea cultivators brought at the request of the King of Portugal. This experiment in growing tea was intended to both realize the King’s desire to get a share of the international tea market (Lee, 2018) and to acclimate the Portuguese royal family (Leite, 1999), who had just resettled in Rio

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de Janeiro after escaping the impending invasion of Napoleonic forces. What happened to those Chinese tea cultivators after the seat of the Portuguese Empire was transferred back to Lisbon remains unknown, but it is believed that most of them and their offspring became peddlers in the outskirts of Rio de Janeiro. Chinese labor was largely unfree throughout colonial Brazil, not unlike the following several decades during which slavery prevailed as a defining institution of Brazil. 2.2

The Chinese Question

The second moment results from the planter class’s desire to deploy Chinese laborers in independent Brazil’s transition out of the slave-based economy. The proposition spurred a heated debate in the parliament and in the press that was known as “the Chinese Question” (Dezem, 2018). Proponents of “the importation of Chinese coolies” used the liberal ideology of the free market to argue for the economic viability of cheap labor that would secure Brazil’s competitive position in the global market of agricultural commodities. Opponents were not a unified front. Some objected to the proposal on humanistic grounds, pointing out the deplorable work conditions that Chinese laborers would face in Brazil and the imminent risks of de facto enslaving the laborers under the disguise of a new labor regime (Czepula, 2020). Others, including prominent abolitionists, feared that Chinese laborers would “mongolize” Brazilian society, just like—they argued—enslaved Blacks Africanized it (Lee, 2018, p. 7). The Chinese Question puts into sharp relief the disjoint between a deeply racist elite and their self-proclaimed embracing of the European Enlightenment ideas of freedom and dignity of human life. The disconnect between market liberalism and the social institution of slavery is central to understanding Brazilian society in the nineteenth century. Analyzing the Brazilian cultural production of that time from a Marxist literary perspective, the professor and literary critic Roberto Schwarz (1992) argues that liberal ideas were “out of place,” as the Brazilian elite’s eager adoption of the free-market ideology contradicted the reality of forced labor and the dehumanizing doctrine of racial superiority. Yet, these ideas resonated with the global circulation of racialized labor discourses that maintained the same contradiction between free-market ideology and unfree labor. In fact, the Chinese Question in Brazil is a manifestation of an emergent global phenomenon derogatorily called

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“coolie” trade—that is, is the predominantly Chinese and Indian labor migration based on deceptive contracts that in many cases resulted in indentured servitude in European colonies, in the Americas, and across the rest of the world following the end of transatlantic African slave trade in the nineteenth century. Or, as Lee, puts it, a “global movement of racialized disposable laborers” (2018, p. 9). In this sense, she argues, the Chinese Question in Brazil mobilized tropes of Chineseness that developed out of slavery’s global racial regimes and shaped the emerging Brazilian national consciousness as an aspect of a globally racialized national consciousness (Lee, 2018). Thus, she goes on, the making of Brazilian society must be understood transnationally in relation to global systems of power and oppression that extend further beyond the transAtlantic racial, economic, and cultural (dis-)continuities, to what she calls a “circum-oceanic memory” connecting Asia, Africa, Europe, and the Americas through ideas of race and labor embedded in representations of Chineseness. The Brazilian government engaged actively in the recruitment of Chinese laborers. In 1870, just two years after the abolition in the United States and one year before the Brazilian parliament passed a gradual emancipation law, the Brazilian government created the Asian Workers Importing Society (Sociedade Importadora de Trabalhadores Asiáticos ) to recruit Chinese laborers through a ten-year labor plan. Facing barriers to the recruitment of Chinese laborers, the Board of the Society submitted to the Emperor of Brazil a memo1 requesting action from the Brazilian government to help them negotiate favorable treaties. An 1879 study by Consul-General of Brazil in the United States on the viability of Chinese laborers based on the American experience propelled the establishment that same year of a Brazilian Mission to China to assess the recruitment of Chinese laborers and negotiate favorable treaties in 1881. However, reports of abuses suffered by Chinese laborers in Cuba and Peru had prompted prominent officials of the Qing Dynasty to adamantly oppose the Brazilian government’s plan to recruit Chinese laborers (Vanden Bussche, 2018). Official entrants throughout the nineteenth century were lower than 3,000 (Leite, 1999).

1 “Demonstration of the Conveniences and Advantages of Asian Workers (from China) to Farming in Brazil” [Demonstração das Conveniências e Vantagens à Lavoura no Brasil pela Introdução dos Trabalhadores Asiáticos (da China)].

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According to Bueno (2021), high-ranking officials of the Qing Dynasty developed a different perspective on the Chinese migration to Brazil. In 1889, while on a diplomatic trip across the Americas, Chinese official Fu Yunlong met with Emperor of Brazil Pedro II in Rio de Janeiro, just a few months after the abolition of slavery, and became an enthusiast of Chinese migration to Brazil. Other active officials of the Qing court were left with a positive impression of the 1881 Brazilian Mission to China, like Xue Fucheng, who did not set foot in Brazil but wrote a memo to the Qing Emperor in 1893 defending the idea of family migration to Brazil. By far, the most radical migration project was conceived by Kang Youwei, an influential confidant of the Emperor Guanxu and mastermind behind important reforms in the late Qing Dynasty. He wrote a detailed memo to the Emperor in 1897 laying out his ambitious vision of founding a “New China” in Brazil. Lamenting the empire’s decline, he viewed mass migration of thousands of Chinese as a “means of guaranteeing the preservation of Chinese civilization and Brazil as the ideal laboratory for this experiment” (Vanden Bussche, 2018). He envisioned an entirely new model of civilization and a “new hybridized nation of Chinese and Brazilians” (Bueno, 2021, p. 4). Kang’s plan was blocked by Li Hongzhang, a powerful minister who had received the Brazilian Mission in 1881. Kang further developed his ideas of a new, hybridized, and harmonious world civilization in his 1900’s Book of Grand Unity. But his ideas were never implemented, neither were those of Liu Shixun, a senior Qing official who recuperated the plans of large-scale migration to Brazil in 1909. 2.3

Migration in the Making of a Nation by Design

The third moment of the overseas Chinese migration to Brazil includes a slight increase in the migration to Rio de Janeiro and the surrounding area in the transition to the twentieth century, mostly due to political instability associated with the decline of the Qing Dynasty and the establishment of the Chinese Republic in 1912. Predominantly from Zhejiang, these migrants were a Cantonese-speaking community (Shu, 2009) of peddlers and small business owners in sectors like restaurant or dyeing (Stenberg, 2012). Although the population size of the overseas Chinese was small, exoticized representations that reproduced racial tropes about the Chinese abounded in literature, music, and popular culture in the first decades of the twentieth century (Fausto, 2009; Lee, 2018).

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These migrants arrived in Brazil in a period marked both by a racist view against the Chinese and deep changes in society caused by migration at large. With abolition in 1888 and the transition to a republican state in 1889, the Brazilian government established new immigration contract labor programs starting in the 1890s. Modeled after the experience of recruiting Chinese laborers some decades earlier, those programs had a profound impact in shifting Brazilian society’s demographic makeup. The programs carried out two long-standing goals of Brazilian elites: exploiting cheap labor and implementing branqueamento—a racial whitening ideology representing “a white supremacist belief that advanced the project of whiteness through racial mixing rather than racial purity” (Lee, 2018, p. 14). Also known as “labor importation” programs, they are an instance of the manipulation of immigration policy to serve the interests of the elite, who used it as a tool to craft the national identity by shaping the population makeup—a process of engineering of immigration that Zolberg (2008) calls “making a nation by design.” The first of these programs facilitated the migration of Italians to work in agriculture predominantly in the state of São Paulo. As Wejsa and Lesser (2018) argue, this racial whitening ideology shaped Brazilian national identity, which was “simultaneously rigid and flexible—with Whiteness consistently prized, though ambiguously defined.” Another such program facilitated Japanese migration to Brazil in the early twentieth century, which necessitated a shift in narrative to represent the Japanese as racially white. The Chinese, who were considered not white, had no place in that society. 2.4

Overseas Chinese in Multicultural Brazil

The rise of the Chinese Communist Party to power in 1949 prompted the fourth moment of the overseas Chinese migration to Brazil, with the arrival of wealthy industrialists from Shanghai, traders from Guangdong, and Catholics to São Paulo. These migrants integrated into Brazilian society predominantly as liberal professionals (Stenberg, 2012). This migration decreased to virtually zero in the mid-1950s with Beijing’s stricter emigration policies. These Chinese migrants found a diverse Brazilian society. From 1870 to 1930, between 2 and 3 million migrants from Europe, Asia, and the Middle East settled in Brazil (Wejsa & Lesser, 2018). Political turmoil and persecution of minorities with the rise of Nazism and fascism in

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Europe and the global effects of World War II generated new migration to Brazil. São Paulo consolidated as a major destination for the Chinese. The Brazilian government requested assistance from the Chinese catholic community of São Paulo to receive the Chinese migrants. Those who arrived in the 1950s had more opportunities to rebuild their lives as they possessed financial resources, higher levels of formal education, and active links with overseas Chinese in the United States and other parts of the world that enabled them to take transnational paths in education, professional career, and family. 2.5

Climbing Up the Social Ladder

The fifth moment, in the 1960s and 1970s, includes mixed origins like Taiwanese and Hong Kongese and overseas Chinese leaving countries undergoing decolonization like Singapore, Indonesia, and Mozambique. Many Taiwanese migrants were small business owners in São Paulo and those who settled as farmers in the countryside later opened stores and restaurants in São Paulo (Tang, 2013). Others re-migrated from Ciudad del Este to Brazilian cities like Foz do Iguaçu, Curitiba, Recife, and São Paulo. Over the course of a few generations, these overseas Chinese invested community and family resources in strategies like mutual credit and higher education to climb up the socioeconomic ladder in Brazilian society. Many took on transnational professional paths in liberal occupations like accountants, consultants, and attorneys, forming a human capital pool that was tapped by multinational businesses between Asia, South America, and North America. A small group of overseas Chinese found a niche in the emergent import distribution business connecting Brazil and Paraguay. São Paulo underwent rapid urban growth and population expansion, in large part because of domestic and international migrant groups, but failed to absorb this growing labor force into modern productive activities, leading to an increase in economic and urban informality. Contrary to the explanation of both the modernization theory predominant in the second half of the twentieth century (Rostow, 1960) and the Brazilian reformists (Cardoso, 1971; Furtado, 1968; for a critique, see Machado da Silva, 2002), Marxist thinkers argue that informality must not be understood as an incomplete transition to capitalist economy. Oliveira (1972, 2003) contends that formal and informal economic activities coexist in the type of urban accumulation proper of the expansion of the capitalist system

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in Brazil. Those activities are not simply a survivalist economy of destitute outside of capitalism but are rather a manifestation of capitalism as we know it in most of the world (Mezzadra, 2011; Sanyal, 2007). In downtown São Paulo’s growing informality, overseas Chinese developed retail and wholesale businesses in the late 1970s. They have since supported the distribution of Asian imports via Paraguay to Brazil—from toys and cheap jewelry to watches and electronics—paving the way for larger transformations in the popular markets. 2.6

Popular Markets

The sixth and most recent moment in the Chinese migration to Brazil includes working-class migrants. The Chinese population in Brazil swelled from an estimate of 100,000 in the 1990s to approximately 250,000 in the 2000s. Initially concentrated in São Paulo, they moved to places as diverse as Rio de Janeiro, Brasília, Goiânia, and Caruaru. Most have experienced precarious immigration status (Piza, 2021). Typical sectors in which they work include restaurants, grocery stores, barbershops, and beauty salons, but the majority are stallholders and street vendors in popular markets across Brazil (discussed in the next section). ∗ ∗ ∗ All in all, across this wide range of overseas Chinese in Brazil, “Chineseness” is a category in flux that indexes different forms of subjectivities, ethnic belonging, and attachment to a symbolic homeland that may include one or more places like China, Taiwan, Hong Kong, Macau, Singapore, Indonesia, and Mozambique. As an identity, it is adapted situationally and negotiated over time and across generations. In São Paulo’s popular markets, where Chinese migrants are the majority, Taiwanese migrants underwent a process of “Chinese-fication” (Freire da Silva, 2014). However, this process is not straightforward as the relation is not merely one of majority-minority, but also one of hierarchy in work relations and socioeconomic status, with the Chinese migrants predominantly occupying subordinate positions. Further, China’s rise has reconfigured this strategic self-identification. As new trade and business opportunities opened, Taiwanese migrants flexibly reclaimed their “Chineseness” (Pinheiro-Machado, 2018b), reversing a long-term tendency of Chinese migrants going through a process of “Taiwanese-fication” by which they

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adopted practices of the majority group in cities like Foz do Iguaçu and Ciudad del Este (Pinheiro-Machado, 2010).

3

Transforming Commodity Circuits in Brazil

Since China’s opening up in the 1980s, the overseas Chinese in Brazil have facilitated the growing economic ties between Brazil and China. They have taken trans-Pacific career paths and acted as bridge builders, helping increase trade, investment, and business across sectors (Stenberg, 2012). Given their trajectories, the overseas Chinese are uniquely positioned because they share what Ribeiro calls the “condition of transnationality” (1997) that allows them to navigate multiple languages and cultural and legal systems. Overseas Chinese migrants transformed the distribution of affordable imports that were not easily available in the Brazilian market. During Brazil’s protectionist model of economic development based on import substitution industrialization, the overseas Chinese distributors spearheaded a dynamic transnational circuit of goods imported in Ciudad del Este and re-exported to Brazil through both official and unofficial means (Pinheiro-Machado, 2018a). Hong Kongese and Singaporean importers based in São Paulo opened businesses in Ciudad del Este in the 1980s— not long after free trade zones were established in this newly created city destined to become Paraguay’s newest trade gate. Taiwanese importers and shopkeepers, who are the largest community in Ciudad del Este, have also crossed over ethnic and national boundaries to bridge gaps between China’s rising manufacturing sectors and the Brazilian consumer market (Pinheiro-Machado, 2018b). When Chinese special economic zones became the world’s factory in the 1990s, the overseas Chinese in São Paulo traded directly from China. This tendency grew as Paraguay’s price competitiveness in imports decreased due to Brazil’s trade liberalization and MERCOSUR’s Common External Tariffs, which represented a blow to official re-exportation of imports from outside the economic bloc. Overseas Chinese also entered the retail real estate business, which captures a high share of the wealth circulating in the popular markets through rentals and management fees, both official and unofficial. They bought low-end indoor markets and developed new prime shopping malls across Brazil’s popular markets, becoming the managers of large vending spaces while also supplying imports to many vendors (Piza,

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2012). Those indoor spaces were the primary alternative for street vending and absorbed a significant population of vendors. This is especially true after the crusade against counterfeited imports, which followed the international agenda combating intellectual property rights violations (Pinheiro-Machado, 2017). By pioneering changes in trade and reconfiguring the retail real estate market in the 1990s, overseas Chinese set the conditions for new Chinese migration to Brazil who are predominantly stallholders and street vendors selling goods made in China. The overseas Chinese migrants’ strong foothold in popular markets is in part a product of Chinese diaspora policies implemented by local migrant associations in Brazil. Under the umbrella of the Chinese Association of Brazil (Associação Chinesa do Brasil ) alone, there are over 60 associations ranging in focus area from culture, native-place, and trade, and supporting migrant businesses and assisting with legal counseling or accounting. The associations broker for the Chinese diaspora agencies like Beijing’s Overseas Chinese Affairs Office and its local offices across Chinese provinces, supporting the implementation of export-promotion policies targeting the communities in Brazil. The associations boost business ties not only with the migrants’ county of origin but also with export-led manufacturing hubs throughout Southern China. Further, they have bolstered migration to new destinations across Brazil by supporting migrants relocating to Brazilian cities where popular markets are mushrooming. In the 2000s, with the increase in purchasing power of the lower and middle classes, those cities represented expanding consumer markets. Chinese vendors moved to those areas and supplied locally a demand that had earlier necessitated resellers to travel long distances to São Paulo and Ciudad del Este to procure imports.

4 Economic Crisis, the Pandemic, and Discrimination The overseas Chinese in Brazil face long-standing prejudices that have affected the broader Asian-Brazilian communities. One such prejudice is the fetishization of Asian women. Another one is the notion of “yellow peril,” which suggests that Asians are unassimilable and a threat to the country’s values and culture. There is also the model minority myth, a stereotype that posits that people of Asian descent are smart, wealthy, and successful immigrants (Yamashita, 2021), which creates strict social

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norms, homogenizes a rather diverse group, and obscures inequalities within the Asian community in Brazil. Additionally, stereotypes about Chinese businesses, which are associated with selling shoddy counterfeit products, lead to racist and classist perceptions toward the overseas Chinese, especially migrants of the most recent migration. In being associated with illegal or unlicensed economic activities, the overseas Chinese are labeled as poor, dirty, and uneducated—common tropes that have also informed prejudices against workers in Brazil’s popular markets more broadly. A turning point for the overseas Chinese vendors was Brazil’s economic crisis—which has been dragging since the mid-2010s and was exacerbated by the parliamentary coup against President Dilma Rousseff in 2016. Although the overseas Chinese vendors have experienced discrimination in the popular markets, competitors and consumers eventually showed a more positive attitude toward them. Brazilian vendors gradually benefitted from the overseas Chinese migrants’ increased distribution of top-sales imports and some established business connections to import directly from China (Freire da Silva, 2018), which led to a shift toward a more favorable image of the Chinese people. Shoppers, too, had more access to affordable goods through the overseas Chinese vendors and gained a more welcoming perspective about them. However, the ongoing economic crisis, which combines recession and unemployment, has limited the purchasing power of the lower and middle classes and pushed a significant portion of the population to precarious positions in the popular markets, intensifying the competition with Chinese vendors and plummeting profit margins and sales in a market that is now saturated. The economic impacts of the coronavirus pandemic and President Jair Bolsonaro government’s incredibly inept mismanagement of the public health crisis have worsened the recession, slowing down the consumer markets and aggravating the unemployment crisis in Brazil. This posed challenges to overseas Chinese migrants and increased the disincentives for them to stay in Brazil, but many who want to return to China lack the financial means. Discrimination against Asian-looking people increased dramatically with the rise of anti-China sentiment in Brazil. High-ranking officials from the Bolsonaro government and the president himself launched racist and xenophobic attacks against China and the Chinese people in their disinformation campaign. This normalized violence against the overseas Chinese and fueled assaults against members of the Asian community,

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who reported an increase in frequency and severity of attacks. The Bolsonaro government’s rhetoric of condemnation of China seeks to establish a backward ideological position in foreign affairs that undermines the cultural, economic, and geopolitical ties strengthened in the last two decades—in the opposite direction of Brazil’s affirmative foreign policy of the Workers’ Party era, which centered on multilateralism, leadership, and strategic south-south relations. Yet, solidarity across the Asian community in Brazil enabled the emergence of a Pan-Asian-Brazilian identity. This identity includes diverse groups of migrants and Brazilians of Asian descent from distinct backgrounds and draws strength in the resistance to various experiences of othering the community faces routinely. This emerging identity is being framed from a progressive lens as the people who are crafting it also occupy the intersectionality between Asian activism and movements like feminism and LGBTQ+ activism (Yamashita, 2021).

5

In Lieu of Conclusion: From the Margins to the Center

Over a decade ago, when I began doing fieldwork on the economic activities of Chinese shopkeepers and street vendors, I saw a copy of Yu Lik Wai’s 2008 film Plastic City for sale on a makeshift vending table. Ironically, it was being sold in the same district in São Paulo where the plot of the film takes place. Plastic City centers on the increased flows of migrants, commodities, and capital against the backdrop of growing SinoBrazilian relations. The film tells the story of the rise and fall of a Chinese migrant’s counterfeited merchandise empire in South America and his son’s attempt to resolve the troubles they face after being betrayed by partners in an international smuggling scheme (Piza, 2012, p. 59). Although the film reproduces the stereotypical trope of Chinese knockoff mafias, it does problematize the global economy’s structural conditions that push the overseas Chinese to occupy such positions in Brazil’s popular markets. By centering the narrative on marginalized characters and presenting them as complex, agentic protagonists who work around the social, economic, and legal boundaries of transnational economic networks, the film can be seen as a social commentary on the overseas Chinese’s ability to subvert a system that places them in an underclass position because of their ethnic minority status, migration trajectory, and illegal economic activity. Their liminal situation is the mirror image of

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Brazil’s and China’s semi-peripheral position in the global economy. In this sense, Plastic City can be seen as a counternarrative to global politics from the standpoint of emerging economies (Laukkanen, 2019). My encounter with the film that precisely describes the situation in which I found it was, after all, not only a meta-language through which to speak about the overseas Chinese vendors in São Paulo’s popular economy. It also was a metaphor from which to explore how overseas Chinese are bridging the social and economic relations between China and Brazil as these emergent economies try to overcome barriers in a global economic system that was not designed for their success. We can only hope that the overseas Chinese will once again show resilience, that their contributions to Brazilian society will bring about prosperity and inclusion, and that the Sino-Brazilian relationship will be back on a track of growth in strategic directions. Acknowledgements I would like to thank Rosana Pinheiro-Machado, Mariana Hase Ueta, and Mathias Alencastro for the invitation to write this chapter and their editorial comments, which helped strengthen my arguments. I would also like to thank Benjamin Dupont for revising the manuscript. This paper is based on research projects funded by the São Paulo Research Foundation—FAPESP, Coordination for the Improvement of Higher Education Personnel—CAPES, The New School, the Zolberg Institute on Migration and Mobility, the India China Institute, the Heilbroner Center for Capitalism Studies, and the Graduate Institute for Design, Ethnography, and Social Thought.

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From ‘Threat’ to ‘Partners’? The Changing Landscape of Innovation and Intellectual Property Between China and Brazil Vitor Henrique Pinto Ido

1

Introduction

This chapter discusses how China’s recent leading role in various scientific and technological fields has global implications, and particularly in terms of the governance of intellectual property (IP)1 and technology contracts. Brazil is neither the main recipient of Chinese investments and technology nor the core of its geopolitical tensions. Yet, China’s contemporary role in the global economy has multiple direct and indirect consequences to Brazil which need to be better understood; accordingly, a pragmatic 1 Intellectual property generally refers to temporary legal exclusivities (i.e., monopolies based on a set of different rights to exclude others) granted by a certain State (sometimes, by a regional institution for multiple States at once). Among the most prominent intellectual property rights are patents, trademarks, and copyrights. However, the field is broader and entails other rights and related areas, such as geographical indications, trade secret protection, and unfair competition.

V. H. P. Ido (B) University of São Paulo, São Paulo, Brazil e-mail: [email protected] Health, Intellectual Property and Biodiversity Programme, South Centre, Geneva, Switzerland © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_4

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approach can enable the accrual of benefits and provide reflections on how Brazilian innovation and IP policies could be shaped in the future. The People’s Republic of China (PRC) developed in around 40 years a full-fledged IP system, from virtually non-existent to a contemporary ‘over-protective’ model that goes much beyond the minimal standards required by international economic law, particularly those enshrined in the World Trade Organization (WTO)’s TRIPS Agreement (Yu, 2019b). In other words, most IP norms and policies in China are extremely protective for rightsholders: specialized IP courts which reportedly benefit foreign applicants, automatic destruction of goods in case of trademark infringement, and multiple additional exclusivities for pharmaceuticals (such as 12 years of additional protection for products of biological origin). Chinese authorities conduct educational policies in primary schools and the enforcement of copyrights online is stringent and automatized with the help of artificial intelligence (AI). While not fully representative of the reality everywhere in the country, this is a large departure from old accounts of China as a counterfeit paradise and reflects the industrial policy and institutional changes in the country. This chapter briefly discusses such shift, which can be best defined as a (quite well-crafted and explicit) shift from the ‘Made in China’ model to a new technological domination model represented, among others, by the Made in China 2025 policy. It subsequently discusses how this new landscape of innovation, industrial property, and IP in China presents specific legal consequences: (i) China as a potential new ‘normmaker’ in international law, particularly at the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO) and in trade and investment agreements, (ii) Chinese regulators and courts as de facto extraterritorial and transnational regulators, especially in hightechnology areas such as 5G, and (iii) Chinese firms as global private regulators by enforcing their contracts across global value chains and their privacy standards, seen in e-commerce retailers and big tech platforms more prominently. As the chapter argues, this has large implications for Brazil, which requires much more attention to China’s new stance in both the legal and technological fields. Brazilian companies and researchers need to engage with Chinese partners and change/adopt new contractual, licensing, and business practices; simultaneously, the Brazilian IP and innovation system needs to face the reality of Chinese investments and applicants of patents and trademarks. It also reinforces the need for better regulation

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of multiple technological fields, including AI and data governance, and of more comprehensive industrial policies at the domestic level. On the other hand, given that China’s IP requirements in trade agreements are less stringent than those of the United States, the European Union (EU), and Japan, it also enables the Brazilian government to pursue new forms of trade and investment agreements and use this leverage in negotiations with the remaining players. In other words, it may potentially lead to more beneficial outcomes. The main conclusion is that the Brazilian government needs a pragmatic, and not confrontational, approach to positively benefit from partnerships with China, both across multilateral institutions, at the BRICS-related fora and bilateral levels. Additionally, increased attention to the Chinese legal system and to its innovation landscape are necessary for all other stakeholders in order to harness the potential benefits of partnerships, be sufficiently transparent, and become aware of its potential consequences. Finally, Brazil should avoid maximalist IP policies, focusing instead on technology transfer and investments in research and development (R&D).

2 From the Made in China to the Made in China 2025 (and Beyond) Chinese products were once synonymous with cheap, bad-quality, and counterfeit or pirated goods (i.e., infringing copyrights or trademarks, forms of IP, respectively). But the views of what products are manufactured in China and what services are provided by Chinese entities are rapidly changing. Smartphones, automobiles, trains, and other ‘hightech’ products are now ubiquitous around the world and compete with US, German, and Japanese technologies. This shift is the outcome of 40 years of unprecedented economic growth, the success of multiple technology transfer policies, and numerous industrial policy plans undertaken by China—all accompanied by institutional and legal reforms (although not necessarily enabled by them, and not always successful). This can be symbolically described as a paradigm shift from the ‘Made in China’ to the ‘Made in China 2025’ model. In other words, from the copy and low-quality manufacturing system—which is, therefore, part of a regime of foreign IP infringement—to a high-quality, ‘innovative’ system which is accordingly strongly protective of IP.

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The ‘Made in China’ model refers to the description of the economic model of the PRC since the reform and opening up period: an extremely rapid industrialization based on manufactured goods, low added industrial technology, cheap and relatively precarious labor conditions, strong role of coordination by the Chinese public sector (at the central and local levels), ample to almost entire participation of SOEs in the economy, and a general low enforcement of foreign IPRs, particularly trademarks, copyrights, and patents, associated with policies to promote technology transfer to domestic firms via contracts and administrative provisions, as well as favorable conditions for market entry. The model was at the core of China’s enormous economic growth and enabled the globalization of its goods worldwide. The ‘Made in China 2025’ is the name of a wide-encompassing policy by the Chinese government launched in 2015 that aims at achieving technological dominance and/or technological upscaling in key economic sectors such as biotechnology, civil aviation, and robotics by 2025 (People’s Republic of China—State Council, 2015; Wübbeke et al., 2016; Kennedy, 2015). The plan is based on creating the conditions for the country to be a leading innovator of cross-cutting and frontier technologies, with both self-sufficiency and prominence abroad.2 As such, 2 For a comprehensive analysis, with a focus on smart manufacturing, see: ‘China’s industrial masterplan “Made in China 2025” aims to turn the country into a “manufacturing superpower” over the coming decades. This industrial policy will challenge the economic primacy of the current leading economies and international corporations. The strategy targets virtually all high-tech industries that strongly contribute to economic growth in advanced economies: automotive, aviation, machinery, robotics, high-tech maritime and railway equipment, energy-saving vehicles, medical devices, and information technology to name only a few. […] The strategy stresses terms like “indigenous innovations” and “self-sufficiency”. It intends to increase the domestic market share of Chinese suppliers for “basic core components and important basic materials” to 70 per cent by the year 2025. […] Made in China 2025 also has an outward-looking dimension: the accelerating acquisition of international high-tech companies by Chinese investors. To speed up China’s technological catch-up and to leapfrog stages of technological development, Chinese companies are acquiring core technologies through investment abroad’ (Wübbeke et al, 2016). See also: ‘“Made in China 2025” has clear principles, goals, tools, and sector focus. Its guiding principles are to have manufacturing be innovationdriven, emphasize quality over quantity, achieve green development, optimize the structure of Chinese industry, and nurture human talent. The goal is to comprehensively upgrade Chinese industry, making it more efficient and integrated so that it can occupy the highest parts of global production chains. The plan identifies the goal of raising domestic content of core components and materials to 40% by 2020 and 70% by 2025. Although there is a significant role for the state in providing an overall framework, utilizing financial and

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an economic model represented by this plan (but based on a myriad of various policies set forth by its Five-Year Plans and other major policy tools3 ) entails, among other aspects, a transition toward a capital-based or technology-based economy, a robust participation of the digital economy including e-commerce, AI, and social media platforms, the presence of high-skilled workers, high levels of automation, larger participation of the private sector (although with continued presence of the State as coordinator—also via investments, competition enforcement, and policy regulation), and a very robust protection of IP (both for domestic stakeholders and for foreign rightsholders alike). Despite their major differences, the shift from Made in China to Made in China 2025 consolidates and retains a similar goal which shares, from the ideational point of view, the view of what is being sought as ideal: achieving Chinese endogenous ‘innovation’ and technological dominance. Importantly, this is not illegal under international law and has been the basis for some of the most-successful economic development experiences elsewhere, including Japan, South Korea, and the US (Chang, 2002).4 Economic growth and prosperity were at the core of

fiscal tools, and supporting the creation of manufacturing innovation centers (15 by 2020 and 40 by 2025), the plan also calls for relying on market institutions, strengthening intellectual property rights protection for small and medium-sized enterprises (SMEs) and the more effective use of intellectual property (IP) in business strategy, and allowing firms to self-declare their own technology standards and help them better participate in international standards setting. Although the goal is to upgrade industry writ large, the plan highlights 10 priority sectors: 1) New advanced information technology; 2) Automated machine tools & robotics; 3) Aerospace and aeronautical equipment; 4) Maritime equipment and high-tech shipping; 5) Modern rail transport equipment; 6) New-energy vehicles and equipment; 7) Power equipment; 8) Agricultural equipment; 9) New materials; and 10) Biopharma and advanced medical products’ (Kennedy, 2015). 3 The most recent 14th Five-Year Plan for the period 2021–2025, approved in 2021,

is a good example: it continues very prominently the set of policies to foster self-reliance, promote the dual circulation strategy, invest in basic science, and focus on sectors, such as AI and quantum computing. 4 In this regard, it should be stressed that technology policy was combined with numerous other policies, including education promotion, land reform, and distribution. As such, instead of an abstract project of developing ‘education’ or ‘technology,’ these development processes were strongly materialized by reorganizing structural elements of the economy, the relation between capital and labor, and the issue of ownership. The literature on the specific case of China is extremely vast and divergent on the details of these particular processes, but it agrees on the fact that the role of the State is very obviously at the center of the developmental plans of the PRC.

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Deng Xiaoping’s pragmatic opening policies, and liberalization of the economy to foreign investment and exportation of goods manufactured in China was crucial to that aim. However, at the same time, ‘shock therapy’ liberalization and the Washington Consensus playbook, including rapid privatization and macroeconomic austerity measures, were never implemented in China (Weber, 2021): there was early on a robust understanding of the need for domestic innovation and not merely a Ricardian development strategy based on reproducing comparative advantages. In the IP realm, this meant that low enforcement of foreign IP was instrumental as to not impede domestic firms from operating at that point. Instead of pure market liberalization and strong IP rights, there was the creation of a ‘government-steered market economy,’ and an innovationdriven development strategy since 2015 (Naughton, 2021), or a highly competitive but government-structured model, a ‘China Inc’ (Wu, 2016). For a similar reason, the general promises of IP as a promoter of technology transfer to developing countries, which were at the core of the WTO TRIPS Agreement in 1994, were not integrated in Chinese development plans. In China, IP protection was only granted after technology transfer from industrialized countries had largely already taken place through other means. Also, many norms were implemented in China as a direct pressure by bilateral negotiations with the United States and conditions to the Chinese accession to the WTO in 2001—‘imposed’ and not chosen. Therefore, it was not IP, but the overarching set of policies that ensured the mandatory creation of joint ventures with domestic firms, ensuring deep tech transfer to China, which was the key element to development plans.5 In current times, many such policies, which once conditioned the operation of foreign firms in the Chinese territory, no longer exist. Importantly, the change in policies now reflects the fact that most domestic companies can innovate sufficiently (which is already true in many sectors), and therefore benefit from stronger IP protection themselves.

5 Strong IP was never part of China’s industrial and development plans: instead, it was the opposite, and like what high-income countries once did. Switzerland only started granting pharmaceutical patents on products in 1972; the United States did not grant protection for foreign copyrights until the late nineteenth century; and Japan’s postWorld War II policies were largely based on early copies of foreign technologies. But once a certain level of economic and technological power is reached, countries often change their standards, and so has China.

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What remains widespread, though, is the notion that IP should be consistent with industrial and innovation policies, and never a standalone subject (policy cohesion).6 For this reason, despite all the changes in Chinese IP policies in recent times, leading to an ever-stronger protection of IP, the general understanding that domestic innovation and technological upscaling need to be promoted did not significantly change. In other words, the strengthening of IP is explained under the logic of promotion of domestic innovation (having reach a point where the protection is justified and sought after by innovators), and not as a promise through which IP would bring innovation. Indeed, the impacts of IP protection to national companies, universities, and institutions to innovate are felt quite differently in contemporary China from what they would have some decades before. In many cases, Chinese companies and institutions are also in equal footing to innovate in partnership with foreign entities, and not as subsidiary. In 2021, for example, BioNTech, the German firm who developed the first approved COVID-19 vaccine and who globally partnered with Pfizer, signed a deal for the creation of a joint venture with Shanghai-based Fosun Pharmaceuticals in the field of mRNA vaccines and technologies. Many such operations now contain stronger IP licensing agreements, but the implicit need for technology upscaling remains. In other areas, the status of Chinese innovation is reportedly limited in comparison with foreign players, which have led to policies to ensure more self-reliance and domestic innovation, such as in the strategically crucial sector of semiconductors, an area which China continues to lag behind (Lee & Kleinhans, 2021). But in other fields, Chinese innovation is already at the forefront

6 Albeit seemingly obvious, this statement is relevant in the context of IP expansion in developing countries, which also took place amidst broader processes of strict liberalization: in these cases, the rapid adoption of TRIPS-compliant IP laws and policies was for the most part conducted without the use of TRIPS flexibilities and without integration of IP with industrial, innovation, taxation, and other policies. In a sense, the expectation—supported by most academic accounts of IP and its role in innovation—was and continues to be that IP alone would be sufficient to conduce to technology transfer and technological development. In this context, highlighting that trend towards expansion of IP protection and enforcement did not completely prevent China from conducting specific innovation policies, and that such process took place without a ‘shock therapy’ logic, is an important comparative lesson for the history of IP.

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of global innovation, artificial intelligence (AI) being perhaps the most referred to example.7 This is the context against which the reconceptualization conducted by the ‘Made in China 2025’ model should be assessed: the new model alters the main aspects of China’s self-perception and of the foreign gaze, shifting it toward ideas of ‘high-tech’ and a topos of technological and political dominance.8 This is where the role of IP gains a different meaning, since enhancing the protection of IP is also a way to convert the assumption of ‘Chinese fake goods’ into something else: ‘made in China’ products that respect IP, are of good quality, and have added technology. This establishes a distinct set of ideas which are to be associated to Chinese economic outputs and products. As such, IP-protected products may also redesign the circulating ideas on the notion of China as a whole; enhancing protection of foreign IP in China is a way to assert that the country is committed to free trade and is a predictable, ‘rule of law’ jurisdiction, despite all the potential caveats. Very importantly, IP is not necessarily the central piece of this process,9 however, it is instrumental in the reshaping of China’s innovation system. It also changes the conditions of valuation of products produced in China, which is part of

7 AI is a key component of China’s innovation policies, such as the New Generation Artificial Intelligence Development Plan (新一代人工智能发展规划) of 2017. Given the dependency of AI development on robust sets of data, China’s wide-encompassing uses of big data and investments in AI development are intertwined. AI should also not be generalized since it entails multiple uses and various very distinct notions. China is often considered to have a key advantage in the size and comprehensiveness of its datasets (e.g., data on an individual is vast and contains multiple economic potentials) but limited in terms of variety of data, for instance. The impacts of AI to the IP system in China should thus not be scrutinized exclusively in terms of the direct implications for the IP system such as patentability criteria for an AI-assisted patent application (although this should also be analyzed), but rather in this broader scope of policies and innovation pursuits. 8 The logic of criminalization and how such perceptions are applied to individuals via the consolidation of the IP discourse was already extensively detailed and ethnographically highlighted by Pinheiro-Machado. The present analysis departs from such considerations to add a meta-dimension applicable to the very dimension of law in contemporary China, as a co-constructive element of society. See Pinheiro-Machado (2018). 9 China’s development plans are not and have never been focused solely on IP policies, neither were them exactly at the core of its strategies, at least not disentangled from other issues such as innovation and R&D financing, macroeconomic policies, financial mechanisms via Chinese banks, labor conditions, etc. For a famous interpretations on China’s economic development since the late 1970s, see Naughton (2005).

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both nation branding and business branding strategies (Aronczyk, 2013; Kaneva, 2011).10 Based on ethnographic accounts of the effect of the economic changes in the country, Rosana Pinheiro-Machado argues that there is a coexistence of these two models in contemporary China. This is crucial to understanding the politics of piracy and counterfeiting in the country, particularly the criminalization of small merchants and operators of such value chains (Pinheiro-Machado, 2018, p. 148). Those who copied became illegal subjects to be persecuted; meanwhile, counterfeits continue to be produced and circulate globally, but are increasingly less visible across city markets and social media in China due to their undesirability to public policies. The diagnostic of a coexistence, rather than a substitution, is also crucial to understand how the protection of IP is formally seen as a necessity by the Chinese government in terms of its current innovation policies. Such plans explicitly focus on the promotion of cross-cutting technology sectors, but largely disregard the fact that the large-scale manufacturers around the country (particularly in less urban and industrialized provinces) continue to be pivotal to the Chinese economy and millions of individuals. These new policies implicitly devalue all the actors and practices under the ‘Made in China’ model, largely understood as something that needs to be ‘overcome.’ Yet, the presence of these two systems at the same time—which could otherwise be identified as an unsurmountable paradox—clearly fits China’s development plans and is a step away from the ‘flying geese’ model (Akamatsu, 1962) for Asian development (Milanovic, 2019). As a conclusion, the major transformation in innovation experiences by China is intertwined with the massive recent changes in its IP policies—not as a consequence, but as a co-constructed process: China has steadily increased the protection and enforcement of IP (even if this varies according to economic sector and region in the country), reflecting its industrialization and its pursuit as a global innovator, as well as geopolitical tensions and pressures from other countries, especially the United States. In addition, technological innovation in China did not occur because of strong IP policies but precisely the opposite: the development 10 In this regard, perhaps the best example of this form of juncture between implicit notions of good quality and a nation is found in Switzerland, which contains a specific law for the protection of national signs with deep connection with the ‘made in Switzerland’ brand.

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was based on lax standards of IP protection, strong technology transfer policies and robust research and development. Very importantly, this is similar to other successful developmental experiences, including the US, European countries, Japan, and South Korea.

3 Global Socio-Legal Consequences of China’s New Role The section above provided a nuanced account of the role of IP in the ‘rise of China’ as a global economic powerhouse and as a lead innovator in core areas. Despite the sectoral changes, it overall leads to important consequences to international economic law and domestic legal regimes, but also to what some authors have named ‘transnational’ law (Zumbansen, 2008).11 Understanding how China may or may not be transforming countries like Brazil, at least from the legal perspective, requires this broader context whereby not only conventional international institutions (such as UN bodies) are to be analyzed, but also how Chinese entities operate abroad via contracts, memoranda of understandings, and their own internal policies. For this reason, it may be possible to summarize (in a non-exhaustive manner) the following three points. 3.1

China Can Be a Potential New ‘Norm-Maker’ in International Economic Law, Particularly Given Its Prominent Participation at the World Trade Organization (WTO), the World Intellectual Property Organization (WIPO), and Its Bilateral and Regional Trade and Investment Agreements

In legal scholarship, a major concern for global south countries refers to the detrimental consequences of adopting foreign legislation and practices as ‘transplants,’ especially when they stemmed out of colonial contexts or structural adjustment policies. This issue has been particularly paramount in the field of IP, since its expansion worldwide is strongly related to geopolitical pressures exerted by the US and Europe, and the interests of pharmaceutical and technologies companies. For this reason, the question would be whether China, which now has such stringent standards of IP 11 Oftentimes, this takes the form of private ordering regulations that bear extraterritorial implications, and where one judicial court or corporate decision may shape law and regulation in other jurisdictions.

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protection for the most part, would thus adopt a similar approach in its interactions with other countries, such as Brazil. The People’s Republic of China acceded to WIPO in 1980 and after a lengthy process joined the WTO in 2001. China actively participates in trade multilateral arenas and expanded its regional scope via regional trade agreements (such as the RCEP) and via its Belt and Road Initiative (BRI). For the most part, it adopts ‘middle-ground’ positions that neither side with developed countries nor developing countries—but always as a strong defender of the multilateral institutions and the benefits of international trade. Generally, this means that China’s position in IP generally promotes the enhancement of trade liberalization, rather than pushing for flexibility for developing countries. However, China does not actively pursue the exportation of its own standards in none of these fields, at least not directly. Nonetheless, it has supported pushes for procedural harmonization such as in the WIPO PCT System, an international system to facilitate patent filings. The PRC also needs to adopt—at least partly—many standards due to the norms contained in its national law and the continued coordination between its IP office, the CNIPA, and the other IP5 offices (USPTO, EPO, JPO, and KIPO), making it reasonable to support the expansion of rules which it already integrated nationally. China also increased the number and scope of regional and bilateral agreements and cooperation mechanisms, including RCEP and the BRI, but the consequences to IP are neither conclusive nor always direct. Unlike the practices by the United States and the EU to push for TRIPS-Plus measures in FTAs and enforce unilateral measures against third countries based on their own understanding of IP, the PCR opts to focus on harmonization of procedures, ‘exporting’ institutional arrangements such as patent application procedures via work-sharing.12 Peter K. Yu notes, however, that there seems to be no signs of direct adoption of Chinese standards along the Belt and Road Initiative from the point of view of IP (Yu, 2019a). This may be related to the characteristics of investment, which mainly deal with infrastructure and less so in areas were IP is not a central issue (different from pharmaceuticals, advanced manufacturing, or the entertainment industry). But it may also 12 It should be mentioned, however, that work-sharing and allegedly ‘bureaucratic’ policies are in fact not neutral and can have multiple consequences, including de facto harmonization. See Drahos (2008) and Syam (2021).

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reflect a different strategy by China in comparison with the US, the EU, and Japan. These have exerted their influence by requiring developing countries to adopt new TRIPS-Plus (i.e., above the minimally required standards of protection of the TRIPS Agreement) as part of free trade and investment agreement negotiations. In this sense, there is an opportunity for countries such as Brazil, which have strongly opposed such norms in trade agreements, to conclude trade and investment agreements ‘differently.’ Despite this background, it is unquestionable that China’s importance leads to both more interest in shaping international IP norms and to define standards in emerging areas which remain mostly unregulated, such as data governance, AI, and e-commerce. 3.2

Chinese Domestic Regulators and Courts May Often Act as de facto Extraterritorial and Transnational Regulators, Especially in High-Technology Areas Such as 5G

To the extent which Chinese investments increase abroad, so does the influence of Chinese regulatory standards increase. For example, the concretization of Belt and Road Initiative-related projects needs to be implemented via high-level official cooperation mechanisms and statements, memoranda of understanding, but also contracts that formalize relations. The regulations contained in such areas are therefore pivotal to the partnering countries (Sanchez-Badin & Morosini, 2021).13

13 With respect to Chinese investments in the global south, while some argue for the risks of unbalanced contracts (particularly the major infrastructure projects along the Belt and Road Initiative and the so-called debt trap), others have noted that most of the contracts are not remarkably different from other investment agreements, and in fact less constraining than those signed with the IMF, the World Bank, and development banks, direct loans, and other forms of ‘assistance’ from the United States, EU, and Japan. For instance, Michelle Ratton Sánchez-Badin and Fabio Morosini have analyzed Chinese investment agreements with Brazil on the electric sector by SOE State Grid’s acquisition of the Companhia Paulista de Força e Luz, concluding that it to middleincome economies such as Brazil, they have been much less disruptive. According to the authors, the reasons for such investments to be relatively less disruptive include: ‘(i) the similar legal tools employed to manage the international economic legal order, (ii) an economic and legal environment previously exposed to foreign direct investments in strategic sectors; and (iii) the inexistence of reported direct interference, also known as “shadow administration,” of the Chinese Communist Party in the daily operations of the corporation’ (Sanchez-Badin & Morosini, 2021).

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In competition law, typically a territorially based law and policy, transnational implications have largely increased. In China, Angela Zhang notes the complex interplay between Chinese anti-monopoly law and its foreign counterparts, mainly the European Commission and the United States: while Chinese companies are regulated by European competition authorities, so are European companies regulated by the Chinese institutions (Zhang, 2021). In her view, this leads to a certain equilibrium between the parties, although not complete, which may justify its definition as ‘exceptional.’ In any case, this leads to an ‘extraterritorial’ applicability of Chinese law. In a more direct manner, Chinese courts may take decisions with explicit extraterritorial application. This has been the case of the so-called fair, reasonable, and non-discriminatory licenses (FRAND) for standard essential patents (SEPs), particularly in regulated areas where access to a certain technology is necessary to the deployment of the technology. The most evident case is that of 5G technologies and others in telecommunications. Chinese courts are also now often faster in delivering rulings and in providing injunctive relief measures, which leads to their prominence in global regulation (Contreras & Yu, 2020). 3.3

Chinese Firms Are Turned into Global Private Regulators (Enforcing Their Contracts Across Global Value Chains and Their Privacy Standards, Seen in E-commerce Retailers and Big Tech Platforms More Prominently)

In areas where regulation is insufficient or non-existent, such as in artificial intelligence, the lack of rules means the applicability of the standards selected by the operator company. For example, every time a user opens the famous TikTok social media app in Brazil, although he/she/they does not access the same platform as the one available in China, they consent to data and privacy policies which were designed by the Chinese owning company. This is of course not new, and individuals have equally consented (although defining whether they really consent is questionable) to the policies of Facebook, Google, and all other big tech platforms based in the US. The Brazilian national authorities, therefore, have the important role of regulating in a transparent and non-discriminatory manner as to avoid what has been reported in many countries, i.e., a disguised protectionist policy in the form of ‘national security.’ The lack

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of regulation means a full acceptance of standards of foreign private firms; ensuring that they comply with national norms is necessary.

4

Implications for Brazilian Stakeholders

The implications of the changing landscape in China and between China and Brazil are multiple—but they are also variable. Chinese investments in Latin America have soared over the last few decades, and China is now the biggest trade partner for almost all countries in the region, with the notable exception of Mexico. Latin America as a region is not the core of Chinese market expansion policies; it contains huge domestic markets, many industrialized countries, and various natural resources and commodities. The Belt and Road Initiative also did not prioritize the region, but various countries have nonetheless had strong bilateral agreements of various sorts with China, including cultural cooperation, infrastructure, and trade agreements. The portfolio of Chinese investments and trade across the region remains mainly focused on commodities, the energy sector, and exports of manufactured goods. This is the general backdrop against which the issue of IP in Chinese-Latin American relations needs to be addressed. For this reason, IP issues are not at the forefront of the determining factors in business relations and diplomatic engagements. When compared to China-US trade relations over the last few decades, this is a major difference and may represent and opportunity for countries like Brazil.14 Given the fact that IP is not central to Chinese-Latin American engagements and agreements, this may be both an opportunity for Latin American countries to use their policy space more prominently (e.g., creating technology transfer policies similar to the ones that China created for itself, learning from its experience when and if applicable) and a manner to ensure a new kind of engagement that avoids TRIPSPlus provisions and excessive market liberalization. This may also present 14 One relative and partial exception can be found in the expansion of 5G networks, particularly the role of Huawei. This is a sector with multiple IP rights and therefore IP licensing plays a prominent role at the intersection of competition authorities and courts’ interpretation of FRAND and SEPs (whose case law is scarce in Latin America), as previously mentioned. However, the participation of Huawei in domestic markets such as Brazil was deeply marked by political clashes and national security arguments akin to those in the United States and Canada, leaving technology dependency and IP as secondary issues.

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opportunities to introduce human rights and environmental standards/ commitments in Latin America with respect to the business operations of Chinese firms in trade and investment agreements, but distinct from the criticized models of the EU. Indeed, China, at least for the time being, adopts a different approach in trade and investment agreements that do not include TRIPS-Plus provisions that may impact access to affordable medicines in the global south (an issue which became more obvious with the COVID-19 pandemic). This can be seen positively and as a window of opportunity. There is, however, no guarantee that this will remain so in the future. Accordingly, constant monitoring and knowledge about contemporary Chinese policies are needed from a governmental point of view. On the one hand, it could be argued that the general pragmatism noticed in the commercial and financial sector is beneficial to the continuation of the ties between firms and business representatives’ entities. Brazilian exports have become largely dependent on China, and although generally to a different degree, Chinese entities who operate in Brazil or with Brazilian goods, materials, and services do not or cannot lose such market access. But it is impossible to ignore the geopolitical tensions between the two countries, particularly during the years of Brazil’s former president Jair Bolsonaro. Other implications are less visible but nonetheless important. The enormous rise in the number of patent applications in China and by Chinese entities leads to the obvious necessity to translate documents into Mandarin. Chinese entities typically file less patent applications in Latin American countries compared to how many are deposited in the US or the EU, but Brazil is by far the jurisdiction in the region with the biggest number of such filings. In many IP offices around the world and at the WIPO, there is increasing demand for staff who can translate and navigate Chinese documents. It has been reported that the Chinese IP office, the CNIPA, has also become a common source for patent landscape searches15 ; its database is more comprehensive and updated at a faster pace than most other IP authorities. In other words, practices in

15 For instance, when a private law firm needs to conduct a patent landscape analysis, it now often conducts searches in the Chinese CNIPA and no longer exclusively at the USPTO, EPO, JPO, and KIPO.

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law firms have already adapted to account to such changes; very pragmatically, for those ‘navigating’ the global IP system, it is inevitable to take Chinese applicants and Chinese institutions into account. These transformations are a behavioral change that may even lead to broader transformations in other aspects of the IP system. In my previous research, this was conceived as a starting point for the regimes of representations around IP and China (the IP ‘with Chinese characteristics’) which aims at disentangling the notion of cheap, pirate and counterfeiting from contemporary China. But it also concluded that any such changes do not substantially change the very foundational logic of the IP system, which continues to be based on exclusivities, monopolies, and exclusion, rather than inclusion and access (Ido, 2021). In a similar manner, Brazilian companies and researchers need to engage with Chinese partners and change/adopt new contractual, licensing, and business practices. This ranges from the negotiating techniques which may largely differ from Western companies, but also in terms of the allocation of rights and obligations. They also need to take into account the different functioning of dispute settlement systems and other potential competitors.

5

Conclusion

As this chapter argued, the major transformation in science and technology in China is intertwined with the massive recent changes in its IP regime. However, China’s development was not based on strong IP rules but rather on the opposite: a flexible system which only then enabled the current approach. This should be an important lesson for pressures to adopt a maximalist system in Brazil. China’s economic growth and political growth have also generated intense discussions on Chinese standards in international law and governance (Erie, 2021; Shaffer & Gao, 2020). Framed along these lines, although China does not adopt the center stage in international IP discussions, its role in shaping global IP law will continue increasing at the WTO, the WIPO, and at regional and bilateral fora, such as the Regional Comprehensive Economic Partnership (RCEP) and BRI projects. Countries will also increasingly engage with China, either seeking collaboration, critical cooperation, or confrontation. Companies willing to operate in China need to abide by domestic standards and may themselves need to ‘adopt’ Chinese characteristics—such as in the case of data and R&D

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(Leonard, 2021).16 At the same time, China will be also increasingly subject to scrutiny and demands—both by domestic stakeholders abroad and by other countries. This is an outcome of the country’s economic growth and geopolitical expansion. Is China potentially assuming the role of norm-maker of international rules and pushing for the adoption of its own national standards abroad? As noted in the previous sections, the answer can be distilled along the following lines: To start, with respect to formal international norms, such as those negotiated as the WTO and WIPO, China refrains from adopting an active role, at least for the time being, but actively supports the multilateral system and the protection of IP from a ‘mainstream’ perspective. In addition, Chinese regulatory standards can have extraterritorial implications, such as in the fields of data privacy, artificial intelligence, banking, environmental, and competition law enforcement. This applies to companies which wish to undertake businesses in China but also for the Chinese companies operating in countries such as Brazil—similarly to the enforcement of US or European companies operating abroad. However, Chinese firms, especially big tech and e-commerce platforms, have already had an impact, albeit often indirect, in other legal systems. Part of it may seem trivial, but not irrelevant: Brazilian law firms and the Brazilian IP office (INPI) are increasingly faced with applications by Chinese applicants, require knowledge of Chinese business practices and sometimes even language. Brazilian entities also need to often adopt standards of such

16 ‘One implication of the new China shock is that the new rules on data, research and development, and standards will force prominent Western companies to acquire Chinese characteristics, unless they withdraw from China altogether. As one well-placed privatesector observer put it to me, “China’s idea is that if companies like Daimler or Volkswagen want to work in China, they will have to move services, R&D, and new products there. Beijing hopes that dual circulation will transform them into Chinese companies.” Needless to say, the new China shock demands a different set of responses than the old one did. Rather than trying to transform China or make inroads into the Chinese market, the West’s priority must be to transform itself, not least by developing industrial and investment policies to spur innovation and protect its IP. And to ensure that their economic “champions” have access to economies of scale, Western countries must establish shared standards for privacy, data protection, carbon pricing, and other issues. Ideally, this cooperation would formalize new trade agreements, investment packages, financing, and regulations to expand the share of the global economy that is open to non-Chinese technologies and frameworks.’ See Leonard (2021).

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companies, such as the privacy and data regulation corporate standards, especially if the matter is unregulated at the domestic level. Such landscape, therefore, complexifies and provides nuances to the potentials, limits, and challenges for the interplay between China and Brazil. From this analysis, four main policy recommendations can be extracted for Brazil, as per below. Firstly, more comprehensive and deep knowledge is necessary about Chinese innovation landscape and in managing/operating IP in and with China. In their respective areas, Brazilian stakeholders already need to do that, but a more cross-cutting and comprehensive analysis should be developed. Secondly, the historical lesson from the Chinese innovation and IP experience is not that Brazil should maximize the protection of IP to promote innovation, but rather that it should maximize its technology transfer and R&D policies instead (which, for the most part, stringent IP protection is detrimental to). This requires a major change on current policies, given that most innovation tools have been largely dismantled, underfunded, and short-sighted. Thirdly, and very importantly, the current confrontational approach needs to be replaced with a pragmatic approach by the Brazilian government. The cooperation between Brazilian public health institute Butantan and Chinese private biotechnology firm Sinovac for the development of a COVID-19 vaccine can be elucidative of a positive ‘transnational’ example based on pragmatism and mutual benefits. This does not mean that all cases would be necessarily favorable to all Brazilian stakeholders (the environmental consequences of operations in the Amazon are partly a counterexample) but enables a call for pragmatism instead of ideological confrontation. Finally, this general context only reinforces the need to consider a trade and innovation policy that integrates, rather than dismisses, sociotechnical and sociological issues—including the issues of intersectionality, inequalities, access to technologies, gender, race, sexual orientation, sustainability, human rights, among others. The call for pragmatism, therefore, requires a complexification of existing assessments beyond purely economic interests.

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Sanchez-Badin, M. R., & Morosini, F. (2021). International economic law by other means: A three-level matrix of Chinese investments in Brazil’s electric power sector. Harvard International Law Journal, 62, 105–136. Shaffer, G., & Gao, H. (2020). A new Chinese economic order? Journal of International Economic Law, 23(3), 607–635. Syam, N. (2021). Robust patent examination or deep harmonization? Cooperation and work sharing between patent offices. In C. Correa & R. Hilty (Eds.), Access to medicines and vaccines: Implementing flexibilities under intellectual property law (pp. 241–276). Springer. Weber, I. (2021). How China escaped shock therapy. Routledge. Wu, M. (2016). The ‘China, Inc.’ Challenge to global trade governance. Harvard International Law Journal, 57 (2), 261–324. Wübbeke, J., Meissner, M., Zenglein, M., Ives, J., & Conrad, B. (2016). Made in China 2025—The making of a high-tech superpower and consequences for industrial countries. Mercator Institute for China Studies (Merics) Papers on China, No. 2. https://merics.org/sites/default/files/2020-04/Made%20in% 20China%202025.pdf. Accessed 24 January 2023. Yu, P. K. (2019a). China, ‘belt and road’ and intellectual property cooperation. Global Trade and Customs Journal, 14, 19-04. Yu, P. K. (2019b). The rise of China in the international intellectual property regime. In K. Zeng (Ed.), Handbook on the international political economy of China. Edward Elgar Publishing. Zhang, A. (2021). Chinese antitrust exceptionalism: How the rise of China challenges global regulation. Oxford University Press. Zumbansen, P. (2008). Transnational law. Comparative research in law & political economy (Research Paper No. 9/2008). http://digitalcommons.osgoode. yorku.ca/clpe/181. Accessed 24 January 2023.

Chinese Railway Investments in Brazil: Socio-Environmental Implications for the Amazon and Cerrado Adriana Erthal Abdenur, Maurício Santoro, and Maiara Folly

1

Introduction1

As China’s interests and presence in Latin America and the Caribbean (LAC) expand, Chinese firms have been changing their strategy in Brazil. More specifically, they have been diversifying away from buying financial assets toward more greenfield investments, through which Chinaheadquartered companies develop local operations using Brazil-based subsidiaries. Transportation is a key sector for such investments not only 1 This chapter was adapted from a longer paper published by Carnegie Endowment for International Peace in August 2021 in its project China Local/Global. Available from: https://carnegieendowment.org/2021/08/04/what-railway-deals-taught-chi nese-and-brazilians-in-amazon-pub-85088.

A. E. Abdenur (B) · M. Folly Plataforma CIPÓ, Rio de Janeiro, Brazil e-mail: [email protected] M. Folly e-mail: [email protected] M. Santoro State University of Rio de Janeiro, Rio de Janeiro, Brazil © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_5

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due to the vast demand in Brazil, but also because of the accumulated experience of Chinese firms in transportation projects elsewhere in LAC and across Asia and Africa, as well as the Chinese government’s economic and strategic interests in this sector. As these transportation projects are planned and implemented, both Brazilian and Chinese actors are working to learn, adapt, and negotiate the parameters, norms, and practices around these initiatives. The expansion and diversification of Chinese infrastructure investments in Brazil are intensifying debates about the socio-environmental risks of large-scale projects, including those that affect environmentally sensitive biomes, such as the Amazon basin and the Cerrado savanna region in Brazil’s Center-West. In Brazil, Chinese actors encounter a complex set of actors and sets of regulations that are more difficult to decipher and navigate than in many other developing countries. That is because Brazil’s regulatory frameworks are generally more robust and less flexible than those in other Latin American and African countries and because its bureaucracy is extremely complicated. Moreover, in much of Brazil, there is a strong, if embattled, organized civil society that has vigorously opposed the environmental and climate policies of farright President Jair Bolsonaro. Finally, subnational governments, both at municipal and state levels, many of whose leaders are at odds with the government of Jair Bolsonaro, increasingly have sought greater autonomy in decision-making, even if, by law, agreements must be signed at the federal level. Many aspects of Chinese investments in Brazil are best understood through the prism of institutional learning. This encompasses the way in which these actors seek and incorporate new knowledge as part of a complex process of mutual adaptation, a highly dynamic process. Even as Brazilian and Chinese actors engage in negotiations and become better acquainted with their respective norms and practices, they also come under pressure from societal and political actors in Brazil and abroad, especially given the sharpening debates around climate change and sustainable development. This paper explores two key questions: First, how has institutional learning about the mitigation and management of socio-environmental risks been unfolding around Chinese investments in transport infrastructure in Brazil? Second, what specific types of adaptations have emerged out of it, on both Brazilian and Chinese sides? The paper focuses on the Ferrogrão railroad project, which is planned to run from the agribusiness

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powerhouse state of Mato Grosso to the northern state of Pará. If environmental licenses for the project’s installation and operation are granted, this railway will affect both the Cerrado and the Amazon, areas inhabited by indigenous peoples, quilombolas (Afro-descending populations) and other traditional communities, as well as areas inhabited by small farmers. Although the project is still under negotiation, it has already been the subject of much controversy in Brazil. Economically, the Ferrogrão is being questioned for its costs. Politically, Ferrogrão is set to take place in a charged environment marked by sharpening debates over sustainable development but also by strong lobbying from interest groups representing everyone from agribusinesses to truck drivers. The project is being planned even as pressure increases on infrastructure actors in Brazil to implement environment, social, and governance (ESG) principles and, more broadly, to adopt more sustainable practices.

2 Institutional Learning in Transport Infrastructure Projects Between 2005 and 2019, China’s investments in Brazil were concentrated in energy (72%) and mining (7.4%). Transport received 6% of the total, totaling US$4 billion.2 China’s infrastructure investments often deal with political and economic dilemmas that exemplify Brazil’s troubles of recent decades. As in much of LAC, the lack of investment in infrastructure has been one of the biggest bottlenecks of economic growth in Brazil. Since the late 1970s, when the national-developmentalist model entered a period of crisis, the country has suffered from low investments in energy and transportation. For more than forty years, Brazilian governments have been investing less than 3% of GDP in infrastructure.3 Specialists consider that amount well below what is required even for the maintenance of existing facilities.

2 Tulio Cariello, “Investimentos Chineses No Brasil (2018): o Quadro Brasileiro Em Perspectiva Global,” Conselho Empresarial Brasil-China, September 23, 2019, https://www.cebc.org.br/2019/09/23/investimentos-chineses-no-brasil-2018-oquadro-brasileiro-em-perspectiva-global/. 3 Matthew MacLeod Taylor, Decadent Developmentalism: The Political Economy of Democratic Brazil (Cambridge: Cambridge University Press, 2020).

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Railways are one of the most neglected areas of Brazil’s infrastructure. This is, in part, a consequence of policies that heavily favored road transportation. Since the 1980s, the country has invested yearly in railways only 0.15% of its GDP. As a consequence, in 2018 Brazil had just 30,000 km of railway lines, in comparison to 202,000 km in the United States and 146,000 km in China.4 Only 15% of Brazilian cargo is transported through railways, while in countries such as China and the US, the percentage is triple that figure.5 Most of the cargo transported is iron ore, due to a decades-long interest by the giant mining company Vale in building this kind of infrastructure to connect its mines and ports.6 With the recession and political crises of the 2010s, successive Brazilian governments came under growing pressure from several important economic actors, such as the agribusiness companies, to address these logistical gaps. In response, they sought to attract private investment—both domestic and foreign—to expand the country’s infrastructure through public-private partnerships (PPPs) and state concessions granted through public auctions. The most important government initiative in this area is the Investment Partnership Program (Programa de Parceria em Investimentos—PPI), created in 2016. In the railway sector, the PPI aims to attract R$29 billion (US$5.5 billion) in concessions meant to expand Brazil’s railroads by 2,800 km.7 As of 2021, there are six projects under discussion and four others already completed.8 Since the global commodities boom of the 2000s, Asia—especially China—became the biggest foreign market for Brazilian agribusiness

4 Marchetti, D. et al. “Logística”. In: Fernando Puga and Lavinia Barros de Castro. Visão 2035: Brasil, país desenvolvido (Rio de Janeiro: BNDES, 2018). 5 Ibid. 6 Andre Guilherme Delgado Vieira, O Mapa Da Mina: a Guerra Dos Conglomerados

Globais De Mineração Pela Conquista Da Carajás Africana (Curitiba: Kotter Editorial, 2021). 7 Giorgio Romano Schutte, Oásis Para o Capital - Solo Fértil Para a ´Corrida Do Ouro´: a Dinâmica Dos Investimentos Produtivos Chineses No Brasil (Curitiba: Appris Editora, 2020), p. 102. 8 “Projects,” The Investment Partnerships Program, accessed March 2021, https:// www.ppi.gov.br/projects#/s/In%20progress/u//e/Railroad/m//r/.

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(Jank et al., 2020).9 Given the territorial expanse of Brazil, the logistics costs are huge, and exporters depend on highways to transport most of their cargo to the ports. There are also political risks. In 2018, truck drivers shut down the economy for an entire week, in a strike aimed at securing better pay and benefits. They achieved part of their goals and have remained an important pressure group since then. To Chinese actors, investments in transportation infrastructure in Brazil are linked to concerns about the export of commodities to Asia. Building railways, warehouses, and ports would make it cheaper and quicker to move soybeans and iron ore from farms and mines to the ships that will transport them to the other side of the world. Chinese companies enjoy important advantages in this kind of business: From China’s perspective, investments in infrastructure, beyond the return for the investors, are attractive because they will ensure a more efficient flow of the main export products (soybeans and minerals) to the Asian giant. … Chinese companies have great capacity to take part in auctions and to win them, because they have access to financing and a huge expertise in infrastructure.10

One example is found in Pará, a state in the Brazilian Amazon rich in natural resources, and one of the country’s main agricultural frontiers, where soy cultivation has been expanding rapidly. It is also a hotspot of environmental crimes such as land invasions, illegal deforestation, forest fires, and illegal logging and mining. Pará is thus a place of rampant social and environmental conflict, especially due to the impact of these initiatives on indigenous peoples, riverside communities, and other traditional populations. Despite the challenges of operating in such a complex environment, Chinese actors have expressed interest in expanding their presence in the region, including through the Pará Railway, a joint venture between the state-owned China Communications Construction Company (CCCC) and Vale. During its initial phase, the railway is expected to connect the city of Marabá to the port of Barcarena, a distance of about 500 km.

9 Marcos Jank, Pei Guo e Silvia de Miranda. China-Brazil: Partnership on Agriculture and Food Security (Piracicaba: Esalq, 2020). 10 Schutte, Oásis Para o Capital - Solo Fértil Para a ´Corrida Do Ouro´: a Dinâmica Dos Investimentos Produtivos Chineses No Brasil, 102–103.

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Construction is set to start in 2021, with a budget of R$7 billion (US$1.3 billion), transporting iron ore from the Carajás complex, the largest iron ore mine in the world. During a second phase, the railway will be extended southward to the city of Santana do Araguaia, to include the export of meat and grains.11 However, in many cases, Chinese investments in railways in Latin America have been announced, but never implemented due to social and environmental concerns or technical problems. Examples include an ambitious project linking the Atlantic and Pacific Oceans through Brazil and Peru and a Venezuela bullet train.12 In 2016, a plan to build the West-East Integration Railway (Ferrovia de Integração Oeste-Leste—FIOL), a R$12 billion (US$2.2 billion), 1,500 km initiative connecting the northeast state of Bahia to the state of Tocantins in Brazil’s Center-West, where it would link with the North-South Railway, reached an impasse when the Chinese government proposed to Brazil the creation of a binational state-owned company. Brazil’s then minister of transportation disliked the idea of a joint venture between the China Railway Construction Corporation and the Brazilian state company Valec: There would be no auction nor competition, it would not allow us to dialogue with other players in order to get the best proposal. … Of course we need investments. But the other possibility is a normal, pure concession. I can’t say that we prefer this, but Brazil has established rules.13

The minister also called attention to the fact that, in addition to requiring a change in Brazilian legislation, the model proposed by China would encourage other international actors to demand similar terms: “The Russians, who are interested in the North-South railway, could want the same.”14 11 Richard Kemeny, “Ferrovia Pará Enfrenta Resistência,” Dialogo Chino, March 4, 2020, https://dialogochino.net/pt-br/pt/33830-ferrovia-para-enfrenta-resistencia/. 12 Fermín

Koop, “Chinese Rail Advances Slowly in Latin America,” Dialogo Chino, October 1, 2019, https://dialogochino.net/en/infrastructure/30573-chinese-railadvances-slowly-in-latin-america/. 13 Assis Moreira, “China Propõe Ao Brasil Criar Estatal Binacional Para Construir Ferrovia,” Valor Econômico, 2019, https://valor.globo.com/brasil/coluna/china-propoeao-brasil-criar-estatal-binacional-para-construir-ferrovia.ghtml. 14 Ibid.

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Chinese companies have learned a number of lessons when investing in railways in LAC, acquiring a more in-depth understanding of the region’s legal and political realities, and thus better adapting to them. As part of this institutional learning process, Chinese railway companies are learning to operate in LAC by dealing with socio-environmental rules, complex litigation, and public auctions for concessions, which became the preferred way for the Brazilian government to attract investment for its infrastructure projects. This is the result of a decade-long learning curve, and it is especially important in Brazil for the expansion of two major transportation bottlenecks: highways and railways.15 Due to its timing and geographical location, which has direct implications for a broad swath of the Amazon and Cerrado regions, the Ferrogrão project in Brazil offers a strategic space in which to study these processes of Chinese adaptation to local realities and constraints.

3

The Ferrogrão Railway Project

The planned EF-170 railway, also known as Ferrogrão, aims to link the state of Mato Grosso, in Brazil’s Central-West region, to Pará, in the eastern part of the Amazon, across 933 km. If its implementation is given the go-ahead by Brazilian courts, it is set to begin operating in 2030. According to the plans, at first the tracks will connect the city of Sinop, in Mato Grosso, to the river port of Miritituba, on the Tapajós river in Pará, but other connections are also foreseen.16 The main goal is to transport grain production via the Northern Arc—Brazilian ports in the Brazilian north and northeast—which nowadays is carried out via the North-South highway BR-163, one of the main roads in Brazil’s interior. The corridor to be consolidated by Ferrogrão and the highway will constitute a new route for exporting soy and corn, fertilizer, sugar, ethanol, and oil derivatives. 15 Tatiana Rosito, Bases De Uma Estratégia De Longo Prazo Do Brasil Para a China (Rio de Janeiro: Conselho Empresarial Brasil-China, 2020), pp. 123–127. 16 There is also a planned extension between Itaituba and Santarenzinho, in the municipality of Rurópolis / PA, with 32 km, and the Itapacurá branch, with 11 km, possible leasing of new terminals. A railway extension is planned between Sinop (MT) and Lucas do Rio Verde (MT), with 177 km extension and investments subject to the rebalancing of the concession contract. (See, “Concessão Da Ferrogrão, Trecho Sinop/MT a Itautiba/PA,” PPI Programa de Parcerias de Investimentos, 2019, https://ox.socioambiental.org/sites/ default/files/ficha-tecnica/node/142/edit/2019-09/cartilha-ferrograo-fev2019.pdf.).

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The project was first conceived in 2012, when Brazil’s government, during the presidential administration of Dilma Rousseff (2011–2016), proposed to cut the country’s logistical costs, which are exceptionally high by international standards, by 30%.17 The government announcement of its intention to invest in 10,000 km of railway prompted private sector companies to begin identifying potential areas where railway expansion would lead to an increase in agricultural production.18 One of the areas identified was Mato Grosso, an agribusiness powerhouse, with an overwhelming focus on cultivation of soybeans (83%) followed by wood (5.6%), meat (4.8%), and cotton (3.3%).19 The state is the largest producer of soy in Brazil, accounting for 26.9% of the national total in 2020 at 33 million tons.20 Since 2019, it has the largest cattle herd in the country, at 30 million, around 14% of national production.21 However, Mato Grosso—especially the northern part of the state—has inadequate capacity for transporting commodities to ports for export abroad, including to China. For now, its production is exported via the ports of Santos (in São Paulo state) and Paranaguá (Paraná state), both over 2,000 km away from Mato Grosso. The Ferrogrão project has been hailed by many private sector actors as a turning point for Brazilian commodity exports. The owner of the largest soybean-producing conglomerate in Mato Grosso, Bom Futuro Group, has stated that the Ferrogrão will yield a revolution in agriculture, allowing for another economic boom in Mato Grosso along the

17 Naira

Infante Bertão, “Pacote portuário é bem recebido por empresários”, Veja, December 6, 2021, https://veja.abril.com.br/economia/pacote-portuario-e-bem-rec ebido-por-empresarios/. 18 Vladimir Netto, “Dilma Rousseff anuncia pacote de concessão de estradas e

ferrovias”, 18 August 2012, http://g1.globo.com/jornal-da-globo/noticia/2012/08/ dilma-rousseff-anuncia-pacote-de-concessao-de-estradas-e-ferrovias.html. 19 “‘Ferrogrão é a Nova Revolução Na Agricultura’, Diz Executivo,” Estadao, October 30, 2019, https://summitagro.estadao.com.br/agro-no-brasil/entrevistas/ferrograo-e-anova-revolucao-na-agricultura-diz-executivo/. 20 Agência IBGE, “IBGE prevê safra recorde de grãos em 2020”, 8 January 2020, https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013-agencia-denoticias/releases/26537-ibge-preve-safra-recorde-de-graos-em-2020. 21 Agência IBGE, “PPM 2019: após dois anos de quada, rebanho bovino cresce 0,5%”, 15 October 2020, https://agenciadenoticias.ibge.gov.br/agencia-sala-de-imprensa/2013agencia-de-noticias/releases/29163-ppm-2019-apos-dois-anos-de-queda-rebanho-bovinocresce-0-4.

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lines of what took place in the 1970s and the 1980s, when large-scale agriculture was implemented in the state.22 The private sector has also presented the railway’s impact along the tracks as an opportunity for development: “When Brazil has the infrastructure that it deserves and needs, we’ll have strong development not only in Mato Grosso, but along the entire development track of the railroad.”23 Like Pará, Mato Grosso is part of the arc of deforestation, a curve along the southeastern edge of the remaining forest, where land is being cleared for agriculture—especially soybeans—ranching, logging, and land speculation. From 2019 to 2020, Mato Grosso had the secondhighest deforestation rate in the country (after Pará), and 88% of this deforestation was illegal, totaling over 1,700 square km of destroyed vegetation cover that year alone.24 Mato Grosso is also socioeconomically very diverse. In 2020, some 42,538 indigenous people, belonging to forty-two ethnic groups lived in the state, most of them on indigenous lands.25 Out of the state’s 141 municipalities, fifty-five contain indigenous lands.26 Around 12% of Mato Grosso is composed of indigenous lands, and another twenty-one areas are undergoing demarcation. The state is also home to twenty-two quilombola (Afro-descending) communities distributed across fifteen municipalities.27 The state of Pará has the country’s highest rate of deforestation, especially due to the expansion of illegal logging, cattle ranching, and

22 “‘Ferrogrão é a Nova Revolução Na Agricultura’, Diz Executivo,” Estadão, October 30, 2019, https://summitagro.estadao.com.br/agro-no-brasil/entrevistas/ferrograo-e-anova-revolucao-na-agricultura-diz-executivo/. 23 Ibid. (Quoted translated by the authors). 24 “Desmatamento Na Amazônia Em MT 2020 é o Maior Registrado Em 12 Anos

e Estado Está Longe De Cumprir Acordo Feito Em Paris,” Globo.com, December 4, 2020, https://g1.globo.com/mt/mato-grosso/noticia/2020/12/04/desmatamento-naamazonia-em-mt-2020-e-o-maior-registrado-em-12-anos-e-estado-esta-longe-de-cumpriracordo-feito-em-paris.ghtml. 25 Victor Cabral, “12% Do Território De MT Têm Reserva Indígena; População

Chega a 42 Mil,” RD News, accessed 2021, https://www.rdnews.com.br/rdnews-exc lusivo/embates-indigenas/12-do-territorio-de-mt-tem-reserva-indigena-populacao-chegaa-42-mil/51335. 26 Ibid. 27 “Comunidades Quilombolas,” Subsecretaria Especial de Cidadania, Governo Do

Estado, accessed 2021, https://www.secid.ms.gov.br/comunidades-quilombolas-2/.

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soy farming.28 This phenomenon has fueled ongoing conflicts over land rights between the Brazilian government, indigenous communities and other traditional communities, and ranchers. The majority of the population is of mixed ethnicity, due to the large indigenous populations (the biggest indigenousindigenous communities include the Andira Marau, Munduruku, and Kayapó) and, to a lesser extent, quilombola communities. Pará is home to approximately forty indigenous groups, scattered throughout an area of over 23 million hectares, of which about 8 million hectares have been demarcated by the government National Indian Foundation (FUNAI).29 Pará’s top exports are iron ore, aluminum, soybeans, and wood, and the flow of commodities depends on the state’s limited infrastructure, including ports, the main ones being Belém, Vila do Conde, Miramar, and Santaré. The Ferrogrão and BR-163 extension may bring another port area to this list. Miritituba, a town of approximately 100,000 inhabitants on the banks of the Tapajós river, is part of the municipality of Itaituba. Miritituba is closer than the ports of Santos and Paranaguá to the soya producers in Mato Grosso, but so far access has been challenging due to the poor infrastructure, especially dependence on a 20 km stretch of the Trans-Amazonian Highway (BR-230) that cuts across BR-163. Given these challenges, until recently, Miritituba was overlooked as a potential Amazon route for exports from the Center-West in favor of nearby Santarém port.30 While large cargo ships are unable to reach Miritituba from the Atlantic Ocean due to the shallowness of the Tapajós river along this stretch, flat-bottomed barges are able to carry considerable cargo along the river. There is a long history of Mato Grosso agribusiness players and their politician supporters, such as former Mato Grosso governor Blairo Maggi, pushing for the idea of better connections so that commodities can be exported at greater scale via the Amazon. As a result of this plan and the longer-term perspective of the Ferrogrão railway being implemented, land in Miritituba has become highly sought by private companies, including American giant agribusiness companies 28 DW, Pará completa 15 anos como líder em queimadas e desmatamento, 4 December 2020, https://www.dw.com/pt-br/pará-completa-15-anos-como-l%C3% ADder-em-queimadas-e-desmatamento/a-55820342. 29 Instituto Socioambiental (n.d.) Quadro geral dos povos. https://pib.socioambiental. org/pt/Quadro_Geral_dos_Povos. 30 In Santarém there is strong resistance by environmental movements to port projects.

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like Bunge and Cargill, as well as by large logistics companies. All of these companies are rushing to buy plots in Miritituba even as they carry out environmental licensing processes for building their terminals in the port area.31 Plans for Ferrogrão are being discussed in a part of Brazil marked by high tensions around land use. Indeed, shortly after technicians ascertained that the BR-163 road—which the government had planned to add additional lanes to—lent itself to railway construction due to long stretches of flat land, discussions began around the project’s expected environmental impact. The private sector, based on initial assessments, argued that there would be advantages in building a railroad instead of duplicating the road by adding additional lanes, calculating the potential difference of greenhouse gas emissions at approximately 1 million tons of CO2 per year in comparison with the BR-163 duplication.32 Some private sector actors even claimed that the railway project entailed “zero deforestation” because it would cut through areas already cleared for BR-163.33 Yet the project also has its critics and opponents. With respect to social and environmental impacts, the route planned for the railway is expected to affect forty-eight protected areas, including nineteen Indigenous Lands, including the Paraná and Kayapó TIs. Concerns have been expressed over deforestation for new production areas; elimination of forest remains; increase of the use and contamination of water resources; intensification of the use of fertilizers; and increase in land ownership concentration.34 These concerns have been amplified by the fact that the project has not involved previous consultation with the local communities expected to be affected by the initiative, in violation of the International Labour Organization (ILO) Convention 169. Several 31 André Borges, “Gigantes Da Logística Descobrem Miritituba,” Valor, March 27, 2013, https://valor.globo.com/brasil/noticia/2013/03/27/gigantes-da-logistica-descob rem-miritituba.ghtml. 32 ‘Ferrogrão é a Nova Revolução Na Agricultura’, Diz Executivo,” Estadao, October 30, 2019, https://summitagro.estadao.com.br/agro-no-brasil/entrevistas/ferrograo-e-anova-revolucao-na-agricultura-diz-executivo/. 33 Ibid. 34 “Dezenas De Povos Indigenas e Ribeirinhos Lutam Contra Projeto Ferrogrão,”

Mapa De Conflitos Envolvendo Injustica Ambiental E Saude No Brasil, accessed 2021, http://mapadeconflitos.ensp.fiocruz.br/conflito/mt-dezenas-de-povos-indigenas-eribeirinhos-lutam-contra-projeto-ferrograo/.

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of these communities have expressed their alarm to the government. For instance, in November 2017, the Kayapó Mekragnoti, an indigenous group in Pará, sent a letter to Brazil’s Prosecution Authority (the Federal Public Ministry), the National Agency for Land Transportation (Agência Nacional de Transportes Terrestres—ANTT) and the president of the public audiences of Ferrogrão arguing that: The railroad today already impacts the peoples of the region, even though it has not yet left paper. The number of amendments to decrease the protection of Conservation Units that deputies made in Congress shows the size of pressure from farmers in our region. Many farmers and gold diggers here are politicians. Ferrogrão will not transport people. But, it will transport soybeans, corn, sugar, diesel, gasoline, alcohol and fertilizers. Studies say that the demand for the railroad to transport these products will almost double from 23 million tons to 40 million tons, between 2020 and 2050. If the railway has already caused all these impacts before leaving the paper, when this project is so big the impacts are going to be much greater.35

Indeed, preliminary environmental impact studies conducted by the ANTT acknowledged that: Indigenous and traditional cultures may undergo a process of disruption caused by contact with new cultural elements, brought by people who will come to the region, such as construction workers and the migrant population associated with these movements.36

In December of 2017, around ninety members of the Munduruku community blocked a building in Itaituba, Pará, where the first of a series of six public audiences would be held at the request of ANTT to gather society input for the technical studies on the implementation of the Ferrogrão project, arguing that they would only leave when the meeting was canceled. They also called the public auction for Ferrogrão illegal

35 Ibid. 36 Instituto Kabu, “A participação dos povos indígenas afetados pelo Ferrogrão (EF-

170) no licenciamento Ambiental e realização de consulta livre, prévia e informada (CLPI)”, November 9, 2021, https://www.socioambiental.org/sites/blog.socioambiental. org/files/nsa/arquivos/carta_031-2017.pdf.

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due to the lack of previous consultation.37 Ever since, dozens of traditional communities along the planned tracks have criticized and requested the suspension of the project. Since May 2021, the Public Ministry has defended that the previous consultation should be carried out with the nineteen indigenous groups within the Ferrogrão’s zone of influence, in addition to fishing, agro-extractivism, and other traditional communities vulnerable to the project’s impacts.38 Among the most sensitive areas, the tracks would cut across the Jamanxim National Park, a Conservation Unit of almost 900,000 hectares with the highest rates of illegal deforestation among conservation units in the Legal Amazon.39 In addition to having the BR-163 cut across its eastern part, the park is already under tremendous pressure from agricultural expansion and wood extraction. Because of the risks that Ferrogrão would greatly expand these threats to the conservation unit, in 2019, the Federal Public Ministry recommended that the ANTT modify the Ferrogrão project route and that the park’s territory be considered as an integral unit. The left-wing Socialism and Liberty Party (PSOL) filed a lawsuit to suspend the railway project, and in April 2021, Brazil’s Supreme Court issued a favorable decision.40 The second controversy around the Ferrogrão project concerns its costs. Estimates for the total cost of the project vary widely. According to Brazilian government calculations, the Ferrogrão railway will cost approximately R$21.5 billion (US$4 billion).41 Of this total, R$8.4 billion would be spent to operationalize the railroad, which is due to take place

37 Barbara Dias and Tiago Miotto, “Munduruku barram audiencia sobre ferrovia que pode impactor seu território, Conselho Missenário Indigenista”, December 4, 2017, https://cimi.org.br/2017/12/munduruku-barram-audiencia-sobre-ferrovia-quepode-impactar-seu-territorio/. 38 Isadora Perões, “Ferrogrão deve ouvir povos indígenas, defende MPF”, Valor Econômico, May 26, 2021, https://valor.globo.com/empresas/noticia/2021/05/26/fer rograo-deve-ouvir-povos-indigenas-defende-mpf.ghtml. 39 STF Suspende Andamento Da Ferrogrão Por Trecho Que Passa Em Parque Nacional,” RD News, March 16, 2021, https://www.rdnews.com.br/judiciario/stf-sus pende-andamento-da-ferrograo-por-trecho-que-passa-em-parque-nacional/141650. 40 Ibid. 41 Nicola Pamplona, “Projeto Da Ferrogrão Assume Riscos Bilionários Para o Governo,

Diz Economista,” uol.com, April 21, 2021, https://www1.folha.uol.com.br/mercado/ 2021/04/projeto-da-ferrograo-assume-riscos-bilionarios-para-o-governo-diz-economista. shtml.

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in 2030.42 Other sources estimate the total at R$12.6 billion (US$2.7 billion) for sixty-five years of concession, with the construction costs representing 70% of that total.43 Since 2018, in an effort to reduce private sector skepticism over the railway, the government has taken several measures to cut the overall cost of the project, including by increasing the project’s share to be financed by Brazil’s National Development Bank (BNDES).44 ,45 The public auction has been postponed several times, but the timeline has been affected both by the coronavirus pandemic and by scrutiny by the Federal Court of Accounts (Tribunal de Contas da União— TCU), the country’s audit court, which has expressed concerns over the potential impact the project could have upon indigenous and traditional communities, including risks of displacement.46 Some economists argue that the project entails a series of additional risks that could cost the state more billions of reais, the Brazilian currency. To offset the high levels of investment, the Brazilian government would take on several project risks. For instance, during construction, the National Treasury could cover additional costs of resettling displaced communities and of the expropriations, especially if the environmental impacts are more serious than those detailed in the contract.47 Project

42 Ibid. 43 “Ferrogrão é a nova revolução na Agricultura’, Diz Executivo,” Estadao, October

30, 2019. 44 “Governo Tenta Reduzir Custo Da Ferrogrão Para R$ 10 Bilhões,” nsctotal.com, April 24, 2018, https://www.nsctotal.com.br/noticias/governo-tenta-reduzir-custo-da-fer rograo-para-r-10-bilhoes. 45 Nicola Pamplona, “Projeto Da Ferrogrão Assume Riscos Bilionários Para o Governo, Diz Economista,” uol.com, April 21, 2021, https://www1.folha.uol.com.br/mercado/ 2021/04/projeto-da-ferrograo-assume-riscos-bilionarios-para-o-governo-diz-economista. shtml. 46 Minister Tarcísio Gomes de Freitas has stated he intends to reschedule the public auction for the first half of 2021. See, Machado da Costa, “TCU Deve Dificultar a Vida De Tarcísio Na Licitação Do Ferrogrão,” abril.com, January 12, 2021, https://veja.abril.com.br/blog/radar-economico/tcu-deve-dificultar-a-vida-detarcisio-na-licitacao-do-ferrograo/. 47 Nicola Pamplona, “Projeto Da Ferrogrão Assume Riscos Bilionários Para o Governo, Diz Economista,” uol.com, February 21, 2021.

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construction is predicted to last seven years, after which the government would help to pay for operational costs and the interest in debts acquired in the case of demand due to crop failure48 (Map 1).

4

Institutional Learning and Mutual Adaptation

Previous Chinese experiences investing in Brazilian infrastructure—especially in the 2000s—set some important precedents for the Ferrogrão case. The biggest actors in that sector—Chinese SOEs such as two central government-directed behemoths, State Grid Corporation of China, and China Three Gorges Corporation—chose to enter the Brazilian market through brownfield projects, buying assets from firms that were Brazilbased or based in other countries (such as Portugal and Spain) but that already operated in Brazil.49 Through those acquisitions, those Chinese companies retained a staff of Brazilian specialists with in-depth knowledge of Brazil’s business culture and regulatory norms, as well as familiarity with its complex legal and political system. This marked the start of a long-learning process, since at first Chinese companies had little experience in LAC and had little mutual trust with local partners. Yue Haiping, a Chinese executive who managed joint ventures between Brazilian and Chinese firms, reflected on what he learned after several years working in Latin America: It is exactly because of that incomprehension caused by the distance that the Chinese companies did not trust the Brazilians. They usually thought that they should have total control, being managed by their personnel to do things right …. Indeed, the level of internationalization of these companies [Chinese] is not high. In terms of skill and qualification, it is hard to meet somebody from these companies that really can be independent after he is sent to Brazil, to become familiar with the country, to understand

48 Ibid. 49 Pedro Henrique Batista Barbosa, “New Kids on The Block: China’s Arrival

in Brazil’s Electric Sector,” Boston University Global Development Policy Center, December 2020, https://www.bu.edu/gdp/files/2020/12/GCI_WP_012_Pedro_Hen rique_Batista_Barbosa.pdf; Tulio Cariello, “Investimentos Chineses No Brasil (2018): o Quadro Brasileiro Em Perspectiva Global,” Conselho Empresarial Brasil-China, September 23, 2019; Giorgio Romano Schutte, Oásis Para o Capital - Solo Fértil Para a ´Corrida Do Ouro´: a Dinâmica Dos Investimentos Produtivos Chineses No Brasil (Curitiba: Appris Editora, 2020).

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Map 1 Brazil)

Planned route of the Ferrogrão Railway (Source Federal Government of

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intercultural administration. It happens that this type of integration is hard to achieve. Because, after the creation of the company, many people discovered that the management team sent from China could not really control the firm. Lots of things still depended on the local staff.50

The main challenges for Chinese infrastructure investors mentioned by Yue involved how to deal with Brazil’s legal and political system. The country has a complex federal organization, which often demands that companies negotiate with mayors, governors, and national authorities to obtain permissions and pay taxes. This is especially relevant to major infrastructure projects because they often cross interstate boundaries. The CEO of State Grid Brazil, a Brazilian subsidiary of State Grid Corporation of China, while working on the implementation of the transmission line between Belo Monte dam in Pará and the southeast region of Brazil, recalled the challenges of operating in such an environment: Land acquisition [for the transmission line] engaged 3,337 property owners, and we had to negotiate with each one of them, as well as obtain 204 inter-regional licenses, including rivers, lines, highways, railways, oil ducts, small airports etc. The coordination between zones under different jurisdictions has been considerable.

In addition, Brazil has a vast and complex legislation concerning labor rights and environmental protection, and requirements can change rapidly. Brazil also has an independent judiciary and public prosecutors with an unusual degree of autonomy and power, and who work with a constitutional mandate to investigate human rights and environmental violations. And, finally, Brazil has a very robust civil society that was strengthened by the transition from military regime to democracy in the 1980s. Despite finding themselves embattled during the government of Jair Bolsonaro, civil society organizations and movements have developed effective strategies for contesting projects with high socio-environmental risks. Chinese companies learned rapidly that they needed Brazilian partners to navigate regulations and overcome the main hurdles of operating in Brazil. Their new strategy entailed maintaining the local staff of their 50 Haiping Yue, “Depois De 18 Anos, o Brasil é Como a Minha ‘Casa,’” in Histórias De Amizade Entre China e Brasil, ed. Zhiwei Zhou and Changsheng Wu (Beijing: China Intercontinental Press, 2021).

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brownfield investments while expanding partnerships, for instance by hiring Brazilian law firms and consultants to help them to deal with the Brazilian government at the national and local levels.51 This approach also allowed Chinese companies to better understand and learn about the intricacies of Brazil’s regulatory frameworks. With respect to railway investments more specifically, the most important Chinese player in Brazil is China Communications Construction Company. It is already a major investor in Brazilian rail projects, such as the Pará railroad mentioned above, and now it aims to expand its investments to the other key projects in Brazil, such as FIOL. Yet this has entailed a steep learning curve. In addition to rejecting the proposal put forth by China Railway Construction Corporation to form joint binational Brazil-Chinese companies to build railways, Brazil has clear guidelines regarding foreign investment in infrastructure. In order to stimulate competition and promote some level of transparency and accountability, concessions such as railways, highways, and airports projects must be conducted through public auctions. CCCC had to learn to adapt to these stringent and deeply embedded Brazilian realities. One important move was the 2016 establishment of its South American subsidiary, with headquarters in the Brazilian city of São Paulo, which allowed company representatives to immerse themselves in Brazilian business culture. The following year, CCCC bought the majority of shares of Concremat, a leading Brazilian engineering and consulting firm, with a long record of successful projects in the country. This acquisition enabled CCCC to become more competitive in Brazilian public auctions. In 2019, for instance, CCCC won the right to build the bridge from the city of Salvador to the island of Itaparica, a project worth US$1 billion that is expected to be the longest bridge in Brazil. CCCC also became the company in charge of the port of São Luís, a major harbor in the northeast.52 Chinese investors have also acquired greater experience advocating for projects in key regulatory and public fora in Brazil. For instance, 51 Giorgio Romano Schutte, Oásis Para o Capital - Solo Fértil Para a ´Corrida Do Ouro´: a Dinâmica Dos Investimentos Produtivos Chineses No Brasil (Curitiba: Appris Editora, 2020). 52 Liliana Lavoratti, “O Trem Para o Futuro,” China Hoje, December 30, 2020, http:/ /www.chinahoje.net/o-trem-para-o-futuro/.

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in April 2017, at a public audience convened by Brazilian senators in favor of the Bioceanic railway—an ambitious, 5,000 km stretch that would connect Brazil and Peru—engineers from a Chinese company spoke before the Commission on Infrastructure Services, vouching for the project’s technical feasibility.53 Because Chinese companies enter major projects abroad in alignment with government strategy, especially with respect to foreign policy, Brazilian companies and politicians have made dedicated efforts to cement ties at the political level before proceeding with more technical collaboration. In 2016, for instance, then-governor of Mato Grosso Pedro Taques traveled to China to sign a memorandum of understanding (MoU), thereby formalizing the partnership with the Chinese government toward the construction of the Center-West Integration Railway, known as Fico. The MoU was also signed by the general director of the China Railway Construction Corporation (CRCC).54 Having learned that the establishment of a Brazil office greatly facilitates communication with Chinese counterparts, the state secretary for infrastructure suggested that to make progress on the project, CCRC set up an office in Cuiabá, capital of Mato Grosso, although this has not materialized so far.55 This type of parallel engagement, with companies shaking hands on the sidelines of meetings between high-level officials, has also become a recurrent practice. In 2016, when then-Brazilian president Dilma Rousseff, Chinese President Xi Jinping, and then-Peruvian president Ollanta Humala signed an MoU for the delivery of a feasibility study of the Bioceanic Railway by China, the Brazilian state company Valec took an active part. In addition to advising the Ministry of External Relations in Brasilia, its representatives took part in preparatory meetings in Brasilia and Lima. Valec technicians also met repeatedly with Chinese counterparts, during meetings organized by the logistics company Logistics and Planning Enterprise (Empresa de Planejamento e Logistica, 53 “Ferrovia Bioceânica é Viável, Dizem Chineses em Audiência Pública,” Senadonoti-

cias, April 18, 2017, https://www12.senado.leg.br/noticias/materias/2017/04/18/fer rovia-bioceanica-e-viavel-dizem-chineses-em-audiencia-publica. 54 “Governo Formaliza aParceria Com a China Para Construção De Ferrovia,” Governo de Mato Grosso, September 15, 2016, http://www.mt.gov.br/-/4963257-governo-for maliza-parceria-com-a-china-para-construcao-de-ferrovia. 55 Ibid.

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EPL). Contact between the Brazilian and Chinese actors was even more sustained when Valec technicians accompanied a delegation of Chinese engineers to explain the Bi-Oceanic Railway, traveling together some 3,500 km from Campinorte, in the Center-West state of Goiás, to Cruzeiro do Sul, in Acre, during a ten-day trip.56 A similar route was taken for the Ferrogrão project. During an official visit to Beijing, Taques met with CCCC directors in Beijing to discuss the Ferrogrão project. He presented data on agricultural production in Mato Grosso and the demand for infrastructure to boost the productive sector and exports. Shortly after the visit, it was announced that CCCC was interested in the Ferrogrão project and that it would participate in the public auction.57 The vice president of the CCCC, Sun Ziyu, stated that expanding investments in Brazil was a priority and announced a forthcoming visit of the company’s directors to Mato Grosso.58 There has also been learning on the Brazilian side in terms of selling the project to potential Chinese investors, even during the coronavirus pandemic. In August 2020, a “road show” was organized by the PPI for actors potentially interested in Ferrogrão. The event was held in an online format and eleven companies participated. These included not only the CCCC and the China Railway Tenth Engineering Group (CREC-10), but also Japan’s Sumitomo, Spanish Acciona and Sacyr, Italian Impregilo, and Brazilian CCR, Ecorodovias, Patria Investimentos, and Hidrovias do Brasil.59

56 Talita Bedinelli, Ferrovia patrocinada pelos chineses ameaça ‘terra intocada’ do Acre, El País, July 31, 2015, https://brasil.elpais.com/brasil/2015/07/30/politica/143826 2981_380956.html. 57 “Ferrograo Pode Ter Periodo De Exclusividade,” SINDIFERRO, accessed 2021, http://www.sindiferro.org.br/ferrograo-pode-ter-periodo-de-exclusividade/. 58 “Grupo Chinês Vai Disputar Licitação Para Construir Ferrogrão, Orçada Em R$ 12 Bi,” RD News, accessed 2021, https://www.rdnews.com.br/economia/grupo-chines-vaidisputar-licitacao-para-construir-ferrograo-orcada-em-r-12-bi/92071. 59 Daniel Rittner, “Governo Põe Até R$ 2,2 Bi Na Ferrogrão Para Reduzir Risco,” Valor, December 8, 2020, https://valor.globo.com/brasil/noticia/2020/12/08/gov erno-poe-ate-r-22-bi-na-ferrograo-para-reduzir-risco.ghtml.

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Conclusion

Chinese railway investors have had to operate within—and adapt to— a highly dynamic Brazilian context in which regulations change and the political scenarios can shift rapidly. The exchanges and the mutual learning between them and their Brazilian interlocutors continue to take place against the backdrop of sharpening debates about the sustainability aspects of grand infrastructure projects. Some of the key institutional learning processes observed include working with or alongside political actors to cement support for the project at the political level; acquisitions or hiring of Brazilian support firms to untangle the complex web of regulations and learn about the Brazilian business culture; the establishment of Chinese country offices to familiarize company representatives within Brazilian; carrying out joint feasibility studies; and participating in controlled public spaces, such as Senate debates. In the case of the Ferrogrão project, which is projected to link Brazil’s top soy-producing region to a port area in the Amazon state of Pará, the demand for infrastructure dovetails with China’s interest in expanding and diversifying its investments in Brazil. However, such a large-scale project also entails multiple risks, from environmental impacts, socioeconomic effects (including the displacement of local communities), and unforeseen economic costs. This means that such Chinese infrastructure investments are increasingly subject to scrutiny by Brazilian civil society, local communities (including indigenous groups and other traditional groups in the Cerrado and Amazon), law enforcement agencies, and political parties. As Chinese investments expand in Brazil, especially in the transportation sector, it will become even more vital for stakeholders to more adequately address its adverse impacts and prioritize projects that promote inclusive and sustainable development. In the case of Brazil, where largescale infrastructure tends to disproportionately affect indigenous and traditional groups, it is essential that such investments follow international law on the right to previous consultation with local communities, as established by the International Labour Organization’s Convention 169. Since most of the major infrastructure projects in Brazil are public concessions and regulated by competitive auctions, Chinese stakeholders must strive to ensure that their rules rigorously incorporate concerns about the environment and social issues, establish clear guidelines to prevent damage, and allocate sufficient resources for dealing with potential need for compensation and reparation measures.

Understanding Chinese Investments in the Brazilian Amazon Region Lívia Machado Costa

1

Introduction

Brazil-China relations have often been oriented by discussions on trade balance, commodities exports, and investments in the Energy sector, the division where most of the Chinese finance traditionally goes in (Cariello, 2021). Not much has been talked about China’s role in environmental cooperation with the South American country and, more specifically, in Brazil’s largest biome and of uttermost importance to planet Earth: The Amazon. Although Chinese investments are primarily concentrated in Brazil’s Southeastern states, financial flows to the Amazon are significant in absolute terms and are diversifying over the years. Such is the case of the infrastructure, mining, and manufacturing sectors. For instance, investments in Infrastructure in the Amazon, mainly in the form of ports and railways, come to address two bottlenecks: First, Brazil has the lowest logistic performance indexes in the world (FGV Transportes, 2020) an area that the Brazilian government is eager to transform through private capital, and Chinese players can provide it in a timely manner (Abdenur

L. M. Costa (B) Department of Geography, University of California, Santa Barbara, CA, USA e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_6

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et al., 2021); second, in order to ensure the fast delivery of commodities, reduced costs and safeguard food security, China also looks at infrastructure as a way to support its agribusiness needs for soybean and beef, ensuring cheaper costs and faster deliveries (Santoro, 2022), creating real ‘Tradescapes’ (Marimón et al., 2021). For this chapter, “Amazon” refers to the Brazilian Legal Amazon, a biome’s socio-geographic division composed of nine Brazilian states.1 The region still has one of the lowest socio-economic development indicators in the country, with generational poverty giving little room to fade away (Leiros, 2021). Although being the home of Brazil’s largest hydropower plants, the region still assembles the most significant number of municipalities with no access to electricity in the country (Albuquerque et al., 2022). These contradictions are just the tip of the iceberg in a region immersed in disputes, in which Indigenous communities, the agribusiness sector, and political groups are in an uneven clash to define what development is. It is under this scenario that this chapter analyzes the role of China in the Amazon, understanding how Chinese capital has worked in the region within the last decade, and how Brazil and global conjunctures have, underneath, interacted with the ever-growing Chinese cash flows. However, before we explore this issue, it is worth asking: Why are we talking about China, and not a different country? On top of China being Brazil’s largest trade partner since 2009 (Hiratuka & Sarti, 2016), the Asian country was the leading buyer of most of Legal Amazon states exports in 2021, accounting for 32.5% of Mato Grosso’s exports, 61.9% for Tocantins, Rondônia with 12.1%, and the state of Pará (18.8%). China was Amapá (18.8%) and Maranhãos’ (21.9%) second-largest trade partner for the same year (Brasil, 2022). Legal Amazon responded for 21.67% of Brazil’s exports in 2021. Nevertheless, more important than seeing the numbers is to scrutinize how the agribusiness complex, the economic powerhouse in the region, interacts with Chinese players, changes in food systems worldwide, land use in Brazil, and the burgeoning concern to reducing greenhouse emissions. On this point, it is indispensable to reflect how the most recent global environmental commitments can influence Brazilian agribusiness in the short and long term. Whereas China’s dual carbon goals—reaching carbon peak emissions before 2030 and carbon neutrality by 2060—are 1 Amazonas, Acre, Roraima, Amapá, Pará, Rondônia, Mato Grosso, Tocantins, and Maranhão states.

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internal targets meaning that they refer to national emissions only, China is looking to have a more leadership and proactive role in the climate environmental agenda worldwide (Wu, 2016); it has demonstrated that by no longer financing coal-powered plants abroad (United Nations, 2022), co-signing the methane declaration with the United States (IEA, 2022); publishing new green guidelines for its Belt and Road Initiative (Nedopil et al., 2022), and launching the Kunming Fund, a 1 billion yuan fund, around 142 million US dollars, destined to biodiversity efforts in developing countries (Costa, 2022a). This chapter is organized as follows: it will first discuss the reasons why China invests in the Amazon, its main challenges and opportunities; followed by an overview of the Chinese investments committed in the region from 2010 to 2020, hoping to evaluate if there is a sectorialpattern, changes, and adjustments throughout time; and a discussion on how Chinese dual-carbon goals and China’s demand for beef and soybeans can influence Brazil’s agribusiness and push for a more sustainable commodity trade between the two countries. The Amazon can assume an important role in Brazil-China relations and foster more cooperation for the climate agenda, scientific, educational a civil society exchanges between Brazilian and Chinese players; and helping unleash the region’s bioeconomy potential. An Amazon-bilateral and regional focused committee, composed by governments, civil society, and Indigenous communities could foster the implementation of existing socio-environmental safeguards specifically designed for the biome, and perhaps create new ones when needed.

2

What Brings China to the Brazilian Amazon?

As Brazil-China relations grew in importance amidst the commodities boom of the first decade of the twenty-first century, attention to the Brazilian Amazon rose. The region is the major producer of soybeans and beef in the country, having seven municipalities in the top ten largest soybean producers in Brazil (Faverin, 2022) and a significant number of bovine herbs (Canal Rural, 2021). These two commodities accounted for 31% and 4.4% of the Brazilian exports to China, respectively, with iron ore (33%), crude oil (16%), and celluloses (3.2%) also in the top five export products (Comexstat, 2021). There are two critical angles in China’s relations with the Brazilian Amazon: food security and sustainability concerns. For the first one, as the

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Chinese middle class increased and its protein consumption rose dramatically in the last few decades (Center for Strategic & International Studies, 2017), and given that China had only 12.7% of arable land2 in 2018 (World Bank, 2018), food security is a matter of national security, social stability, and validation of the Chinese Communist Party (CCP) domestically (Patton & Gu, 2021). Brazil is a trustworthy partner in China’s food security for competitive prices, product quality, and also for having stable diplomatic ties to China, despite Brasilia’s mixed signals during President Bolsonaro’s administration, known for giving troublesome remarks on the Asian country on his presidential campaign (Magalhães, 2018) and during the most pressing times of the COVID-19 pandemic in Brazil (Schuch & Bitencourt, 2021). Diplomatic bilateral ties regained new breath with recently elected President Luiz Inácio Lula da Silva in 2023, now on his third presidential term mandate. The second reason is a sustainability interest, including both environmental considerations and supply chains. Environmentally speaking, growing concerns on climate change and the goal of keeping global temperatures below 1.5 °C pre-industrial levels, as designated by the 2015 Paris Agreement, accelerated ongoing actions and debates over the alarming deforestation rates in the Amazon, which rose 29% in 2021 (Imazon, 2022). Bolsonaro’s administration stance on the biome, characterized by nationalist declarations while dismantling environmental institutions, like Ibama and ICMBio (Pontes, 2020), and support to illegal mining (Costa, 2022b) have shed even more light, internationally, to how the region is being managed. The international scrutiny is also directed to China as it is Brazil’s largest commodities importer with a significant food demand; similar critics have already been made about the Chinese role in certain African countries for its minerals’ demand, and in Southeast Asia, for buying palm oil (Santoro, 2022). This is a problem, since China wants to position itself as a “responsible great power” in the international arena, while a developing country in a different developmental stage. It is possible to notice that by China’s dual-carbon goal of reaching the peak of carbon emissions by 2030, and carbon neutrality by 2060; and its rising leadership role on the climate agenda on multipolar arenas more consistently when Trump rose to power in the United States in 2018 (Hilton, 2016). Therefore, China wants to be far from being

2 12.7% of arable land in comparison to the country’s land area.

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associated with the Amazon deforestation as it was possible to notice with the reaction of the central government to a WWF propaganda that linked China’s beef demands to the biome’s deforestation (Chen, 2020). In regard to supply chain, China is in the Amazon investing in ports, railways, and other infrastructure projects that can support commodities’ overflow to Asia, reduce shipping costs and ensure timely product arrivals (Abdenur et al., 2021). This is particularly important in the context of supply chain disruptions amidst the COVID-19 pandemic, and the war in Ukraine, a large grain producer. Additionally, Brazil’s government actively looks for private investment in the country’s infrastructure sector in the North region with the Arco Norte policy, a major strategy that aims to make Brazilian exports more competitive abroad by improving the logistics costs, cargo and supplies flow with more ports in the North, taking advantage of the innumerous rivers of the region, and ensure an easier connection with the São Luis Port in Maranhão (Brasil, 2016). 2.1

Chinese Investments in the Brazilian Amazon Region (2010–2020)

China conducted several investments in the Legal Amazon region from 2010 to 2020, spread across the Energy, Infrastructure, Manufacturing, Mining, Finance, Technology, Services and Agriculture sectors (BRICS Policy Center, 2022). Around half of these investments are located purely in the Amazon biome, followed by investments that cross both the Amazon and the Cerrado, and a minority in the Amazon and the Atlantic Forest biomes. The reason why this happens is because most of the investments are in transmission lines, hydropower plants and substations, the type of project that often crosses different states, connecting one municipality to another. It was in 2010 that China first invested in the Amazon, inaugurating its presence with Kasinski’s motorcycle plant at the Manaus’ Free Trade Zone. The company, Zongshen Industrial Group, injected US$25.5 million for the greenfield Project (Diário do Nordeste, 2010).The manufacturing sector kept in the front row in 2011, with Midea and Yorkey Optical investing over US$70 million (Springer SA, 2011) and US$15 million (Pioneer, 2011), respectively, in brownfield projects in Manaus’ Free Trade Zone, but was over throned in 2012 with what would be China’s trademark in investments in the country: the Energy sector. On this year, State Grid made its great debut in Brazil by acquiring three

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transmission lines, three substations and assets from the Spanish company Actividades de Construcción y Servicios, in both greenfield and brownfield categories. The public auctions gave her the concession rights, with BNDES loan for some of them, for over US$1.2 billion dollars for all the investments made in that year. All of State Grids’ investments in 2012 crossed both the Amazon and Cerrado biomes, with US$500 million for the Spanish assets, therefore a brownfield investment (Estado, 2012); US$235.49 million for the public auction 7/2012, US$505 million for public auction 2/2012, lot 1, and US$234 million for public auction 2/ 2012, lot 2. In 2013, more investments were made in the biome, more specifically in the Energy sector with the first hydropower plants built by a Chinese company in the country. The Santo Antônio do Jari and Cachoeira Caldeirão hydropower plants represented the first investments by China Three Gorges Brasil (CTG Brasil) in the region, with a US$417 million initial flow to the greenfield project (CTG Brasil, 2022), the first Chinese investment in power generation. In the following year, China innovated by doing its first investment in Agriculture in the Amazon, bringing a major state-owned enterprise (SOE) and one of the world’s biggest soybean trader to the country: COFCO Corporation. The Chinese company acquired 51% of agriculture traders Nidera and Noble Agri for the sum of US$2.8 billion (Thukral & Flaherty, 2013) making it the two biggest international acquisitions made by the company (Fabiana Batista, 2014). The operations include sites in the Amazon and Cerrado biomes and it represents a shift in Brazil-China agribusiness relations (Oliveira, 2016), as COFCO would take the initiative, in July 2020, to track 100% of its soybean imports from Brazil as a way to curb its deforestation links in its supply chains (COFCO International, 2020). The move, however, was met with skepticism by environmental groups due to lack of transparency (Locatelli & Milhorance, 2020). The year of 2014 also registered investments in the Energy sector, with State Grid doing major projects with the 800 kV Xingu transmission line (known as “Linhão”) from the Belo Monte dam, plus two conversion stations (Estreito and Xingu), in a US$646.47 million investment (State Grid, 2022). The 800 kV transmission line connects the Belo Monte hydropower plant, in Pará state, to Rio de Janeiro, crossing the Amazon, Cerrado and the Atlantic Forest biomes, and it is China’s first high voltage transmission line outside of the Asian country.

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State Grid wasn’t alone in the Energy sector in 2014, as CTG Brasil participated with 50% in the construction of the São Manoel hydropower plant, a project valued in US$311 million (São Manoel Energia, 2022) and immersed in socio-environmental impacts, including loss of rivers’ biodiversity, no prior consultation to Indigenous communities and land expropriation (Fearnside, 2019). The last investment in 2014 went to the Manufacturing sector in the Manaus’ Free Trade Zone with Zhejiang Q.J. Motor Co., a motorcycle production plant valued at US$116 million in the order. For 2015, all of the Chinese investments in the region were toward the Energy sector with transmission lines or substations, and all carried out by State Grid in a sum valued over US$3 billion, including the transmission line Xingu—Terminal Rio. In the following year, the Energy sector kept in the front row with three transmission lines crossing the Amazon and Cerrado biomes valued at US$322 million (State Grid, 2019), and one investment in the Manufacturing sector with the joint venture SEMP TCL, a US$60 million brownfield investment in Manaus’ Free Trade Zone (Brigatto, 2020). For 2017, only one investment was directed to the Amazon, but of uttermost importance: The São Luís Port by the China Communications Construction Company (CCCC) with an initial greenfield investment of US$357 million (Pires, 2018). Shipments departing from the port could reach China much faster, reducing the costs and time of the soybean supply chain (Bourscheit, 2019b), but socioenvironmental impacts amount, including lack of consultation, crossing indigenous and quilombolas lands, and deforestation (Bourscheit, 2019a). In 2018, only one Chinese cash flow was made in the Amazon region, with the GREE Electric Appliances building an air conditioner production plant at the Manaus’ Free Trade Zone (Santos, 2018). No investments were identified in 2019. In 2020, however, two Chinese companies were active in the region: BYD, the electric car company opened a lithium iron phosphate battery factory in Manaus’ Free Trade Zone with an initial investment of US$2.7 million (BYD, 2020); and China Railway Group Ltd and China Communications Construction Company (CCCC). They entered a consortium with Bahia Mineração (BAMIN) to build Porto Sul Port, a project that promises to cut export logistical costs. The megaproject is valued in US$580 million and has provoked protests do its environmental impacts (Uchôa, 2020). The investments described are by no means an exhaustive list,

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nevertheless serve to underscore the changes in profile of Chinese investments in the Amazon, meanwhile their main focus.

3 China’s Climate Goals, the Amazon, and Development China’s dual-carbon goals, the significant investment on renewable energy, and its role in the global climate agenda have put the Asian country at the forefront of the ecological paradigm shift necessary to revert the intensification of climate change effects. At the same time, China’s carbon footprint as the world’s largest carbon emitter (Statista, 2022) has directed intense criticism to the Asian country, shedding light to its potential role on deforestation in sensitive biomes worldwide, like the Africa’s Savannahs, the humid forests of Indonesia where most of the country’s palm oil come from, and more recently the Chinese demand for beef and soybean in Brazil and its link with the Amazon deforestation (Warmerdam & Picken, 2021). In response to that, Chinese companies, development banks, and the Chinese central government have established a number of guidelines to mitigate the socio-economic impacts of its operations abroad, the first one being made by the State Council with the “Nine Principles on Encouraging and Standardizing Outward Investment”, issued on October 2006 (State Council, 2006). The guideline laid down the need to respect and follow local regulations and protect the hosts’ country environment. It also specified the need to preserve the “good image and corporate reputation” of China abroad. In the following year, it was the time of the Exports and Imports Bank of China (China Eximbank) to issue instructions with the “Guidelines for Environmental and Social Impact Assessments of the China Export and Import Bank’s (China EXIM Bank) Loan Projects” preconceived the need to assess environmental impact studies as one of the conditions for loan concessions, the guideline also stipulated the need to respect the right to land of local communities and left the possibility of canceling a loan if socio-environmental damages are not addressed International Institute for Sustainable Development (2013). These two guidelines came in the context of growing Chinese investments in African countries and impacts of Chinese investments abroad. It would take six years for a Chinese central agency to issue a new environmental guideline. In 2013, the Ministry of Commerce (MOFCOM)

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and the Ministry of Environmental Protection (MEP) issued a joint guideline on “Environmental Protection in Foreign Investment and Cooperation” mentioning that companies should respect emission targets and protect the hosts’ country biodiversity (Ministry of Commerce People’s Republic of China, 2013). In 2016, it was the time for new guidelines, however, now to the financial system. The “Guidelines for establishing the green financial system”, provides credit incentives for companies that respect the environment and mentions penalties for those who falsify environmental information. The following year had the highest number of guidelines issued: one by the Chinese Development Bank, the “Green Bond Framework”, calling for more transparency on sustainability benchmarks and incentives for projects focused on solar and wind energies and hydric resources’ management (China Development Bank, 2017); another one by the Ministry of Ecology and the Environment, reinforcing the principle of following the hosts’ country environmental laws and international standards; a third one by the State-owned Asset Supervision & Administration Commission of the State Council (SASAC) explicitly focusing on state-owned companies and their need to protect the environment; it also calls for a reduction of carbon emissions and to respect the law and cultural practices of host countries; and lastly, another one from the State Council, further regulating overseas investments brought up by previous guidelines. One of the latest guidelines published was in 2021, a joint publication by MEE with MOFCOM mainly focusing on projects under the scope of the Belt and Road Initiative. It specified good practices and socio-environmental standards and, differently from previous publications, it suggests that Chinese companies should follow international environmental benchmarks instead of the host countries. The abovementioned guidelines are not exhaustive. The purpose is to highlight how different state agencies and development banks in China deal with growing concerns about their operations abroad. None of the guidelines have binding power, meaning they do not have the weight of law and cannot punish Chinese companies. Additionally, none of them are biome or country-specific; thus, the Amazon is not explicitly mentioned. However, that does not mean that China is unaware of how important the region is to climate change and its image in Brazil, looking for legal guidance to navigate the country’s bureaucracy and adapt its operations to Brazil’s legal and environmental frameworks (Abdenur et al., 2021).

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More recently, new players are emerging in the Brazil-China agribusiness relations, as is the case of Chinese civil society organizations. In March 2022, the Global Environment Institute (GEI), a Beijing-based non-profit organization, signed a Memorandum of Understanding with Brazil’s Mato Grosso state for more cooperation on the sustainability of the soybean supply chain. The MoU includes the Federation of Agriculture and Livestock of Mato Grosso, traders, a chamber of commerce for farmers’ unions, among other players. One of the MoU’s goals is to create a roadmap for environmental-friendly beef in Mato Grosso, including certification systems, and emit net-zero carbon in the production (Baxter, 2022). Internationally, China may foster green finance to the region as the world’s second-largest green bond issuer (Costa, 2022b) and willingness to pose itself as a “responsible power” in the climate arena (Kaneti, 2021). Moreover, China gave its first step in potential finance to the region by launching a biodiversity-focused fund exclusively for developing countries amidst the Biodiversity Conference of COP15 held virtually in Kunming, China, in 2021. The growing concerns about curbing deforestation in the Amazon shed light on the agribusiness expansion into the region, led by soybean and beef demand worldwide. Since the Asian country is Brazil’s largest importer of these commodities, the Central government is aware of how this narrative can influence its image abroad. Nonetheless, is unlikely that China would take the European Union strategy of pushing for more burdensome regulations to stop deforestation-links in commodities supply chains or implement penalties for slaughterhouses linked with habitat degradation. One of the reasons is the foreign principle of nonintervention, meaning that China will not interfere in how Brazil protects the Amazon or implement environmental laws, nor will it support the stance that the biome should be internationally managed, as could be seen as a threat to Brazil’s sovereignty over the region. The Chinese way to foster sustainable practices in the region, both with its greenfield and brownfield investments and its role in the commodities supply chain, is through diplomatic and scientific cooperation and enhancing adaptability in Chinese investments in Brazil, improving communication exchange between Chinese and Brazilian stakeholders, as clearly seen in the BrazilChina Joint Statement on combating climate change, released on the event of President Lula’s visit to Beijing on April, 2023 (Brasil, 2023). Additionally, it is unlikely that China would make severe shifts that may hinder its food security, as it could be the case of deforestation-linked

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sanctions for soybeans and beef imports (Costa, 2022b). Food security, like Energy security, is one of the main concerns of the CCP to guarantee social stability and national self-sufficiency (Mukhopadhyay et al., 2018), and as much Brazil is not China’s only option for commodities imports, it is still one if its main providers for the foreseeable future, as the Asian country’s soybean production is still not enough for domestic demand (Nepstad, 2021).

4

Conclusion

Just like it is hardly possible to reflect on the world today without China, the Amazon takes the headlines, but for different reasons. The biome is home to one of the world’s most biodiverse hotspots, and it is crucial to the world’s temperature, but faces an unprecedent habitat degradation. The agribusiness frontier poses a risk to the biome and the survival of Indigenous communities. Despite that, Brazil disregarded its environmental agenda during Bolsonaro’s administration (2019-2022), a mandate that revived the old narrative, from the military dictatorship period (1964–1985), that environmental protection was incompatible with economic development. Brazil’s domestic issues are the main reason why the biome is more exposed to deforestation now than it was in 10 years. Furthermore, more than focusing on an impactcentered research and narrative, the question of Chinese investments in the Brazilian Amazon Region must be evaluated through a critical, relational lens, one that recognizes its specificities and sees what Gustavo Oliveira calls the ‘refraction’ of these investments throughout Brazil’s political system (2022). As much as the global demand for soybeans and beef influences the expansion of the “arc of deforestation”, China’s demand for soft commodities can make a difference in fostering higher environmental standards in the supply chain if appropriate policies and enforcement take place. All that brings us to question whether these two important players, China and the Amazon, can work together and advance a resilient and fair sustainable development. How can disputed developmental conceptions between the agribusiness sector, regional governments, Indigenous communities, and China’s interest coexist? There is no easy answer for that, starting from Brazil’s own internal reasons that go from an institutional dismantling, cutting investments for environmental agencies, and discouraging legal actions against land grabbers. Brazil needs to address

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these issues if it wants to take a more prominent and leading role in the world’s climate arena. Brazilian laws are robust to protect the environment and local communities but fail in the implementation phase. Meanwhile, China is strengthening internal guidelines as displayed in its 14th Five-Year Plan released in 2021, which includes expanding forest coverage, reducing coal-powered participation, reducing emissions, and increasing renewable energy participation in the energy mix. Externally, it has declared that it would stop investing in coal-powered plants abroad and is facilitating conversations on climate even more since the United States took a step back in environmental talks during Donald Trump’s administration. Furthermore, there has been a rise in criticism toward the Asian country on the socio-environmental impacts of its investments abroad. China’s reaction has been toward more guidelines and strengthening the following of international environmental benchmarks by its companies abroad, but there is no guideline explicitly made to a biome. More than forcing laws or standards, China is choosing the cooperation pathway instead and looking forward to working with regional and national governments. Nonetheless, that does not mean that Chinese companies are not involved with socio-environmental violations. Brazil and China should enhance environmental cooperation and make it a transversal aspect of trade relations. Specific policies to investments in the Amazon can be drafted by Chinese agencies with the exchange with Brazilian counterparts, giving a step further in the international flow that goes to the region, especially for the Energy, Mining, and Infrastructure sectors. The cooperation should be carried out with Brazil’s national government and involve the Legal Amazon states and civil society. Moreover, it could work with other Amazon countries and foster regional guidelines for the biome, taking as an example the Soy Moratorium and giving a step further in traceability with Chinese stakeholders. This regional effort reinforces an international call for action for sustainable finance in the region, while being an opportunity to promote more protagonism of Global South countries in the environmental agenda worldwide. Beyond that, China’s expertise with solar, wind, and green hydrogenpowered energy sources can facilitate Brazil’s energy transition and access to electricity to several municipalities in the Brazilian Amazon Region. An Amazon Committee with Brazilian and Chinese parts may elaborate guidelines for more sustainable trade and diversify export products, especially in Pará, the state with the highest deforestation rates in the

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Brazilian Amazon region (MapBiomas, 2022) while with a great potential for bioeconomy. An “Amazon Committee” could be under the umbrella of the newly discussed Subcommittee on Environment and Climate Change, subordinated to the China-Brazil High-level Coordination and Cooperation Committee. This instrument could also be a platform for Chinese and Brazilian civil societies, including Indigenous communities, think tanks, and non-profit organizations. One of the outcomes of this Committee would be the capacity to influence decision-making and promote more sustainable Chinese investments in the region, as the country has a significant investment power and role in the international order and climate agenda.

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The Sino-Brazilian Relations in Debate: A Perspective from the Energy Sector João Cumarú

1

Brazil-China Cooperation

The strategic partnership between Brazil and China has been under construction for several decades. Both countries share the identity of major developing states and acknowledge the importance of developing long-standing, stable, and strategic bilateral relationships (Nascimento et al., 2021). In 2009, China surpassed the US and the EU, becoming Brazil’s largest trade partner and has remained in this position since then. Brazil has been on China’s Top 10 partner list for years and is one of the key destinations of Chinese foreign direct investment (FDI). Between 1990 and 2018, 75 international acts and agreements were

To Professor Marcos Costa Lima (in memorian) J. Cumarú (B) Fudan University, Shanghai, China e-mail: [email protected] Federal University of Pernambuco, Recife, Brazil © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_7

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signed between Brazil and China on energy resources1 (Montenegro et al., 2020; Teixeira & Rossi, 2021). The occurrence of commercial cooperation agreements between Brazil and China intensified as of 2007. In the period between 2007 and 2020, Chinese companies invested US$ 66 billion in Latin America. Brazil was the destination of 47% of Chinese investments and the main sectors benefited by these were electricity (48%) and oil and gas extraction (28%) (Baumann et al., 2021). In addition to the fast-growing commercial ties that have marked the China-Brazil partnership, China has also played a substantial role in supplying loans and investment to Brazil for over a decade. Chinese policy banks have provided over $28 billion in loans to Brazil since 2007, making it the second largest borrower in Latin America. Remarkably, roughly 90% of this sum was directed at the energy sector, according to data from China Global Investment Tracker. In the context of South-South Cooperation (SSC) and the ambitious Belt and Road Initiative (BRI), it is clearly demonstrated that China’s involvement in Brazil’s energy market will be toward a broader and more strategic engagement (Barbosa, 2021a; Zhang, 2019). Brazil occupies a relevant place in the milestones of Chinese geostrategy aimed at ensuring strategic resources amid the competitive logic intrinsic to the international system (Baumann et al., 2021). Undoubtedly, the energy sector is pivotal for us to understand how China has been changing Brazil. Therefore, it is important to understand the scenario of Chinese investments in energy in Brazil, the challenges, potential, and determinants of this cooperation. Despite recent tensions in the strategic partnership, the government taking over in 2023 will certainly continue to have China as a key partner in Brazilian foreign policy. This article draws a general picture of the investment between China and Brazil in the energy sector. The chapter does not intend to end the debate, but to bring some reflections that may help us think about which

1 The Brazil-China energy dialogue takes place within the scope of COSBAN (High-

Level Sino-Brazilian Commission for Dialogue and Cooperation) and with Brazilian regulatory institutions, guided by interests in investments, privatizations, and technological innovations. This cooperation advanced, particularly, under the Itamar Franco (1992– 1995) and Lula da Silva (2003–2010) governments, involving efforts in the areas of non-renewable and renewable energies, including biofuels (Teixeira & Rossi, 2021).

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paths Brazil should follow in this relationship. Therefore, and in addition to this introduction, the chapter is divided into three other sections. Below I present the main figures that characterize China’s insertion in the Brazilian energy market, with a focus on the generation, transmission, and distribution sectors. In the third part, the potentials and challenges of Sino-Brazilian energy cooperation are discussed. And in the last section, final considerations will be made about the trends that Sino-Brazilian strategic cooperation should take from 2023 onward, especially in the energy arena.

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The Energy Sector in Evidence 2.1

Latin America

At the regional level, China is one of Latin America and the Caribbean’s (LAC) main trading partners and it has also been gaining prominence as an investor (Ding et al., 2021). During the 12th FYP (Five Year Plan) (2015–2019), President Xi Jinping set ambitious goals for its investments in LAC, including $250 billion in direct investment (Dollar, 2017). In December 2021, China sought to deepen this cooperation by strengthening ties between corporations, sovereign governments, and financial institutions with the 33 countries that participated in the China-CELAC Summit (Hussain, 2022). In 2020, Chinese OFDI in Latin America amounted to roughly $17 billion, mostly in South America (Roy, 2022). Meanwhile, the stateowned China Development Bank and the Export–Import Bank of China are among the region’s leading lenders, and they supported mostly large-scale energy and transport infrastructure projects put forth by governments or companies in Argentina, Brazil, Ecuador, and Venezuela (Myers & Ray, 2022). From 2005 to 2021, China’s investments in LAC amounted to $140 billion, with Brazil accounting for $64 billion and Peru $25 billion (Ding et al., 2021; ECLAC, 2021). During this period, three sectors accounted for the highest sums put on mergers and acquisitions: electricity, gas, and water companies (generation, distribution, and integrated companies), oil and gas, and mining (Ding et al., 2021). Energy projects accounted for 59% of investments; metals/mining accounted for 24%. China’s construction projects in LAC from 2005 to 2021 were valued at $66 billion, with energy projects accounting for 51% and transportation accounting for 29%, according

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to China’s Global Tracker Investment. Renewable energy projects gained prominence in 2015 (Ding et al., 2021). Since then, most investments have focused on solar energy, 57%, (whose market is mostly dominated by China), followed by hydroelectric power plant projects (29%) (ibid.). According to the Ding et al. (2021): The largest project was that of Hydro Global Peru, a company formed by China Three Gorges Corporation and Portugal’s EDP Energias, which obtained a 30-year concession to build the San Gaban III Hydroelectric Power Plant. This project, valued at US$ 438 million, was financed by the China Development Bank. […]. In the area of solar energy, Chinese companies won some tenders to build solar parks and there were other projects for the establishment of subsidiaries. Jinko Solar, for example, is one of the region’s main suppliers of photovoltaic panels and has subsidiaries in Brazil, Chile, and Mexico.

In the Latin-American market, electricity generation assets have attracted billions of US dollars of Chinese investment, particularly in the Brazilian hydroelectric sector (Li et al., 2020). Brazil is also an important producer of oil, hydrocarbons, and other energy resources, hence capturing a large percentage of investments related to this sector. Based on that, it is important to have a brief look into what are the characteristics of Chinese FDI in the energy sector in Brazil. Which companies led the main investment projects carried out in the country? In what sectors? And what is the regional allocation of these investments? These variables will be analyzed in the next section. 2.2

An Overview of the Sino-Brazilian Cooperation in the Energy Sector

Over the past decade, the relationship between China and Brazil in the energy sector intensified. E.g.: between 2005 and 2015 this sector absorbed USD 27.850 billion in investments from China, a major part directed to the fossil fuel and power transmission sectors2 (Cavalcante, 2 Due to the limited scope of this article, it will not be possible to analyze in detail all the variables related to the topic (power generation installed capacity, kilometers of transmission lines, and number of consumers in Brazil, their evolution over time, their percentage of the whole local system, etc.). For an in-depth analysis of the main variables relevant to the topic, see Barbosa (2020, 2021a).

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2018). China’s entry into the Brazilian electricity sector more effectively occurs after the discovery of offshore oil reserves in the Campos Basin (Rio de Janeiro) between 2007 and 2009, the so-called Pre-Salt Layer (Barbosa, 2021b; Cavalcante, 2018). It is important to highlight that this participation happens through investments, construction projects and loans (Barbosa, 2020). The first major financial investment by Chinese companies in the Brazilian electricity sector took place in 2009, when the China Development Bank (CDB) made bilateral loans of USD 10 billion to Petrobras3 for 10 years to finance Petrobras’ investment plan, including goods and services bought from China (Cavalcante, 2018). Regarding the transmission sector, the State Grid Corporation of China (State Grid) was responsible for the large initial investment, from the acquisition of seven Brazilian companies, thus providing potential for operational learning and technology transfer in Brazil’s energy sector (ibid.). Sinochen acquired 40% of the Peregrino oil reservoir in the Campos Basin. More recently, CNPC and CNOOC took strong positions in offshore oil exploration in one of the last auctions that took place in November 2019 (Nascimento et al., 2021). Beyond the oil and gas sector (O&G) and transmission, Chinese energy corporations showed a growing interest in renewable energies (Barbosa, 2021a; Cavalcante, 2018). As can be seen in Fig. 1, the focus of Chinese investment has been on hydro (71%) and wind (17%) power plants, in 2019, with 11,798 MW and 2888 MW of power generation, respectively. The other sources are biomass, solar, oil, and coal comprised 5% (759 MW), 4% (680 MW), 3% (532 MW), and almost 1% (79 MW), respectively (Barbosa, 2020, 2021a). The energy market in Brazil is shared by some of the main Chinese companies, especially companies in the clean energy sector. In addition to the companies that have already been mentioned (State Grid, CNPC, Sinopec, Sinochen, CNOOC), Table 1 indicates that some companies have interests in different segments and sources of energy, among generation, transmission, and distribution (Barbosa, 2020; Nascimento et al., 2021). 3 Largest oil exploration and production company in the country and one of the largest in the world. Petrobras is a mixed capital company, whose majority shareholder is the Government of Brazil, and operates mainly in the exploration and production of oil and its derivatives and natural gas.

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Fig. 1 Chinese companies’ installed capacity per source of energy (GW, 2019) (Source Barbosa, 2021a)

Table 1

Chinese electricity firms in Brazil

Generation State Grid CLAI Fund SPIC

CTG/EDP

CGN

China-Portuguese Zhejiang Speaking Countries Fund Energy CITIC CLAC Fund Canadian COFCO Jiangsu Solar CCETC

Transmission

Distribution

CEE Power

State Grid

Zhejiang Insigma United Engineering State Grid CTG/EDP CTG/EDP

Source Barbosa (2021a)

In addition to Chinese companies, the Brazilian energy market also receives investment from other countries, such as the Italian Enel™, the Spanish Solatio and Elecnor™, the EDP Renováveis™ (Nascimento et al., 2021). Even so, the largest share of the market is owned by Brazilian companies, but Chinese companies own roughly 10% of Brazil’s generation segment, 12% of transmission, and 12% of the distribution (Barbosa, 2020). In terms of energy investment sectors (Fig. 2), Chinese firms concentrated 81% of investment in power generation projects. Despite this preference, transmission deals amounted to US$6.3 billion or 17% of the

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Fig. 2 Chinese FDI/ construction projects per sector (US$ billion) (Source Barbosa, 2021a)

total, while manufacturing projects were of US$235 million, 1% of the total (Barbosa, 2020, 2021a). As for the manufacture sector, the expansion of the Brazilian photovoltaic park takes place through the import of solar panels from Asia, mainly from China, Vietnam, and Malaysia. Estimates indicate a share of imported solar modules exceeding 95% of demand. The remaining 5% of the modules are assembled in Brazil, using imported silica cells. In the first quarter of 2022, solar panel imports totaled US$ 1.4 billion, a total 193% higher than the same period of the previous year. In 2021, imports totaled $2 billion (Valor Econômico, 2022). Most of the photovoltaic panels are imported from companies such as Chinese companies Jinko™, BYD™, JA Solar™, Trina™, and Canadian Solar™, revealing the importance of China in its value chain (Nascimento et al., 2021). Among these, the main Chinese company in the manufacturing sector operating in Brazil is BYD. According to Nascimento et al. (2021: 383): Among those companies that are already installed in Brazil, Build Your Dream (BYD), arrived in 2014, when it established a Research and Development unit in Campinas (São Paulo) - that still headquarters the company nowadays. In 2016, BYD inaugurated a chassis assembly line for electric buses and assembly of rechargeable batteries and, the following year, a

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photovoltaic solar panel factory. This infrastructure enabled the partnerships with the government that came in the following years. Despite not being the largest market share occupied by the company, the production of photovoltaic solar panels received an initial investment of USD 29.2 million, through a financing line from the National Bank for Economic and Social Development (BNDES). Looking at the company’s performance in renewable energy projects, BYD was responsible for 1 GW of solar panels delivered in Brazil until mid-2019 […].

Between 2005 and 2019, Chinese companies mostly resorted to mergers and acquisitions (M&A), accounting for 76%, and greenfield foreign direct investments (GFDI), with 20% of the total (Barbosa, 2020, 2021a, 2021b). 2.3

Regional Division of Investments

A look at the regional division of these investments points to a concentration of projects in the Southeast region (66%), since the subnational state of Sao Paulo (SP) was the major destination of funds, as we can see in Fig. 3. The Southeast region concentrates 28% of the national installed capacity and has the greatest number of consumers (28 million in 2018) and 52% of the country’s GDP; it is a natural investment choice for any investor (Barbosa, 2021a).

Fig. 3 Chinese FDI/construction projects per state (2005–2019) (Source Barbosa, 2021a

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The Northeast came in second with 11% (ibid.). Despite still receiving a small share of investments, the Northeast Region is the region with the greatest potential for wind power generation in the country with 91.5% of installed capacity, equivalent to 25.6 GW, and energy from photovoltaic panels with 56% of generation in the country, or 7.53 GW (Nascimento et al., 2020). The potential of wind and solar generation attracted increasing investments in the last few years, not only from Chinese investors. The third place is occupied by the Central-West with 10%, with emphasis on transmission line projects. This region is crossed by two of the longest tension lines built in Brazil recently: the Belo Monte dam ultra-high- tension lines, with more than 4.6 thousand kilometers. Besides these two lines, State Grid has other transmission projects there (Barbosa, 2021a). Finally, the last two regions, the South, and the North, have 7% and 6%, respectively. As seen in Fig. 1, Chinese companies have so far adopted a predominantly renewable energy investment pattern. The literature points out that Chinese players focus their energy investments where the host country has a natural advantage or an abundance of resources (Barbosa, 2021a; Baumann et al., 2021). In the case of the Northeast region of Brazil, which has great potential for solar and wind generation, the Chinese presence is concentrated in the companies CGN, CTG, SPIC, Atlantic Energias Renováveis, and Canadian Solar (Barbosa, 2021a; Nascimento et al., 2021). Table 2 summarizes some of the main Chinese companies that have been operating in the renewables sector in Brazil, especially in the Northeast. When we reach this point, it is worth asking the question: what are the incentives for Chinese companies to enter the Brazilian market? What factors determine Chinese FDI in this context? The literature on the Chinese presence in the Brazilian electricity sector has tried to discuss different aspects of this relationship.4 Concomitant factors help to understand the exponential increase in Chinese investments in the Brazilian electricity sector: (i) implementation of China’s Going Global Strategy;

4 In the Brazilian case, specifically in the electricity sector, object of analysis of this article, some studies have already been carried out to analyze Chinese investments that have taken place since 2010: Husar and Best (2013), Becard and Macedo (2014), Cote (2014), Oliveira (2016), Schutte and Debone (2017), Tang (2017), Silveira (2018), Da Silva (2019), Montenegro et al. (2020), Barbosa (2020, 2021a, 2021b).

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Table 2

Description of Chinese companies and their assets in Brazil

Company

Description

State Power Investment Corporation (SPIC) Brasil

SPIC Brasil operates the São Simão Hydroelectric Power Plant, two wind farms and is a shareholder in the GNA1 thermoelectric plant, totaling more than 3 GW of installed power in the country. The two wind farms (Vale dos Ventos and Millenium) are in the Paraíba municipality of Mataraca and together they consist of 73 wind turbines Created in 2013, is a subsidiary of China Three Gorges Corporation (CTG), a world leader in hydroelectric energy production, with investments also in wind and solar energy. In Brazil, the company has 11 wind farms in operation located in the states of Rio Grande do Norte, Rio Grande do Sul and Santa Catarina, with a total installed capacity of 328 MW. CTG Brasil also operates in 17 hydroelectric plants, responsible for generating 8 GW of energy for the country. In 2016, the company became the second largest generator of clean energy in the country, with private capital By 2019, the company acquired three projects for photovoltaic solar plants, totaling 393.7 MW. One of the photovoltaic projects is in Pernambuco (190.5 MW), another in Ceará (76.2 MW), and the third 127 MW project, in the state of Minas Gerais, scheduled to start commercial operation before January 2023. Recent energy auctions have made Canadian Solar responsible for approximately 1.6 GW of contracted capacity since it started participating in the Brazilian market CGN Brasil Energia e Participações S.A. is a multinational energy company affiliated with CGN Energy International Holdings Co.Limited. The operation in Brazil started in 2019 after the acquisition of wind energy projects from Atlantic Energias Renováveis, in addition to two more solar parks and one wind farm, reaching an installed capacity of more than 1,1 GW. There are currently six wind energy projects in operation, 02 in Rio Grande do Norte, 02 in Bahia, 01 in Rio Grande do Sul and 01 in Piauí. In solar energy generation, there are two projects in operation in Ribeira do Piauí (Piauí) and Bom Jesus da Lapa (Bahia)

CTG Brasil

Canadian Solar

CGN Energy International

(continued)

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Table 2

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(continued)

Company

Description

Atlantic Energias Renováveis

The company plans to invest more than R$ 1 billion in the expansion of the Lagoa do Barro Wind Complex, in operation in Piauí, and in the construction of nine projects won by the company in the 2019 auction of Agência Nacional de Energia Elétrica (ANEEL). In the same auction, the company won the bid for generation of 218.5 MW in 07 winds farms in Bahia, and 02 in the state of Piauí

Source Author’s elaboration based on Nascimento et al. (2021) and official websites of these companies

(ii) Brazil’s rich natural and energy endowment; (iii) favorable market conditions; (iv) the relative saturation of the Chinese domestic market for big-scale infrastructure projects, business opportunities brought by the country’s economic crisis and corruption scandals since 2014; and (v) governmental incentives, such as a stable regulatory frame in the energy sector, are among the main motives (Barbosa, 2020, 2021a; Teixeira & Rossi, 2020). Given this scenario, it is essential to discuss the potential and challenges of this relationship in the energy field.

3 Comments on the Challenges and Potentialities of the Sector for Sino-Brazilian Cooperation As can be seen in the numbers presented above, the energy sector is strategic for ‘Sino-Brazilian relations’. In times of global climate crisis, Brazil finds itself in a point of advantage on the debate about energy transition given its abundant supply of renewable natural resources. In addition, the energy matrix already has a high share of renewable sources,5 which determines a low impact energy profile (Teixeira & Rossi,

5 According to the Energy Research Company (EPE, in Portuguese), 48.4% of the Brazilian energy matrix comes from renewable sources, much more than the 13.8% of the world average and the 11% of the richest countries, gathered in the OECD (O Globo, 2022).

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2020). On the path of the energy transition, Brazil has challenges, in addition to possibilities, which have not yet been explored, due to its abundance of natural resources. It is necessary to advance in regulatory, economic, financial, and technical changes so that it can further leverage the low-carbon bias in the country’s energy matrix (Teixeira & Rossi, 2020; Barbosa, 2020; CEBC, 2021). It is important to highlight that, associated with the quick development of renewable energy technologies in the global market, Brazil has advanced in the last decade in the expansion of the generation sector mainly by wind and solar sources and in the regulation of these sectors; the country has been widely impacted in its integration process to this market (Nascimento et al., 2021). The financial viability and the expansion in the adoption of these technologies were factors that facilitated the development of this market in Brazil (Cavalcante, 2018). The Brazilian renewable sector fits the demands of the global renewable energy market due to the underdeveloped national sector and the need to import most of the technology (ibid.). This leads us to discuss Brazil’s national strategy for the energy sector and what are the potentials and challenges of this sector in strategic cooperation with China. The Brazilian water crisis faced in 2021 put pressure on the national electricity system, bringing threats to the energy supply capacity in different regions of the country. The resumption of production and the post-COVID- 19 economic recovery have also increased energy demand. However, the policies adopted by the federal government have been shown to be wrong, as coal-fired thermoelectric plants have become a priority within the country’s energy planning. At the end of 2021, the Brazilian government continued to encourage the use of coal, the most polluting fossil fuel6 (Filho, 2021). In recent years, federal government initiatives have resulted in incentives for thermoelectric plants (coal and nuclear), reduced funding for research and development in energy efficiency, withdrawal of subsidies for solar generation, and the subversion of the concept of a fair energy transition by guaranteeing contracting coal energy by 2040 (Observatório do Clima, 2022).

6 Contrary to the global trend, the government launched in August 2021 a program to strengthen coal mining. The plan aims to raise US$4 billion to revitalize coal-fired electricity production in the South region, which has the largest coal reserves in the country.

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Meanwhile, China has made efforts in the strategic planning of the energy sector, becoming a global leader in the development of technologies related to energy transition and climate change, such as electric vehicles, solar panels, and wind turbines7 (Barbosa, 2020; Teixeira & Rossi, 2020). Despite their still high dependence on coal, the Chinese build their energy planning based on guidelines that include technological innovation, energy security strategy and the establishment of a modern, low-carbon, and high-efficiency energy system (Teixeira & Rossi, 2020). The transformations that China has been implementing in its territory, whose focus is on sustainability and the search for technological selfsufficiency, require the updating of the strategic vision of the Brazil-China relationship. It is important to keep in mind that it will not be China or any other country that will carry out the Brazilian energy transition from the outside to the inside. Brazil needs a national energy project, with well-defined vision and strategies. China can offer expertise, infrastructure, technology, the ability to transfer or even absorb and share knowledge, and large lines of financing (Baumann et al., 2021). However, all these resources offered will not be fully used if there is no strategic political coordination which would result in greater gains for Brazil. Chinese companies position themselves as global leaders in the development of technologies related to energy transition and climate change (such as electric vehicles, solar panels, and wind turbines). In this sense and based on Barbosa (2020); Teixeira and Rossi (2020) and CEBC (2021), I indicate below some guidelines, paths, and policy suggestions to be considered from 2023 onward that could lead to the improvement of the Brazilian energy sector and attract more foreign investment, especially those from China, thus strengthening the bilateral relationship. One of the first initiatives should be building an agreement on the energy transition strategy and the vision of energy transformation in Brazil (focusing on access, efficiency, and quality in the use of energy) reconciling national interests with common global interests, as in the case of facing climate change and the necessary reduction of GHG emissions. It is important to increase sectoral planning with predictable investments in 7 In April 2022, the Chinese Academy of Engineering published a new study in which it estimated that China could reach its peak of carbon dioxide emissions by 2027. This would corroborate the goal, announced by President Xi Jinping in September 2020, of reaching the peak emissions before 2030, and carbon neutrality by 2060.

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the oil and natural gas (exploration) sectors, as well as electric energy in generation (onshore and offshore wind, solar, biomass, green hydrogen, and oil & gas) and transmission. The energy auctions carried out by ANEEL, over the last decade reveal the attractiveness of the Brazilian market. In addition, it is essential to develop new regulatory and business environments, focusing on wind, solar and green hydrogen sources, and expand incentives for self-generation of energy (so-called distributed generation or decentralized energy systems) that incorporate renewable sources and smart grids. It is also required to create incentives and generate investments in innovations, products, and services that change the dynamics of the energy generation and transmission chain, with an emphasis on sustainable and low-carbon alternatives. These incentives must include the issue of how to add value in the production chains of these energy sources. It is important to think about stimulating production chains for the purpose of manufacturing components and finished products for the generation of alternative sources of energy, with fiscal policies that make the acquisition of goods produced in Brazil more advantageous, compared to imported goods. Today, the Brazilian tax structure makes it more attractive to import solar energy generation equipment from China than to manufacture it in Brazil. In this sense, another necessary initiative is to encourage direct investment, cooperation, and possible technology transfer by China for the expansion of Brazilian production chains of equipment for solar, wind, and bioenergy projects. In addition to investments, we must also encourage the research and development of wind, solar, and bioenergy products, solutions, and technology, through bilateral cooperation agreements and with the participation of Brazilian and Chinese universities, to ensure a scenario of innovation and specialized human capital. Strengthen technological cooperation and sharing of experiences that allow Brazil to learn about and reflect on China’s success stories in relation to its performance in the fields of generation and distribution of solar and wind energy, as well as in the development of technologies and production chains of products. This is directly linked to the promotion of cooperation between Brazilian and Chinese companies for the transfer of technology and cooperation in projects related to the development, implementation, generation, and transmission of solar, wind, bioenergy, and green hydrogen energy.

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In addition to Chinese investments in new power generation plants in Brazil, this expertise that China has built in recent decades may allow Brazil to explore different economic, technological, and environmentally sustainable routes in the construction of its energy transition (Teixeira & R2021ossi, 2020). Commercial gains may be added to the promotion and advancement of investments in green technology in the sector (CEBC, ). The energy transition process associated in cooperation with China (also other countries) needs to be thought of considering different axes, such as access, efficiency, and quality in energy use in Brazil; the exchange of technologies for the development of renewable energies; energy security with decentralization of energy systems and diversification of sources; and the neutralization and decarbonization of the energy matrix (Teixeira & Rossi, 2020).

4

Final Comments

How is China changing Brazil? Traditional Chinese thought holds that human development and nature go hand in hand, forming a single thing (the idea of harmony, 和谐). The concern with sustainable development has been present in Chinese philosophy for a long time. In this sense, Sino-Brazilian energy cooperation has been helping Brazil to face the global climate crisis, since investments in low-carbon technologies create job opportunities, increasing competitiveness, and building a healthy economy that is more resilient to impacts such as those resulting from pandemics and climate change. It must also be understood that these investments need to be part of a broader transition to a more inclusive and sustainable growth trajectory. It is undeniable that challenges to be overcome still exist, but the path traced so far already points to positive results. The scenario that lies ahead for the new government from 2023 onward in Brazil will certainly be influenced by many external variables, mainly the significant increase in international oil prices amid the still present effects of the COVID-19 pandemic and the consequences of the conflict in Ukraine. In this context, and considering what has been discussed in this chapter, Brazil has the potential to be one of the leaders in the global energy transition agenda for a low-carbon economy. In other words, it is undeniable that Brazil can also make its energy transition a geopolitical asset in international trade and climate negotiations. The path to do so involves making the country an exporter of new technologies,

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such as green hydrogen, associated with sources such as wind and solar. The strengthening of a national production chain in this sector not only contributes to the reduction of GHGs but can also lead to the integration of Brazil into one of the global industries of the future. As major trading partners, Brazil and China can and should cooperate on issues related to the innovation of technologies and their implementation and adaptation, with a view to expanding sustainable practices in the energy sector, as discussed in the chapter. Adopting a sustainable agenda in China requires Brazil to improve its relationship with the Asian country, its biggest trading partner. There is an increasingly significant presence of Chinese companies in the Brazilian market. Even with challenges to be faced for the expansion of investments in renewable sources the incentive policy put forward by the Brazilian government in the last two decades were important in this process, considering social inclusion programs, solar and wind energy auctions, net-metering systems, and financial and fiscal incentives (Cavalcante, 2018). We still need to move forward in many different factors such as taxes, logistics, energy costs, wages, and others. It is important to consider that the energy scenario for both countries suggest that there is a large window of opportunities for energy cooperation that so far has not been fully exploited. China is a leader in the solar energy sector and Brazil actively invests in the sector’s growth. We need to expand talks beyond the variable of commerce and investments. According to Oliveira (2016), the China-Brazil energy cooperation lacks a framework agreement that encompasses trade, equipment supply, and technological services for the energy companies considering energy security and climate change objectives. The technology transfer channels are not well developed, and it needs to be incorporated on the Sino-Brazilian cooperation talks. Despite this, Brazil is inserted in a very favorable scenario for the expansion of investments in renewable energies, given its great potential, which makes the Brazilian market very promising and sympathetic to the expansion of the assets of Chinese companies. Brazil and China already have a solid trade and cooperation relationship, the energy arena is just one example of how we can strategically benefit from relations with the eastern country. Therefore, it is virtually certain that regardless of what happens in the next few years, China will hardly abandon its role as a fundamental country in Brazilian foreign policy. As well put by Teixeira and Rossi (2021), Brazil-China cooperation in sustainability is more than an opportunity, it is challenging because

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of the potential to explore new cooperation logics and development narratives, with potential global impacts in the coming decades.

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Agency Partner Country Series, IEA. https://doi.org/10.1787/978926424 7482-en Hussain, H. R. (2022). China-CELAC Joint Action Plan 2022–2024 set to unlock dividends for Latin America. CGTN . https://news.cgtn.com/ news/2022-02-15/China-CELAC-Joint-Action-Plan-to-unlock-dividendsfor-Latin-America-17Fiv0RNhtK/index.html. Accessed 24 January 2023 Li, Z., Gallagher, K. P., & Mauzerall, D. L. (2020). China’s global power: Estimating Chinese foreign direct investment in the electric power sector. Energy Policy, 136, 111056. https://doi.org/10.1016/j.enpol.2019.111056 Montenegro, R. H., Paiva, I., & Feitosa, L. M. (2020). O lugar das fontes renováveis no relacionamento do Brasil com os “RICS” na área de energia: Uma análise da agenda bilateral e das declarações de cúpula (1990–2018). Revista Conjuntura Austral, 11(53), 139–160. Myers, M., & Ray, R. (2022). What role for China’s policy banks in LAC? (China Latin America Report). Global Policy Development Center. Nascimento, A. M., Liu, L., Alves, J. R. C. S., & Oriá, P. (2021). Chinese investment in the Northeast region of Brazil: An analysis about the renewable energy sector. Revista De Gestão, 28(4), 376–389. https://doi.org/10.1108/ REGE-12-2020-0147 Observatório do Clima. (2022). Brasil 2045: Construindo uma potência ambiental (Vol. 1). https://www.oc.eco.br/brasil-2045-construindo-uma-pot encia-ambiental-vol-1/. Accessed 25 January 2021. O Globo. (2022). Especial Energia: Veja por que o Brasil tem potencial extraordinário para liderar transição verde. O Globo. https://oglobo.globo. com/um-so-planeta/noticia/2022/05/brasil-tem-potencial-para-liderar-age nda-global-de-diversificacao-de-fontes-de-energia.ghtml. Accessed 25 January 2021. Oliveira, A. D. (2016). Energy security: A Brazilian Chinese strategic alliance. Revista Tempo Do Mundo, 2(1), 23–50. Roy, D. (2022). China’s growing influence in Latin America. Council on Foreign Relations. https://www.cfr.org/backgrounder/china-influence-latin-americaargentina-brazil-venezuela-security-energy-bri#chapter-title-0-9. Accessed 25 January 2023. Schutte, G., & Victor, D. (2017). The expansion of Chinese foreign investment: The case of the Brazilian energy sector. Conjuntura Austral, 8(44), 90–113. Silveira, L. (2018). La¸cos e tra¸cados da China no Brasil-implanta¸c˜ao de infraestrutura energ´etica e a componente socioambiental. UNB. Brasilia : UNB, 2018. Dissertation. Tang, C. (2017). Investimentos Chineses no Setor Energético Brasileiro: Oportunidades para o Brasil. FGV.

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Teixeira, I., & Rossi, T. (2020). Brazil and China: elements for environmental cooperation. Brazilian Center for International Relations (CEBRI). https:// www.cebri.org/en/doc/17/brazil-and-china-elements-for-environmental-coo peration. Accessed 25 January 2023. Valor Econômico. (2022). Produção de painéis não é competitiva no Brasil e Ásia atende 95% do mercado. Valor Econômico—Globo. https://valor.globo. com/publicacoes/suplementos/noticia/2022/05/30/producao-de-paineisnao-e-competitiva-no-brasil-e-asia-atende-95-do-mercado.ghtml. Accessed 24 January 2023. Zhang, P. (2019). Belt and road in Latin America: A regional game changer? Atlantic Council. https://www.atlanticcouncil.org/in-depth-research-rep orts/issue-brief/belt-and-road-in-latin-america-a-regional-game-changer/. Accessed 24 January 2023.

China’s Environmental Turn and the Impacts on Investment and Trade in Brazil-China Relations Niklas Werner Weins , Jefferson dos Santos Estevo , and Talita de Mello Pinotti

1

Introduction

Since the first Earth Summit in 1992, Brazil and China, as two biologically mega-diverse countries, have been engaged in a dialogue on environmental matters and have both been active in the three Rio conventions (climate change, biodiversity, and desertification). When it comes to

N. W. Weins (B) · J. dos Santos Estevo · T. de Mello Pinotti University of Campinas, Campinas, Brazil e-mail: [email protected] J. dos Santos Estevo e-mail: [email protected] T. de Mello Pinotti e-mail: [email protected] URL: https://www.unssc.org/campuses/bonn-campus T. de Mello Pinotti United Nations System Staff College, Bonn, Germany N. W. Weins Wageningen University, Wageningen, Netherlands © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_8

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the outside perception of commitment to sustainability, however, China’s image abroad is most often still that of an environmental villain with images of cities covered in thick smog, dirty coal power plants, and high levels of water contamination (Economy, 2011). In overcoming those problems, Beijing has been recognizing the ever more urgent need to act on environmental protection and has taken it on as a civilizational task within its ideal of building an Ecological Civilization (EcoCiv). While the practical effects of the environmental reforms can already be felt domestically (Garcia et al., 2022), China’s overseas operations are only barely starting to mirror this trend. In this chapter, we consider the impacts that the renewed emphasis on the environment in China may have on its relations with Brazil. In the second section of this chapter, we examine the most recent developments in Chinese policies with respect to the environment to discuss how they are reflected in its outward engagement through investments. In section three, we evaluate the current environmental impacts China has on Brazil, both in terms of Foreign Direct Investment (FDI) and Commercial Relations, and reflect if there are any prospects of EcoCiv changing the outlook on Brazil’s current bleak stage of policy support and responsibility for environmental concerns.

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China’s Environmental Turn

China’s turn to its civilizational relation to the environment has become a central and ever more pressing issue for Beijing. Due to the rising number of extreme weather events and environmental incidents in China at the turn of the millennium, there has been increasing recognition of the need for a more comprehensive understanding of development that goes beyond economic growth. This has led to several unprecedented experiments in environmental policies, e.g., massive forestry interventions in the “Great Green Wall” to combat desertification, and the conversion of sloping lands and unproductive croplands to forests to reduce erosion (Delang & Yuan, 2016, p. 19). Also, new social institutions like River and Forest Chiefs were created to commit local politicians to environmental policies (Wang et al., 2021, n.p.). Global climate change and biodiversity loss have come to be understood as a serious threat, which has made not only domestic environmental policies but also the international commitment to the planet an increasingly prominent concern for leaders of the Communist Party of

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China (CCP) (Teng & Wang, 2021, p. 142). With China presiding COP15 of the Convention on Biological Diversity (CBD) in 2022,1 there is more international attention to its environmental policies. One example is the Ecological Conservation Redlines program (hongxian 红 线): instituted experimentally at the beginning of the 2000s, it promotes an integrated approach to climate and biodiversity protection on multiple levels of government and is a promising policy draft for long-term lowemission development strategies (Schmidt-Traub et al., 2021, p. 4). While China’s international engagement along the Belt and Road Initiative (BRI) has raised concerns about environmental and social impacts (Yang et al., 2021, p. 1525), its integrated character and the country’s aspirations to become a model of an EcoCiv, also present an unprecedented opportunity for the standardization of environmental impact assessments and an overall raise of minimum standards, in Chinese projects abroad such as the BRI (Ascenção et al., 2018, p. 208). China’s vision of “Building an EcoCiv” has received relatively little attention abroad. Yet, it has created hopeful expectations of the country becoming a (long awaited) environmental leader for the developing world (Geall & Ely, 2018, p. 6). EcoCiv is best understood as a “socio-technical imaginary” of a sustainable eco-socialist future under the leadership of the CCP (Hansen et al., 2018, p. 195) and was enshrined in the CCP’s party constitution in 2012 and in the national constitution in 2017. Since its first prominent political uptake in 2007, it has been evolving while going global as a reference for environmental politics and practices (Hansen et al., 2018, p. 199). The guiding principle for the CCP’s sustainable socialist society has been categorized in different ways and with different degrees of external criticism or enthusiasm. While it is mostly referred to as a general environmental governance framework (Barbi et al., 2016), academic, and activist literature more often refers to it as an eco-socialist blueprint, while Western academia and media coin it bluntly as a “misleading propaganda ploy” (Chen & Zhao, 2022, p. 195). Its potential has often been neglected by the international discussion about China’s “environmental

1 This is China’s second time hosting a major environmental COP of the Rio Conventions since COP13 of United Nations Convention to Combat Desertification in Ordos in 2017. The second part of COP15 was transferred to the city of the Convention’s headquarters in Montréal, Canada, due to the continued pandemic situation in China.

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governance” storyline,2 failing to portray the complex changes happening in the country (Chen & Zhao, 2022, p. 196). While there is recognition in both academic writing and the media that “China will play a much bigger role in international environmental governance”, this is often mixed with fear and perceptions of a strategic threat based on the idea that there will be “a much stronger push from Beijing for their environmental agenda to be adopted by the rest of the world”. This is expressing a fear in currently dominant countries that they will lose their ability to influence the way in which environmental policies are negotiated and to define sustainability. Commonly, EcoCiv has therefore been deemed an “empty slogan” by Western media (Greenfield & Ni, 2021, n.p.), often linked to the performance legitimacy of the CCP’s rule (Teng & Wang, 2021, p. 148). Domestically, China is also reviewing its long-standing emphasis on development over environmental protection. Its most recent 14th FiveYear Plan (2021–2025) has, for the first time, not defined a GDP growth goal, focusing on the decarbonization of the energy sector, sustainable electrification, fuel change, carbon sequestration, and the management of energy demand (Ungaretti, 2021, n.p.; Nascimento et al., 2021). Two central aspects are quality growth and dual circulation—the move away from heavy reliance on exports, foreign technology, and resources. For reaching its national and international sustainability commitments, the government’s focus lies on lowering energy and carbon intensity per GDP unit (−13.5% and −18% respectively, compared to 2020) and moving to more renewable energies to peak its carbon emissions before 2030 and become carbon–neutral by 2060.3 Wang and Hu (2021) in an analysis of 129 Chinese and Latin American think-tanks state that this has generally been seen as opening up new possibilities for cooperation. Less attention has been given to China’s contribution to greening trends and its commitment to forest cover for carbon sequestration (Chen et al., 2019). While only raising its target by one percent to 24.1% in the current plan, its centrality at COP15’s negotiations about a “30 × 30”

2 Chen & Zhao (2022, p. 205) affirm that “English-language media have framed Ecological Civilization following their orientalist and Cold-War inspired boilerplate narrative of China being a country constrained by structural limits and lack of transparency”. 3 According to a recent government study, this may even already happen by 2027 (CCTV, 2022; Chen et al., 2022).

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target4 might contribute to making this a more central feature of EcoCiv (Schmidt-Traub et al., 2021; Shanahan, 2021). As a natural consequence, these new trends in China will have direct and indirect consequences for its international partners, but it is still unclear how they will specifically impact them. A study by Wang and Zadek (2016, p. 31) affirms that while publications on China’s environmental impacts in English and Spanish often point out negative impacts, “Chinese academia, NGOs, media and legal documents […] focus on discussing the successful cases and providing recommendations/guidelines for Chinese companies to reduce negative environmental footprints in the future”. In a joint communiqué by the National Development and Reform Commission (NDRC), the Ministry of Foreign Affairs (MFA), the Ministry of Ecology and Environment (MEE), and the Ministry of Commerce (MOFCOM) on Green Development in the BRI, many of the environmental risks in Chinese overseas investments are openly recognized (MEE, 2017; State Council, 2017). However, the tone continues to be non-judicial, making use of nonbinding language like with the “encouragement to follow” international standards. For example, Sect. 2.2 of the document states: (…) encourage enterprises to abide by international economic and trade rules and the ecological and environmental protection laws, regulations, policies and standards of the host country, attach great importance to the ecological and environmental protection demands of local people, strengthen the construction of enterprise credit systems, prevent ecological and environmental risks, and ensure the safety of the ecological environment (MEE, 2017, translation by the authors).5

At the second Belt and Road Forum for International Cooperation in 2019, the BRI International Green Development Coalition (BRIGC) launched and published its first project baseline study report in 2020 (BRIGC, 2020) to define sustainability criteria for overseas projects. Furthermore, a risk screening tool for overseas investments is currently being developed by the International Environmental Cooperation Center

4 Commitment to 30% conserved land and/or marine areas by 2030. 5 From the original passage 2.2 总体要求(二)基本原则: 推动企业遵守国际经贸规则和

所在国生态环保法律法规、政策和标准, 高度重视当地民众生态环保诉求, 加强企业信用 制度建设, 防范生态环境风险, 保障生态环境安全。

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(IECC) of the MEE and the Paulson Institute (Paulson Institute, 2022). At the present moment, however, criteria for overseas investments are still “mostly voluntary in nature so long as firms comply with host country regulations”, with government encouragement to invest in clean energy (Gallagher & Qi, 2021, p. 260). It does not however “restrict or prohibit investment in carbon-intensive […] investments, revealing a clear discrepancy between policy for domestic and overseas investment” (ibid.). Understanding the Chinese stand on the environment and especially the impacts of its growing interest in mainstreaming the environmental perspective in its national and international policies is key to any country that wants to build a stronger and greener relation with the Asian country. The direction of China’s domestic, as well as its international embrace of environmental issues, suggests that, as it emerges as a seller of new environmentally sustainable technologies on a lucrative market, it also comes in with the necessary policy ideas on the protection of biodiversity and willingness to mitigate unavoidable environmental impacts. While not denying the terrible environmental externalities of its direct and indirect presence in Brazil, we would like to highlight the possible positive sideeffects of Chinese engagement in Brazil under its Ecological Civilization and argue here that a better-informed Brazilian perspective of the risks and possibilities in its relation to China could help raise environmental standards. EcoCiv in particular presents us with a formidable argument to demand such a change, as it becomes a guiding principle for China’s international relations and actions overseas (Weins et al., 2020). In the following sections, we will highlight the main areas in which China’s economic policies and its environmental turn may affect Brazil the most: investments and trade.

3 A Greener China and Its Impacts on Sino-Brazilian Relations 3.1

Chinese Investment in Brazil: Environmental Risks and Opportunities

Since the 1990s, the progressive reduction of barriers to FDI around the world created new, more diverse choices for investors: they could choose, e.g., recipients that offered conditions more aligned with the investor’s interests, such as fewer taxes, more or less qualified labor, political alignments, etc. In that sense, environmental concerns would also start to drive

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the choice of where to invest, either by choosing countries more or less committed to the environmental agenda. The consolidation and advancement of environmental commitments in the international system, with instruments such as the 2030 Agenda for Sustainable Development and the Paris Agreement, made it an imperative for recipient countries to ensure that FDI is allocated in a way to reinforce national pledges and policies. For example, many countries have created stricter environmental legislation that are now also applied to FDI in potentially polluting sectors, such as mining, energy, and infrastructure. Nevertheless, the literature on the issue still lacks a clear consensus on the correlation between FDI and environmental protection, pointing out both positive and negative impacts (Paixão & Nogueira, 2016, pp. 56–62; Zhuang et al., 2021). The main hypotheses to both positive and negative impacts are highlighted in Table 1.6 When it comes to its FDI policies, China stresses its commitment to win–win partnerships, the opportunities that lie in strengthening SouthSouth cooperation and its non-interference in domestic affairs (Cardoso, 2013). In this modality, the involved actors often have closer levels of development or similar historical experiences, such as a lagging industrial or agricultural base. Therefore, the emphasis on South-South cooperation does not involve the idea of hierarchy in the sense of reproducing a successful model, but rather the sharing of technologies, financing, and knowledge (United Nations Office For South-South Cooperation, 2022), which can suggest a reinterpretation of the pollution halo hypothesis (see Table 1). Furthermore, FDI based on South-South cooperation is not tied to conditions related to the implementation of specific policies, whether fiscal, social, or environmental. Priority is given to national models and legislation, so that financing follows the environmental

6 It is important to emphasize that most of these hypotheses were elaborated, or indeed explored, in view of a considerable difference between the environmental development of the investor and the recipient country. This is because, to a large extent, the studies developed in the 1990s focused on traditional North-South cooperation, which foresees a hierarchy among the agents involved: a more technologically and economically advanced country from the Global North provides resources to a less advanced country from the Global South. It is also assumed that the investor countries have more developed environmental legislation than the countries receiving FDI. While there is a strong rhetorical commitment to social and environmental sustainability in the Global North’s engagement in the construction of socio-environmental standards and product traceability, their actual impact has been minor and actions have often been inconsistent (Brad et al., 2018).

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Table 1 Main hypotheses on the relationship between Foreign Direct Investment and Environment Hypothesis

Characteristics

Pollution Haven

To reduce costs, investors tend to allocate FDI in countries or regions with less environmental restrictions, creating pollution, and degradation havens FDI can foster the diffusion of more advanced environmental technologies and practices, which ultimately contribute to a greener development in the recipient country. In this scenario, it is assumed that the origin of the FDI presents more advanced environmental practices than the ones present in the recipient location FDI can scale up production in the regions or sectors where it is allocated, naturally increasing pressure on the environment When FDIs prioritize weaker environmental legislation to choose their destination, potential recipients start to compete to offer less restrictions, jeopardizing environmental concerns By bringing in more advanced environmental practices, foreign companies can exert positive influence on the policymaking of local environmental rules and norms

Pollution Halo

Scale effect Race to the bottom Political Influence

Source Created by the authors with the information from Paixão and Nogueira (2016, pp. 48–53) and Zarsky (1999, pp. 56–62)

rules of the destination country, fostering national ownership and often avoiding negative impacts, as predicted by the pollution haven hypothesis (Abdenur, 2017, pp. 175–179; Hochstetler & Inoue, 2019). In addition, FDIs guided by the framework of South-South Cooperation focus on fostering national capacities and strengthening the autonomy of the states receiving the investments. This cooperation modality proposes, above all, the horizontal exchange of experiences. By choosing to advance South-South cooperation to direct its investments, China has become an attractive partner for countries with governments which traditional donors and investors have shied away from due to, e.g., human rights concerns, often filling a void left by other partners (Bräutigam, 2011, pp. 760–762). Independent of the country investors are from: when it comes to environmental impacts, currently the reality is that the host countries’ domestic policies matter most and influence how investors enter a country (Abdenur, 2017). As shown in the case of trade deals, Milani and Chaves (2021, pp. 7–16) hold that the economic and development motivations of the EU (but also China’s) have undermined

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the power of climate norms, the effectiveness of environmental regulation, and compliance with human rights protection in Brazil (Milani & Chaves, 2021, pp. 15–16). However, there has been growing evidence of sharing of technical experience and commitments to joint positions on environmentally responsible investments (Moran et al., 2012; Lu et al., 2021, pp. 13–18) though skepticism remains about China’s “real” intentions—especially in North Atlantic media and academia (Emmanuel, 2021). Until 2020, 47% of all Chinese resources directed to Latin America were destined for Brazil, making it the region’s main recipient. In 2019, the amount reached US$ 7.3 billion, but fell to US$ 1.9 billion in 2020, a movement that was also reflected in other regions due to the COVID-19 (Cariello, 2021, pp. 47–48). Investments (2007–2020) were distributed among the sectors of electricity (48%), oil and natural gas (28%), minerals (7%), manufacturing industry (6%), and infrastructure (5%) (Cariello, 2021, pp. 14–18). The impacts, however, differed according to the sector: in the electricity sector, FDI resulted from acquisitions of companies that already had hydroelectric plants, instead of channeling new resources to solar and wind energy and fostering the advancement of green energy in Brazil. Chinese state oil companies acquire exploration fields, previously exclusive to Petrobras, which may bring new investments but also negative impacts (Ching, 2021). Regardless, both were opportunities for Chinese companies to expand business globally, in a country that needs and demands such investment (Moreira et al., 2020, pp. 242–248). In infrastructure, however, projects such as the Belo Monte energy transmission line and two unfinished ones, the Ferrogrão railroad and the Port of São Luís, Maranhão, raise contradictory concerns. Despite fulfilling central functions in improving regional integration, they cross fragile biomes and areas close to environmental and indigenous reserves, which could generate negative impacts by creating the above-mentioned scale effect (Abdenur et al., 2021). Chinese companies report to still be unaccustomed (shuitu bufu 水土不服) to Latin American environmental and labor policies and their awareness of corporate social responsibility often does not meet the needs of communities which has undoubtedly weighed on the perceptions of Chinese engagement in the region (Guo, 2016, pp. 48–54; Yang et al., 2021). Most of these projects, in different sectors, are connected to the need of increasing Brazilian exports to China, by building logistical infrastructure.

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3.2

Consequences of the Commercial Relations Between China and Brazil

While China has been the biggest trading partner for Brazil for more than a decade and there has been a strategic partnership since 1993, Brazil is only its 10 most important trading partner. The economic relationship between Brazil and China has intensified considerably in the last fifteen years, especially during Lula da Silva’s administration (2003–2010). Since then, Brazilian exports to China have been focused on primary products: oil, iron ore, soy, beef, and cellulose—all with considerable environmental impacts (Abdenur et al., 2021, pp. 15–27; Chan & Araújo, 2020; Macfarquhar et al., 2019, pp. 1–3; Milani & Chaves, 2021, pp. 10–14). Oil and derivatives in their production and subsequent consumption, increase greenhouse gas emissions, and contributing to climate change. Iron ore exploitation is highly soil degrading and produces environmentally hazardous waste. In some cases, deforestation is a result of the expansion of agribusiness, especially aimed at beef and soy exports. The primary goods exporting model carries environmental impacts from consumer into producer countries. In Brazil, this is especially caused by the agribusiness in two environmentally sensitive regions: the Cerrado and the Amazon. In practice, it is often left to the importing countries to decide about demanding minimum standards, not the exporter (Milani & Chaves, 2021, p. 16). Some European countries regularly criticize deforestation in Brazil, especially France and Germany (Casarões & Flames, 2019, p. 9). From China, there is no such criticism at this point, as domestic matters do not concern its diplomacy or even Chinese companies. This silence stems from non-intervention in domestic affairs, one of the main defining characteristics of Chinese diplomacy and South-South cooperation (Lazzeri, 2019; Milani & Chaves, 2021, p. 3). The Chinese diplomat and minister-counselor in Brazil, Qu Yuhui, in an interview about the worsening of deforestation said: “Brazil has been consistent in protecting the environment. I am not the one who recognizes it, but the Chinese authority recognizes it. The environmental criteria are very strict in Brazil (…)”. Even though Brazil does have robust environmental legislation, in recent years, there have been constant attempts to flexibilize those laws (Menezes & Barbosa, 2021, pp. 10–11). China increased soybean imports from Brazil, even more so after the economic clashes with the US, another major partner, from which China buys soybeans. The central point in this

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demand is in the territory for plantation, which has expanded into areas of environmental preservation. Until 2006, this expansion occurred mostly in the Amazon region, but because of the Soy Moratorium, deforestation from this crop has been largely reduced. The idea was an embargo on soy grown in environmental protection areas, preventing deforestation, along with other public policies, such as strengthening inspection authorities (Hochstetler, 2017, pp. 7–8). This scenario, with the reduction of deforestation in the Amazon, lasted until 2014, with a sharp increase since 2017. In 2021, the historically highest deforestation peak was reached with values close to those in 2005 (INPE, 2022). With the moratorium, a part of the production moved to another essential biome, the biodiverse Cerrado savanna, which does not encompass such special protection like the Amazon (Lahsen et al., 2016, p. 5). Deforestation and environmental degradation in this region are on the rise, reaching their highest value since 2015. Most exported soybeans came from Cerrado which spans the four states Maranhão, Tocantins, Piauí and Bahia, a region called MATOPIBA (Trase, 2019; Chan & Araújo, 2020, para. 10; Rajão et al., 2020, pp. 25–26). According to a study by Trase (2019), of all Brazilian soybean exports between 2013 and 2017, 42% were destined for China, 28% for domestic consumption and 15% for Europe. According to the authors, soybeans exported to China come from several municipalities, but mostly from the south of Brazil. A smaller portion, around 8%, is associated with the MATOPIA region, the main planting area connected to Cerrado deforestation. The biggest buyer in this region is Europe. According to the authors, if China really wanted to avoid importing soy cultivated in deforestation areas, it would have to make sure its imports come from outside the MATOPIA region (Lazzeri, 2019, para. 6; Trase, 2019). Deforestation is the main source of GHG emissions in Brazil and most of the emissions are linked to exports. According to Rajão et al. (2020, p. 248) “All economic partners of Brazil should share the blame for indirectly promoting deforestation and GHG emissions by not barring imports and consuming agricultural products contaminated with deforestation, illegal or not”. Another essential export product is beef for which Brazil is the largest exporter in the world. It is also the biggest exporter of soybeans, and demands for meat and leather, both of which are produced in Brazil, have increased globally. Here, Chinese demand is a major recent growth factor, which also stimulates the advance of production in conservation

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areas. Livestock in the Cerrado and Amazon, cause an increase in GHG emissions, losses of biodiversity, slave labor and conflicts over land (Trase, 2020, pp. 1–10). We would like to emphasize that importers should more routinely consult if the products are related to deforestation and if this is a requirement. In the case of cattle, it is difficult to trace the entire production chain, but some slaughterhouses, especially the larger ones, indicate the origin of their products, which guarantees environmental compliance to exporters. Large exporting meatpackers, such as JBS, Marfrig, and Minerva, are signatories of the G4 Agreement on not purchasing products from areas of the Amazon that were deforested after 2009, which, to a certain extent, guarantees the importer that there is some type of monitoring of the origins of export products in the Amazon region (Macfarquhar et al., 2019, pp. 1–5; Milhorance, 2020; Trase, 2020, pp. 1–13). Cattle exports come from several slaughterhouses in different locations in Brazil. However, it is from the Cerrado that around 50% of China’s imports occur. As seen above, this increasingly degraded biome does not receive much attention or concern in the media. According to Milhorance (2020, para. 7), half of the slaughterhouses authorized by China are located in this biome, but the approval is not related to environmental issues or embargoes, only to sanitary reasons. There is currently no concern or demand for cattle without environmental standards, which do not cause deforestation. In a 2019 (pp. 1–9) study, MacFarquhar, Morrice, and Vasconcelos indicate that none of the main importers of meat and leather in China has a policy against deforestation. Thus, in the analysis by Milhorance (2020, paragr. 16) “(…) while environmental destruction in Brazil has featured on the political agenda in the US and Europe, China has remained relatively quiet”. Despite the increase in demand, Brazil can achieve a production concerned with deforestation and does so in parts already. Control is possible, as has been done with the Soy Moratorium since 2006. However, for meaningfully advancing on this issue, national policies to control deforestation are indispensable: in Brazil, the legislation exists, it needs to be complied with and monitored, reducing deforestation is beneficial for the country, and most producers understand this (Rajão et al., 2020, pp. 246–248). However, the opposite has actually occurred, since the second Rousseff administration (2014–2016), with great pressure

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from the so-called Ruralist Caucus,7 for the reduction and weakening of environmental laws, for the benefit of parliamentarians and agribusiness groups they connected with. After her impeachment, Michel Temer took office in 2016 with the support of this caucus, which was essential for him to staying in power. In exchange, the ruralist caucus was rewarded with measures of environmental flexibility. The scenario changes under President Jair Bolsonaro, who is openly opposed to environmental protection and influenced by a parliament closely linked to agribusiness and its caucus (Hochstetler, 2021, pp. 561–565). Protection demands investments and State structure. In recent years, the budget earmarked for the Ministry of the Environment (ME) environmental protection has been reduced (see Fig. 1), which makes enforcement impossible and increases environmental crimes. As argued before, the main exports from Brazil to China are products with a high degree of environmental degradation. Soy imports are concentrated in the southern region, with no impact on the regions most affected by deforestation, the Amazon and Cerrado, as shown in Fig. 1

Fig. 1 ME Budget and Deforestation Amazon and Cerrado (2018–2021) (Source Created by the authors with the information from [ME, 2022; INPE, 2022]) 7 Or Ruralist Bench, from Portuguese Bancada Ruralista.

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(Trase, 2019, pp. 1–2). Beef and leather come from these regions, especially from the second, with less international prominence. The largest portions of slaughterhouses are able to trace the origins of the animals, which can help control imports (Macfarquhar et al., 2019, pp. 1–9; Trase, 2020, pp. 1–13). China and its importers can access data on the origins of soy and cattle, so that it does not contribute to deforestation, even more so with growing demand. However, what happens in Brazil are attempts to loosen environmental laws, and to explore territories for agribusiness. In the last two governments, especially the current one, environmental protection suffered its biggest blows, which is not a cause of China in the country, but a government policy. Brazil has good environmental legislation. In general, Brazilian environmental problems are due to the lack of supervision, resulting from the reduction of investments, as seen in the figure above. China contributes indirectly, with its imports of primary products, all of which have environmental impacts, but which are not directly carried out by Chinese companies. For China to become a global leader in sustainability and combating climate change, a more robust stance will be needed, with embargoes against products that cause deforestation.

4

Conclusions

The world must undergo urgent transformations and find solutions to global environmental problems that do not respect borders. In this endeavor, China’s successful domestic results in recent years could inspire other countries to take similar measures. In the words of President Xi: “Humankind should launch a green revolution and move faster to create a green way of development and life, preserve the environment and make Mother Earth a better place for all” (Xi, 2020, n.p). As China’s model of growth at all costs has proven unsustainable, the country has undergone significant domestic transformations in environmental preservation in its quest for becoming an EcoCiv. The ideas, policies, and technologies that encompass this process can be expected to influence regions China interacts with, as it raises its efforts to mitigate environmental risks. While it will take the country years to mitigate its burdening environmental problems, its leaders continue to indicate new, more ambitious goals for a better and cleaner future, in which the reduction of social, economic, and environmental risks is central.

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To Brazil, the relationship with China is of paramount importance, both in terms of investments and bilateral trade. Despite the diplomatic frictions in the current government, the commercial side has continued due to its strong economic complementarity. Exports from Brazil to China continued and large state-owned companies continued to enter key sectors of the Brazilian economy, such as energy. As highlighted in sections three and four on trade and investment, advances in environmental protection are still needed in Brazil to mitigate risks. Under the current President Bolsonaro environmental protection measures have been weakened by cutting the ME’s budget and encouraging the increase in deforestation in key regions for the national and global environment, Cerrado, and Amazon. Albeit Chinese diplomacy and South-South cooperation do not intervene in other states’ domestic affairs, China can cooperate on a global environmental agenda through its commercial relationships by demanding environmental minimum standards such as those it is implementing domestically. Brazil could be an excellent starting point for such overseas initiatives, despite the current federal government’s efforts that made the country lose its historical position as a cooperative leader in environmental negotiations. Both the Bolsonaro government’s domestic and international actions present a drastic break with the country’s decade-long environmental governance efforts. Rosito (2020) suggests that the issue of the environment is one of the main challenges to be addressed in the Sino-Brazilian relationship: both from the individual perspectives, since Brazil and China still need to advance environmental preservation, as well as from a bilateral perspective, since the cooperation of both emerging powers within the framework of South-South cooperation would allow for the consolidation of environmental standards that are more aligned with the interests of developing countries, being beneficial for both (Costa, 2021). In terms of FDI, it would be possible to test new practices and environmental commitments that would allow both sides to avoid some of the hypotheses presented in Table 1, reducing the negative effects on the environment and amplifying their positive impacts. Schmidt-Traub et al. (2021, pp. 3–4) argue that some countries generate environmental impacts on their exporters, especially when it comes to commodities, and that thus, joint policies, agreements, and innovative ideas to reduce impacts on production should be encouraged. We have here presented possible implications for Brazil-China relations.

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The increased production to meet Chinese demand for soy and beef is surrounded by a wide array of environmental and social problems. Importers can partly trace products to their origins to make sure they are not causing deforestation. An embargo on products that may jeopardize the environment is essential, eliminating those producers who do not follow the law (Rajão et al., 2020, pp. 1–4). Some cattle importers in China are already seeking to align with these practices, but are still at an early stage (Trase, 2020, pp. 11–12). A positive example came from COFCO International, which will adopt until 2023 the tracking of the supply of soy from Brazil which could be an important step toward advancing commitments to halting deforestation in areas such as the MATOPIBA. Cooperation between Brazil and China can advance the adoption of environmental practices, solutions, and policies, using successful actions in both countries for a commercial relationship with the lowest environmental impact possible. Brazil has good environmental legislation, but needs improvements in enforcement and not relaxed protection. However, the current government and the Ruralist Caucus managed to advance in their strategic projects, the result being an increase in deforestation. These are related to trade with China, cattle and soy exports. We would like to suggest here that China can contribute to more sustainable practices through import control and attention to its investments, both in the environmental and social areas.

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Common Interests and Brazil-China Multidimensional Cooperation Zhiwei Zhou

How is China changing Brazil? This is a very interesting topic, and in order to reach a clear answer requires telling a clear story about the history and development of the relationship between China and Brazil. That said, I have found that the relationship between the two countries has been a process of mutual construction. As with to the global logic of international relations, the development of relations between countries is based on a process of convergence of interests, and the degree of the convergence of interests is the key factor to determining efficiency in bilateral relations. As far as I can see, the most important reason that the China-Brazil relationship has attracted widespread international attention and discussion and has become an important case study for international relations, lies both in the high degree of matched interests between the two countries and in the fact that both countries benefit from the bilateral relationship. Without which, it would be difficult to explain the rapid development dynamic of China-Brazil relations.

Z. Zhou (B) Institute of Latin American Studies, Chinese Academy of Social Sciences, Beijing, China e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6_9

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In fact, in South America, Brazil established diplomatic relations with China slightly later than Chile (1970), Peru (1971), Argentina (1972), Guyana (1972), and Venezuela (1974), and it can be said that neither China nor Brazil was a priority partner for the other in the early years of their diplomatic relations. In 1984 President Figueiredo visited China, and in 1985 Premier Zhao Ziyang visited Brazil. In 1988, President Sarney visited China, and during the meeting between Sarney and Deng Xiaoping, the two leaders proposed the twenty-first century to be both the Pacific Century and the Latin American Century—and this consensus fast-tracked China-Brazil relations. At that stage, scientific and technological cooperation became a priority area for China and Brazil, with China learning hydropower technology from Brazil, and the two countries launching the Earth Resources Satellite cooperation program. What is interesting is that, at the time, oil was the main product imported by Brazil from China. 40 years later, the oil trade between the two countries has changed direction, from Brazil to China. After entering the new century as two emerging powers on the rise, the regional and international influence of both China and Brazil increased considerably, and now their identities in the international system are gradually transitioning from peripheral countries to central countries. The relationship between the two countries is increasingly becoming formidable, a relationship of two great powers in the sphere international relations.

1

Bilateral Dimensions

In 1993, Brazil became the first country to establish a “strategic partnership” with China. Considering that the Cold War had only recently ended, the establishment of this strategic partnership reflected the relatively consistent national interests of both countries as well as the political determination of both governments to strengthen strategic cooperation. Since then, bilateral relations between China and Brazil have entered a phase of rapid progress, and in 2012 the relationship was again upgraded to a Global Strategic Partnership, making Brazil the first Latin American country in this partnership with China. In July 2014, during his visit to Brazil, President Xi Jinping put forward for the first time building a “community of shared destiny” between Brazil and China; in September 2016, when President Temer went to China for the G20 Summit, he emphasized that “China is the partner Brazil needs most at this stage.

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Now is a good time to further strengthen the partnership between China and Brazil.” The exchange of visits between the leaders of China and Brazil in 2019, after President Bolsonaro took office, deepened his understanding of the importance of China-Brazil relations. For, during his visit to China in October of that year, Bolsonaro made it clear that China was a crucial partner to Brazil, that Brazil attached great importance to China’s status as a great power, that Brazil considered the development of relations with China a priority in Brazilian diplomacy, and that it was willing to deepen and bring closer the Global Strategic Partnership between Brazil and China in order to achieve qualitative and quantitative improvements in China-Brazil relations.1 In November, when receiving President Xi Jinping, Bolsonaro stressed once again that China was a great world power and Brazil’s top trading partner, that Brazil-China cooperation was of growing importance for Brazil’s future development, and that Brazil attached importance to strengthening cooperation with China in a wide range of areas over the long term.2 At the same time, Xi Jinping repeatedly stressed that China-Brazil relations were “a model of solidarity, cooperation and co-development among large developing countries.” This shows that, since the establishment of the strategic partnership, the importance of bilateral relations has been highly emphasized across multiple Chinese and Brazilian government administrations, who recognize that bilateral cooperation not only benefits both countries directly, but is also an important component in South-South cooperation among emerging powers. Despite ideological differences across changed Brazilian administrations, “China is a vital partner for Brazil” has become the consensus among different political parties. This has determined that the political foundation of China-Brazil cooperation is sustainable, although it may be weaker or less strategic at certain points. The continuous deepening of bilateral cooperation, and the similar international identities and aspirations of the two countries, is the basis for the continuation of strategic cooperation between them. At the level of economic and trade relations, in the twenty-first century, especially with China’s accession to the World Trade Organization (WTO) in 2001, China-Brazil trade has entered a phase of accelerated growth 1 “习近平同巴西总统博索纳罗会谈”, 新华网, 2019年 10月 25日。 链接: http://www.xin huanet.com//politics/leaders/2019-10/25/c_1125153909.htm (检索日期: 2020年 1月 20日). 2 “习近平同巴西总统博索纳罗会谈”,《人民日报》 , 2019年 11月 14日 第1版。.

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that far exceeds the average growth rate of world trade. From 1999– 2013, China-Brazil trade increased from $1.54 billion to $83.33 billion, achieving a more than 50-fold increase over 14 years. In 2009, China replaced the United States as Brazil’s top trading partner ($36.9 billion vs. $35.6 billion), a position it had held since the 1930s. The high rate of trade growth between the two countries, which are geographically distant, is a reflection of the highly complementary economic relationship between the two countries. Since 1999, Brazil has been running a surplus in trade with China, with only small deficits in 1999, 2000, 2007, and 2008. Since 2009, China has maintained its position as Brazil’s largest trading partner. According to Chinese customs statistics, bilateral trade between China and Brazil exceeded $100 billion for the first time in 2020, reaching $119 billion, making Brazil-China’s 8th largest trading partner that year—after the United States, Japan, South Korea, Vietnam, Germany, Australia, and Malaysia. Trade between the two countries climbed further to $164 billion in 2021, accounting for 36.3% of trade between China and Latina America.3 Of course, the importance of trade between the two countries is even more evident in Brazil’s trade geography, where China accounted for 31.3% of Brazil’s total exports and 21.7% of Brazil’s total imports in 2021. Of particular interest is the fact that Brazil has an extraordinarily high surplus in trade with China—a sizeable $40.1 billion in 2021—representing approximately 70% of Brazil’s total annual surplus. In terms of investment, according to the BrazilianChinese Entrepreneurs Council (CEBC),4 from 2007 to 2020 China’s intended investment in Brazil totaled $110.6 billion, of which $66.1 billion has been confirmed, with an implementation rate of about 48%. This shows that China-Brazil economic and trade relations have been growing despite global pandemic trends over the last two years and will probably become an important external driving force for Brazil’s postpandemic economic recovery. With the high degree of complementarity and correlation between China and Brazil at the economic and trade level, China-Brazil economic and trade cooperation can maintain strong

3 http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302277/ 302276/4127455/index.html. 4 Tulio Carielo, Investimentos Chineses no Brasil: Histórico, Tendências e Desafios Globais (2007–2020). CEBC, Agosto de 2021, p. 22.

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resilience in its next phase, effectively avoiding the interference of political factors and the international environment. Science and technology cooperation is also an important element in bilateral relations between China and Brazil. After more than 30 years of cooperation, the China-Brazil Earth Resources Satellite (ERS) program has been a great success, with a total of six successful launches. The cooperative launch of earth resources satellites has ended China and Brazil’s dependence on other countries’ satellites for resource data and highlighted the strength of the two countries in high-tech. Space cooperation between the two countries has become a model for South-South hightech cooperation for this new era, and in addition to space cooperation, China and Brazil have also developed fruitful exchanges in the fields of hydropower, transportation, agriculture, and medicine. In the second decade of the twenty-first century, China and Brazil established the China-Brazil Center for Climate Change and Energy Technology Innovation, the China-Brazil Joint Laboratory for Agricultural Sciences, and the China-Brazil Joint Center for Nanotechnology, which have become new growth points in China-Brazil science and technology cooperation. At the same time, China-Brazil science and technology cooperation has gradually formed, with “aerospace cooperation as the core, radiating outwards to climate change, energy technology, agricultural sciences, nanotechnology and other broad areas.”

2

Multilateral Dimensions

China and Brazil are the largest developing countries in the Eastern and Western hemispheres, respectively, and they are also the main representatives of the BRICS countries, which means that both countries face similar opportunities and challenges. They also share the same responsibility, working for the interests of developing countries. Both China and Brazil pursue the diplomatic principle of multilateralism, advocate the democratization of international relations and the multipolarization of the world, and call for the establishment of a new international political and economic order. In this sense, China-Brazil relations in this new era have taken on a broader international meaning, which is why it has attracted more and more international attention. As two emerging powers, China and Brazil both have the will and potential to reform the current international order and realize a multipolar international landscape. In addition, the two countries share similar

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positions on major international affairs such as reform of the international financial system, food security, energy security, global climate change, and the United Nations Millennium Development Goals—and their shared will and similar positions are the basis for expanding bilateral cooperation in international affairs. In recent years, the two governments have been cooperating more and more closely in international multilateral institutions and forums such as the United Nations, the World Trade Organization, the International Monetary Fund, the World Bank, and the G20. And, especially through the BRICS platform, China and Brazil can achieve broader cooperation with other developing countries (especially with large developing countries), amplifying the voice of developing countries in international affairs and promoting the establishment of a new political and economic world order and a multipolar international system. “BRICS collaboration” is the central expression of Brazil’s strategy for strengthening South-South cooperation and has been intensified in its foreign strategy over the past decade. Although BRICS collaboration has focused on economic and trade cooperation among member countries, and reform of the global financial system over the past decade, it has gradually gained influence in international political and security affairs, especially in the resolution of regional conflicts, and has to some extent formed a “soft balance” against the unilateral military actions of the United States. In terms of the results, Brazil has achieved its policy goals in BRICS collaboration. It has not only strengthened its economic and trade ties with several important emerging powers, reaping “political dividends,” but has also enhanced its international influence and gained more recognition from the international community. Because of this, BRICS collaboration can be said to be a multilateral diplomatic practice with a high cost-benefit ratio for Brazil.5 Based on the growing international cooperation between the two countries in international affairs, the significance of China-Brazil relations has gone beyond the bilateral sphere to exercise increasingly important global and strategic impact. When, during his visit to Brazil in July 2014, President Xi Jinping raised the idea of the “community of shared destiny,” he emphasized in particular that China and Brazil should actively fulfill their international responsibilities, upholding and promoting international justice, and pushing the international order in a more just and 5 Zhou Zhiwei. Brazil and BRICS: Strategic Considerations and Effect Analysis, Journal of Latin American Studies. 2017, 39(04). p. 121.

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rational direction while pursuing their own development interests. They should strengthen the coordination and cooperation between the two countries within international and multilateral mechanisms such as the United Nations, the World Trade Organization, the G20, and BRICS and combine the strengths of developing countries so as to actively participate in global governance, striving for more institutional power and voice for developing countries. Undoubtedly, the enhanced attention of the two governments will inject new vitality into the development of China-Brazil relations, the comprehensive and practical strategic partnership between the two countries will be further broadened and deepened, and ChinaBrazil consultation and cooperation in international affairs will play a more important role, further strengthening the partnership between the two countries in the reform of the global system.

3

Cross-Regional Collaborative Dimensions

In January 2015, with the convening of the first ministerial meeting of the Forum of China and Community of Latin American and Caribbean States (China-CELAC Forum), overall cooperation between China and Latin America entered a phase of institutionalized operations. This not only opened a new era for friendly cooperation between China and Latin America, but also realized full and comprehensive cooperation between China and other global regions, especially developing regions. At the level of cross-regional collaboration between China and Latin America, Brazil has been very accommodating, yet holds a complex attitude toward China’s intensified policy efforts in Latin America. The complexity of Brazil’s attitude can be seen in the following aspects: first, China is an important trading partner and investor for most Latin American countries, and as China’s economic power grows, so does the irreversible trend of China increasing its Latin American cooperation— an inescapable policy choice for most Latin American countries; second, the development of China-Latin American collaboration, especially the promotion of infrastructure development in Latin America, is in line with the “connectivity” objective of Brazil’s regional strategy—and China can better compensate for shortcomings than Brazil in facing this regional strategy; third, the expansion of China into Latin America may weaken Brazil’s regional influence, which is contrary to Brazil’s regional strategy of “seeking regional leadership,” and to a certain extent is not conducive to Brazil’s long term goal of “shaping South America into a pole in a

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multipolar world.” Because of this, overall cross-regional collaboration between China and Latin America is an important part of China-Brazil relations. To strengthen collaboration with the region, Brazil is inevitably part of China’s promotion of collaboration across Latin America. Especially, considering Brazil’s economic volume, and its ability to radiate outward to the regional economy, China needs to strengthen policy coordination with Brazil in the process of promoting comprehensive China-Latin American collaboration, assuage Brazil’s strategic suspicions of China, strengthen Brazil’s role as the “engine” of China-Latin American cross-regional dialogue and collaboration, and cooperate to improve infrastructure “connectivity” in Latin America, especially South America.

4

Conclusion

Since establishing diplomatic relations, the development of China-Brazil relations has shown “steady progress and gradual enrichment.” In comparison, among China’s relations with other major powers (including emerging powers), China-Brazil relations is exemplary of South-South relations with fastest development, with no obvious conflicts of interest and no major ups-and-downs. From the point of view of Brazil’s China policy, the focus is primarily on bilateral and multilateral levels, i.e., strengthening economic and trade cooperation with China and promoting the country’s economic and social development, especially in the context of the continuing economic downturn; China’s market demand and its advantages at the investment level are core demands of Brazil toward China. At the same time, at the international multilateral level, coordination, and cooperation between China and Brazil have generally achieved a win-win effect, directly enhancing the role and influence of both countries in global governance—which is why global governance cooperation has become an important “incremental item” in the multidimensional structure of China-Brazil relations, lending more international emphasis to China-Brazil relations, which in turn directly enhances the strategic level of China-Brazil relations. The cross-regional collaborative dimension is a new dimension in China-Brazil relations, which is also determined by the unique identities of China and Brazil in the comprehensive collaboration between China and Latin America. Objectively, in order to achieve China’s expected results in comprehensive China-Latin America collaboration, China needs Brazil to play the necessary coordinating role at the Latin American level, preferably as a

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hub or engine to comprehensive China-Latin American collaboration. In consideration of the complex attitude of Brazil, as reflected in the above analysis, China places relatively strong demands on Brazil in the crossregional collaborative dimension and hopes to receive a positive more response from Brazil in turn. With an eye on the future development of the China-Brazil partnership, I think there are three areas that deserve our focused attention. First, promoting sustainable development of China-Brazil trade and economics through investment. In view of the current situation, of Brazil’s industrial structure combined with the needs of China’s economic development and industrial structure optimization and upgrading, the following industries are suggested as priority areas for Chinese investment in Brazil: infrastructure, energy, agriculture, mining, the consumer durables industry, and the science and technology innovation industry. Second, in comprehensive China-Latin American collaboration, coordination with Brazil should be strengthened. Coordination between China and Brazil is crucial to the development and promotion of the comprehensive collaboration mechanism between China and Latin America, and the coordination of interests and cooperation between China and Brazil can even directly determine the vitality of the comprehensive collaboration mechanism between China and Latin America. Third, promote multi-channel public diplomacy and consolidate strategic mutual trust. Since the establishment of the strategic partnership between China and Brazil, presidential diplomacy has promoted the rapid development of relations between the two countries. With an eye to the future of China-Brazil relations, we should strengthen parliamentary diplomacy, academic dialogue, and other multichannel civic dialogue and exchange. In particular, academic dialogue is an important way to enhance the level of strategic mutual trust.

Index

A Abolition of slavery, 29, 47 African slave trade in the 19th century, 46 Agricultural expansion, 91 Amazon Committee, 112 Anti-China sentiment in Brazil, 53 Anti-Chinese propaganda, 3 Arc of deforestation, 111 Asian activism, 54 Asian roots, 30 B Belo Monte, 95, 106, 127, 147 Belt and Road Forum for International Cooperation, 143 Belt and Road Initiative (BRI), 69, 74, 120, 141, 143 BRI International Green Development Coalition, 143 Big tech, 60, 71, 75 Big tech platforms, 60, 71 Biodiversity Conference of COP15, 110, 141, 142

Bolsonaro, vii, 24, 53, 73, 80, 95, 104, 111, 151, 153, 163 alarming deforestation rates, 104 Bolsonaro’s administration, 104 Brazil’s domestic issues, 111 cutting the ME’s budget, 153 environmental and climate policies, 80 institutional dismantling, 111 nationalist declarations, 104 presidential campaign, 104 racist and xenophobic attacks, 53 support to illegal mining, 104 Brazil-China agribusiness relations, 106, 110 Brazil-China cooperation, 134, 163 Brazil-China relations, 101, 153 Brazilian agribusiness, 82, 102, 106, 111, 148 Brazilian Amazon, 83, 103, 112 Brazilian-Chinese Entrepreneurs Council (CEBC), 7, 10, 130, 164 Brazilian community, 9, 12, 18

© The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 M. H. Ueta et al. (eds.), How China is Transforming Brazil, https://doi.org/10.1007/978-981-99-3102-6

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INDEX

Brazilian companies, 7, 60, 74, 97, 123 Brazilian cultural production, 45 Brazilian culture, 10, 27, 28, 35 Brazilian environmental problems, 152 Brazilian exports to China, 103, 147, 148 Brazilian beef, 102 cattle exports, 150 cultivation of soybeans, 86 production of rice, 37 soy cultivation, 83 soy exports, 148 Brazilian history, 33–35, 37 Brazilian IP office, 75 Brazilian law firms, 75, 96 Brazilian legislation, 84 Brazilians of Asian descent, 54 Brazilian states Acre, 98 Amapá, 102 Bahia, 28, 84, 107, 128, 129 Goiás, 98 Maranhãos, 102 Mato Grosso, 81, 85, 97, 110 Minas Gerais, 27, 128 Pará, 81, 83, 90, 95, 99, 102, 106 Rio de Janeiro, 28, 44, 47, 106, 123 Rio Grande do Norte, 128 Rio Grande do Sul, 128 Rondônia, 102 Santa Catarina, 128 Tocantins, 84, 149 Brazil in China, 13 Brazil’s Ministry of Development, Industry and Commerce, 7 Brazil’s economic crisis, 53 Brazil’s legal and political system, 95 Brazil’s National Development Bank (BNDES), 82, 92, 106, 126

Brazil’s railroads, 82 Brazil’s regulatory frameworks, 80, 96 Brazil’s total imports, 164 BRICS, 23, 24, 61, 105, 165, 166 BRICS Network University, 23, 24 political dividends, 166 soft balance, 166 voice for developing countries, 167

C Center-West Integration Railway, 97 China-American cooperation Brazil’s regional influence, 167 China-Brazil cooperation expanding bilateral cooperation, 166 global and strategic impact, 166 reform the current international order, 165 South-South cooperation, 166 strategic mutual trust, 169 Win-win effect, 168 China-Brazil Earth Resources Satellite, 6, 165 China-Brazil trades, 163, 169 Brazil’s high surplus in trade, 164 Brazil’s trade geography, 164 China’s intended investment in Brazil, 164 highly complementary economic relationship, 164 China Communications Construction Company (CCCC), 83, 96, 107 China Development Bank, 109, 121–123 China EXIM Bank, 108 China in Brazil, 2, 30, 35, 36, 47 China Tropical, 32 China-Latin America Forum, 167 China-Latin American collaboration, 167, 169

INDEX

infrastructure development in Latin America, 167 China Railway Construction Corporation, 84, 96, 97 China’s Five-Year Plan, 63, 112, 142 China’s Going Global Strategy, 127 China’s entry into the World Trade Organisation (WTO), 3 Chinese central government, 108 Chinese commodities, 16 Chinese Communist Party (CCP), 104, 111, 141, 142 Chinese community, 43 Chinese companies, 65, 83, 107, 120, 131, 147, 152 internationalization, 93 Chinese culture, 28 Chinese Development Bank, 109 "Green Bond Framework" guideline, 109 Chinese diplomacy, 148, 153 Chinese firms, 60, 73, 75, 79, 93, 124 Chinese ideas, 19, 34 Chinese laborers, 45, 46, 48 Chinese laborers in Cuba, 46 Chinese law, 71 Chinese legal system, 61 Chinese Ministry of Ecology and the Environment, 109 Chinese music industry Music Market in China, 13 Chinese overseas investments, 143 Chinese products, 31, 61 Chinese Question, 37, 45 Chinese Question in Brazil, 45 Chinese republican revolution of 1911, 2 Chinese stakeholders, 99, 112 Chinese vendors, 52, 53, 55 Civil society organizations, 95, 110 Class, 37, 45, 50, 104

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COFCO Corporation, 106, 124, 154 Colonial Brazil, 28, 34 Commodities, 41, 54, 72, 82, 83, 86, 102, 110, 111 Commodity trade, 103 Communist-led revolution of 1949, 2 Communist Party of China, 141 Cooperation across Amazon countries, 112 Corruption scandals, 129 Covid-19 pandemic, 8, 9, 53, 73, 92, 98, 104, 105, 133, 164 cooperation between Butantan and Sinovac, 76 post-covid 19 economic recovery, 130 Crime, 19 Cultural conflict, 23 Cultural cooperation, 72 Cultural globalization, 3 Cultural intermediaries, 5, 23, 24 Cultural relations, 36 Cultural relativists, 21 Cultural roots, 24, 28

D Decarbonization, 133, 142 Decentralization of energy systems, 133 Deforestation, 83, 87, 106, 107, 110, 148 Amazon deforestation, 105, 108 Cerrado deforestation, 149 Democratization of international relations, 165 Developing countries, 64, 80, 103, 110, 153, 163 Diplomatic relations, 2, 7, 162, 168 Distribution of imports, 42, 50 Donald Trump’s administration, 112

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E Ecological Civilization (EcoCiv), 140, 152 E-commerce platforms, 75 Economic crisis, 53, 129 Economic development, 51, 63, 66, 102, 169 Economic globalisation, 3 Education system, 23 Emerging powers, 153, 162 Energy projects biomass, 132 Brazilian electricity sector, 123, 127 Brazil needs a national energy project, 131 electric energy, 132 energy field, 129 energy transition, 112, 129, 133 green hydrogen, 112, 132 oil exploration, 123 renewable energies, 122, 133, 142 solar energy, 122, 128, 132, 134 thermoelectric plants, 130 wind energy, 128, 132, 147 wind turbines, 128, 131 Energy sector, 101, 105, 106 Energy security, 111, 131, 166 Environmental crimes, 83, 151 Environmental policies, 142 Agenda for Sustainable Development, 145 carbon emissions, 104, 109, 142 emission targets, 109 environmental agenda, 103, 142, 145 environmental legislation, 145, 152 environmental protection, 95, 140, 151 environmental protection areas, 149 guidelines for Chinese companies, 143 Paris Agreement, 104, 145

Soy Moratorium, 112, 149, 150 Environmental violations, 95 Europe, 13, 27, 34, 44, 48, 68, 149, 150 European companies, 71, 75 European Union (EU), 61, 70, 73, 110, 119 Expatriate’s life, 22 F Federal Public Ministry, 90, 91 Ferrogrão project, 85, 90, 98, 99 Food security, 35, 102, 110, 166 Foreign Direct Investment (FDI), 119, 122, 125, 126, 144, 145, 153 Foreign policy, 54, 97, 120, 134 Freyre, Gilberto, 30, 33, 34, 38 G G20, 162, 166, 167 Geopolitical pressures, 68 Global climate change, 140, 166 global climate agenda, 108 global climate crisis, 129, 133 Global economic system, 55 Global economy, 43, 54, 59 Global environmental agenda, 153 Global financial system, 166 Globalization, 62 Global market of agricultural commodities, 45 Global renewable energy market, 130 Global South, 68, 73 Global Strategic Partnership, 162 Global system, 69, 167 Global systems of power, 46 Great Green Wall, 140 Green Development, 143 Guidelines, 96, 99, 103, 108, 112, 131, 143

INDEX

H Human rights, 73, 76, 95, 146, 147 Hydropower, 102, 105, 106, 162, 165

I Ideological differences, 163 Incomprehension, 12, 93 Indigenous communities, 88, 102, 103, 107, 111, 113 Indigenous group, 90 Indigenous Lands, 89 Inequality, 20 Informality, 42, 49, 50 Intellectual property, 52, 59 International justice, 166 International Labour Organization, 89 International system, 120, 145, 162, 166 Investments in the Amazon, 112 IP and innovation systems, 60

J Job opportunities, 133 Judiciary, 95

L Labor rights, 95 Latina America, 164 Latin American Century, 162

M Made in China 2025, 60, 66 Migratory movements, 36 migrant associations in Brazil, 52 migrant networks, 41 migrants, 4, 8, 9 migration, 4, 9, 16, 30, 47

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Ministry of Commerce (MOFCOM), 108, 109, 143 Guidelines for establishing the green financial system, 109 Ministry of Culture, 14 Ministry of Ecology and the Environment (MEE), 109, 144 Ministry of Education, 9 Ministry of Environmental Protection, 109 Guideline on "Environmental Protection in Foreign Investment and Cooperation", 109 Ministry of External Relations, 97 Ministry of Foreign Affairs, 143 Ministry of the Environment, 151 Multiculturalism, 42 Multi-ethnic solidarity, 43 Multilateralism, 54, 165 N National Agency for Land Transportation (ANTT), 90, 91 National Development and Reform Commission, 143 National electricity system, 130 P Pan-Asian Brazilian identity, 54 Patent applications, 73 Petrobras, 123, 147 Plastic City, 54, 55 Popular markets, 41, 50, 53 Post-pandemic economic recovery, 164 Prejudice, 21, 29, 36, 52 discrimination, 43, 53 racial oppression, 42 racial whitening, 48 racism, 21, 37, 48

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INDEX

xenophobia, 29 Public diplomacy, 169 R Renewable energy, 108, 112, 126, 127, 130 Renewable natural resources, 129 Rousseff administration, 150 Rousseff, Dilma, 53, 86, 97 S Science and technology cooperation, 165 Scientific cooperation, 110 Sector of high technology, 7 Sino-Brazilian cooperation Sino-Brazilian relations, 54, 129 Slavery, 45 Social development, 168 Socialist market economy, 16 Social networks, 15 Social science research, 24 Socio-economic impacts, 108 Socio-environmental impacts, 112 Socio-environmental violations, 112 Sociological issues, 76 Soft balance, 166 South-South Cooperation, 120, 145, 148 South-south relations, 54 Space cooperation, 165 Study of the social sciences, 7 Surveillance society, 18 Sustainable development, 80, 81, 99, 111, 133, 169 Sustainable eco-socialist future, 141

Sustainable growth, 133

T Technological cooperation, 8, 132, 162 Technological domination model, 60 Technology contracts, 59 Technology innovation industry, 169 Teixeira Leite, José Roberto, 1, 4, 5, 33 Temer, Michel, 151, 162 Trade relationships, 43 Transport infrastructure, 19, 80, 121 Treaty of Tientsin, 4

U Ukraine, 105, 133 United Nations, 103, 145, 166, 167 United Nations Millennium Development Goals, 166 United States (US), 4, 30, 46, 63, 68, 71, 73, 82, 103, 112, 122, 150, 164 military actions of the United States, 166

W Western music, 15 Workers’ Party, 54 World Trade Organization, 60, 68, 163, 166

X Xi, Jinping, 97, 121, 131, 162, 166