Relationship between Brazil and China lies in the shadows of a homeless trade – 05/15/2023 – World

Brazil and China have one of the most dynamic commercial relationships in the world. In just two decades, the balance of trade grew more than 20 times, reaching US$ 150 billion in 2022. These are profitable links for Brasília, which has a surplus of US$ 30 billion. However, this trade is not without risks, as the production of cattle and soy causes deforestation in the Amazon. If Beijing does not act to clean up its supply chains, the Asian giant could consolidate itself as a dumping ground for products contaminated by environmental destruction and social abuses.

In March, shortly after Brazilian President Luiz Inácio Lula da Silva (PT) was forced to postpone his visit to China due to health problems, his Minister of Agriculture, Carlos Fávaro, landed in Beijing. Accompanied by almost a hundred businessmen from the agricultural sector, Fávaro had the crucial mission of convincing China to increase its purchases of beef.

Just 24 hours later, China responded to their demands with two major decisions. On the one hand, Beijing announced the lifting of the embargo on Brazilian meat, imposed in February due to a case of mad cow. On the other hand, the phytosanitary authorities granted export licenses to four new meat factories. Thirty Brazilian slaughterhouses are now authorized to sell parts to the Asian giant, a third of which are located in the Amazon region. Another 50 are awaiting Beijing’s green light. In 2022, Brazil doubled annual beef sales to China, from US$3.9 billion to almost US$8 billion.

At the end of April, it was Lula himself, already recovered, who traveled to China accompanied by a large ministerial and parliamentary delegation. The highlight of the visit was at the People’s Palace, where Lula met with President Xi Jinping and made a series of statements about Russia’s invasion of Ukraine and the West’s international influence that caused concern in Brussels and Washington.

“Nobody is going to prohibit Brazil from deepening its relationship with China”, said Lula, who recalled that “the value of our exports to China is greater than the sum of our exports to the United States and the European Union” .

The two countries signed around fifteen agreements, in addition to a disappointing joint declaration on climate change, in which the Amazon was not mentioned once. China’s role in destroying — or saving — the world’s largest rainforest was thus ignored.

In 2022, Brazil sold US$ 90 billion in goods to China. Agri-food products accounted for 56% of that amount, making Brazil China’s largest supplier of agricultural products, with a market share of 21%.

Food security is fundamental to any country’s national strategy, but in the case of China it has an even greater significance, since the memory of the Great Famine of 1960, when between 20 and 45 million people died due to the disastrous agricultural policies of the Great Leap Forward is still fresh in Chinese minds.

So if China could, it would be self-sufficient. But you can’t. It controls just 6% of the world’s fresh water and 9% of its arable land. Two factors aggravate this unfavorable situation for the second most populous country in the world: the increase in demand for meat, which requires more resources to be produced, and the decrease in arable land as a result of rapid urbanization (in the last decade, China lost 6 % of its arable land, according to recent studies).

The agricultural product on which Beijing is most dependent is soybeans, whose production requires large amounts of water (between 1,300 and 2,300 tons of water per ton of soybeans). China uses this protein-rich legume to produce cooking oil and tofu. But the reason China imports tens of billions of dollars a year (about 85% of all the soy it consumes, according to official data) is to make meal and feed to feed its massive pork sector.

All this explains why, last year, almost US$ 40 billion of Chinese purchases from Brazil were of soy and meat. This trade would be an example of win-win cooperation, in the jargon of Chinese diplomacy, were it not for the fact that it is not known exactly how much of this soy and, above all, this meat is free from deforestation. Research by Trase indicates that 230,000 hectares of Brazilian rainforest are at risk due to the destruction caused by Chinese demand for soy.

The situation in the livestock sector is even more worrying. Studies show that cattle mafias are responsible for most of the deforestation in the Amazon, which continues at record levels in the Lula administration. This is because these mafias, which claim to be mere associations of cattle ranchers, appropriate areas of public forests, cut down and burn the forest, falsify registration documents and then form pastures to produce cattle.

This predatory process of illegal appropriation of public property is known in Brazil as grilagem. It also involves violence and expulsion of small farmers and indigenous communities. For those who oppose him, the law of the trigger awaits. It is no coincidence that the Brazilian Amazon is the region on the planet where the most environmentalists have been exterminated in the last decade. According to Global Witness, 290 activists have been killed since 2012 in the Amazon alone.

As the largest buyer of Amazonian commodities, Chinese state-owned agribusiness companies that operate on the ground to secure their soy supply can implement transparent mechanisms to ensure product traceability and keep environmental mafias out of the market.

Is this possible. The EU is ready to implement a law that obliges companies selling in the common market to prove that commodities such as palm oil, soy and meat were not produced on land cleared from 2020 onwards. US and Japan follow Europe’s example and apply similar laws.

Xi Jinping must also pressure Lula to fulfill his election promise to eradicate illegal deforestation by 2030. China must also contribute to the Amazon Fund, created by Lula in his previous government to receive funds for costly operations to preserve the forest. Norway and Germany have already donated hundreds of millions of dollars, while the US and UK pledged in May future contributions of US$500 million and US$100 million, respectively.

Many overseas Chinese projects have a common pattern: low standards and bad practices. Its impact on the Amazon, where China prioritizes its food security, is direct and dire. Therefore, it is necessary to demand that Beijing take action.

The alternative is to continue to ignore the problem and, through massive purchases, encourage a criminal economy that destroys the environment and inflicts suffering on local populations. As in many other regions of the world, China’s credibility is at stake in the Amazon. Recognition of China as a responsible power or as a mere autocracy that only pursues its own interests depends on its performance.