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Brazil edges closer to China’s Belt and Road. Why now?

Signals from Brasília suggest the country may finally sign up to the Chinese initiative, as Lula’s government weighs up economic benefits, infrastructure goals and strategic gains. 

Chinese leader Xi Jinping and Brazilian president Luiz Inácio Lula da Silva at a welcoming ceremony in Beijing, April 2023. During a four-day Brazilian state visit, the two countries signed 15 agreements, but none mentioned the possibility of Brazil joining the Belt and Road Initiative (Image: Ricardo Stuckert / Palácio do PlanaltoCC BY)

As China’s Belt and Road Initiative enters its second decade, the country appears on the verge of persuading Brazil to make the significant decision to finally sign up to its flagship overseas investment programme.

Recent statements by Brazilian President Luiz Inácio Lula da Silva have heightened speculation that the country will join the vast infrastructure initiative. So, what has changed, and what would this mean for Brazil, China, and the region’s politics and economics?

Launched in 2013, the Belt and Road Initiative (BRI) has been championed by Chinese leader Xi Jinping as a scheme to create modern trade routes that echo the historic Silk Road. Having greatly expanded the international presence of Chinese companies and finance, the BRI has been seen as a strategic endeavour to increase China’s global influence, while officials have sought to cultivate a narrative of enhancing economic, political and cultural ties among its members.

Originally intended to link Asia and Europe through Africa and the Middle East, the initiative expanded to Latin America in 2017. China has invested in nearly 150 countries, including 22 in Latin America and the Caribbean, with total commitments passing the USD 1 trillion mark in the first half of 2023. These investments have primarily taken the form of loans and contracts for major infrastructure projects, such as power plants, roads, airports, seaports and dams.

Following a period of hesitance under presidents Michel Temer (2016-2018) and Jair Bolsonaro (2019-2022), Brazil – with its abundant resources and important position within South America – has once again come to the fore in discussions of the BRI.

“Brazil has understood for a very long time that it’s a key partner for China in Latin America, regardless of its decision to join the Belt and Road Initiative,” says Margaret Myers, director of the Asia and Latin America Program at the Inter-American Dialogue. “It’s been a top destination, if not the top destination, for Chinese investors. This is unlikely to change.

“At the same time, Brazil views itself in many ways as like China – an emerging power,” she adds. “I don’t know if joining the BRI would have, in some form, diminished Brazil’s own views of its interests in the region and globally, but that’s potentially one consideration.”

Lula’s return a key factor

While Brazilian diplomats have remained sceptical of the benefits of BRI membership, speculation that Brazil might sign a memorandum to join the initiative has steadily grown since Lula returned as president at the start of 2023.

Recent visits to China by Lula and his vice president, Geraldo Alckmin, took place without any announcement on the Belt and Road. However, during an event in July, Lula did suggest Brazil might join: “As China is interested in discussing the Silk Road, we need to prepare a proposal to discuss what’s in it for us,” he said. “What advantages does Brazil stand to gain from participating? What significant role will Brazil play?”

With Xi set to make a state visit to Brazil for the G20 conference in Rio de Janeiro in November, and the two presidents also meeting that month at the Asia-Pacific Economic Cooperation (APEC) summit in Peru, Chinese officials are keen to seal the deal during the 50th year of Brazil-China relations.

“There is a different perspective between the president’s inner circle and the foreign ministry,” says Pablo Ibañez, geopolitics professor at the Federal Rural University of Rio de Janeiro. “Lula knows the value of growing relationships with the Global South and prefers to foster relations outside of the axis of the United States and Europe.”

Ibañez says the foreign ministry “is very concerned about the implications”, however. He adds: “What can we gain from it? Could it bring reprisals from the United States? The Belt and Road is another stage in the expansion of Chinese global power. It is enormous, and it is fundamental to the Chinese government.”

President Lula hosts a meeting with Chinese foreign minister Wang Yi at the Fortaleza air base in Brazil’s north-east. Experts say Brazil is hoping to boost cooperation between the two nations in areas beyond commodity exports, the key driver in cementing China’s position as its top trading partner for the last 15 years (Image: Ricardo Stuckert / Palácio do PlanaltoCC BY-ND)

According to experts interviewed by Dialogue Earth, Brazil is carefully weighing the potential benefits of joining in an attempt to extract maximum leverage from China’s negotiators.

“A few years ago, I believe Brazil did not have a clear understanding of the strategic reasons for joining the BRI,” says João Cumarú, a researcher at Plataforma CIPÓ, a climate and foreign affairs NGO. “Now, however, some members of Lula’s government are beginning to think strategically about what Brazil should ask for in return for its involvement.”

The specifics are uncertain, but specialists say Brazil is likely looking for support that goes beyond the export of commodities to China and the import of finished goods in return.

China has been Brazil’s largest trading partner since 2009, with bilateral trade between the nations reaching USD 80 billion in the first half of 2024, according to Brazilian foreign trade data. But around 80% of Brazil’s exports to China consist of just three items: petroleum, iron ore, and soybeans.


Last year, during his visit to Beijing, Lula signed 15 agreements, including on space technology, renewable energy, climate cooperation, electric mobility, and green finance.

Cumarú believes there are three key areas in which Brazil should aim to seek benefits from BRI membership: “Green energy and technology cooperation, particularly in the context of the energy transition; reindustrialisation efforts that look to add value to our commodities by interpreting Chinese technologies for land recovery and sustainable practices, and infrastructure projects planned by the government, particularly as they pertain to integrating South America [into] various transport routes.”

The researcher added that, during his conversations with Brazilian government figures, engaging with China on finance has been another topic of particular interest. “They were looking into how the Chinese could finance part of the federal government’s new industrialisation, ecological transformation, and energy transition programmes. At that time, there was an initial idea that the BRI could be a financing avenue for these projects.”

A changing Belt and Road

The BRI has evolved significantly since its early days, and Chinese leadership has signalled a desire to pivot the initiative towards a focus on “small but beautiful” diversified investments in green or innovation sectors, rather than the large infrastructure projects emblematic of its first decade.

“China is struggling with how to define the BRI in this new phase,” says Myers. “We’re not going to be seeing the same degree of large-scale infrastructure development as in the past.”

On the Brazilian side, things are also complex. Potential investments from China in electric vehicles in Brazil, for example, have raised concerns within the domestic industry, Cumarú says.

However, it would be unwise to rule out the possibility of a large infrastructure investment to seal the deal, the experts suggest. Brazil faces a significant shortfall in infrastructure investment, with a World Bank report suggesting the country needs to allocate USD 778 billion to close this gap by the 2030 aim of the United Nations’ Sustainable Development Goals.

Last year, Lula announced a new Growth Acceleration Program (PAC) to spend BRL 1.7 trillion (roughly USD 300 billion) on infrastructure, energy and transportation over four years.

“China is trying to elevate this to a new level of negotiations,” says Ibañez. “The Chinese ambassador in Brazil recently gave an interview to CNN Brasil, discussing the importance of investment in Brazil and the region. He mentioned that China could help Brazil with the PAC. This indicates that Brazil’s involvement in the Belt and Road is increasingly becoming a reality.”

Another point of interest is the long-mooted Central Bi-Oceanic Railway Corridor, a proposed 3,750-kilometre railway linking the Pacific Ocean to the Atlantic Ocean through Peru, Bolivia, and Brazil. “I’ve heard rumblings lately that this project is still being considered and is being discussed in relation to the Chancay port development, so it is not dead,” says Myers. The Chancay port in central Peru is one of the largest investments to arrive in Latin America under the BRI, and is set to be inaugurated in November, at a ceremony likely to be attended by both Xi and Lula.

Chinese financing of the proposed railway would align well with Lula’s objective for greater integration among South American countries, led by Brazil. Last year, he launched the “Five Routes” initiative to better connect Brazil to its neighbours, allowing increased trade within the continent.

“Why now is a good question,” says Myers. “I don’t know if there’s some project that they’re trying really hard to get China to support at this particular moment. Brazil is hosting the G20; it might be that this is a moment for both countries to demonstrate a strong relationship.”

That said, there is a risk of over-interpreting the symbolism of such an announcement, she believes. “In my view, [joining the BRI] is primarily symbolic in nature, representing a degree of support for China’s global agenda and for China’s growing global role and vision.

“Sometimes, when countries join the initiative, there are agreements that are announced in tandem. But these tend to be one-time agreements,” Myers added. “It’s not as though we see an explosion of overall economic activity before or following the decision to join the BRI. We generally do not see a major shift in the overall dynamic pre- and post-BRI membership.”

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