Brazil loses space to China in South America

Brazil is a country with a disproportionate size in relation to its neighbors, especially in economic terms. The result of this is that the country ends up playing “of course” a gravitational force, making other South American countries end up having their economies very dependent on the Brazilian economy.

This condition was no different even when we considered the other major economy in the region: Argentina. Historically, the Argentines had in Brazil the main destination for their exports. In September and October 2019 China held this primacy, being the main destination for Argentine exports. It was for a small difference and it only lasted these two months, what appeared to be something transient.

But reality is pointing the other way.. April numbers, May and June show that China occupied space in a more structural way. while in 2019 the difference between exports to Brazil and China did not reach the USD 75 millions, now the difference each month exceeds the USD 175 millions.

In large part this change can be explained as a consequence of the Covid pandemic., since almost 40% of trade between Brazil and Argentina is linked to the automotive sector. Even so, shows that China is growing in relevance and, about everything, presence in the region. And more, is a reality that is here to stay.

Commerce is only part of the story, and not always the most important. China and Argentina partnerships are expanding into different sectors, like the military (as seen by the Chinese space observatory set up in the province of Neuquén). Looking at these other dimensions is important for us to realize that this is not just a business relationship on the rise, but the increased Chinese presence in the region.

The direct consequence of this is that Brazil, previously regarded as China's preferred partner in the region, is losing relative space. Argentina starts to stand out as another. This movie has been seen before, in Africa. There, China has been expanding its relevance as a trading partner and in other areas, and now it has an undisputed relevance on the African continent.

The same should happen in South America. Chinese presence will grow non-stop, mainly because it's starting with the biggest. Being relevant to smaller countries is easier and faster.

It's not about expelling the Chinese or starting a xenophobic movement. But it is necessary to be clear about this almost inexorable growth, so we can rethink our strategies. China must not be treated as an enemy, but as a partner in building a new structure of world powers. both, we need to improve our bilateral relations, today so contaminated by rational ideologies. At the same time, we have to better use multilateral means to institutionalize international tensions, being, in this case, the BRICS space as the most suitable.

originally published in World map (www.mapamundi.org.br)