Brazil’s Lula Meets Xi in Beijing, Calls for End to Dollar Dominance

Facts

• On Friday, Brazilian Pres. Luiz Inácio Lula da Silva met with his counterpart, Xi Jinping, on the second day of his state visit to China — the South American country's largest trading partner. In Beijing, both attended the signing of bilateral agreements ranging from agriculture to aerospace.¹
• As reported by Chinese state media, the two leaders mainly discussed expanding trade ties and other steps to promote Sino-Brazilian cooperation, but also addressed the Ukraine war and agreed on a negotiated settlement as the only viable way to end the conflict.²
• According to Brazil's presidential office, the agreements also included the launch of direct trade transactions between both countries in yuan, bypassing the US dollar, and the production of a sixth jointly-produced satellite to monitor the Amazon rainforest.³
• During a speech in Shanghai a day earlier, Brazil's leftist president questioned the global dominance of the US dollar and urged the BRICS group of nations — comprising Brazil, China, Russia, India, and South Africa — to develop their own currencies to settle international trade operations.⁴
• Lula made the remarks as he attended the inauguration of the former Brazilian Pres. Dilma Rousseff to be the head of the Shanghai-headquartered New Development Bank, which has $100B in capital and was founded in 2014 by the BRICS member states.⁵
• In his speech, Lula also criticized the International Monetary Fund (IMF), which he claimed is 'asphyxiating' the current Argentine economy with its lending conditions, the way it previously did with the economies of developing countries around the world and Brazil.⁶

Sources: ¹Associated Press, ²Al Jazeera, ³La prensa latina media (a), ⁴Ft, ⁵La prensa latina media (b) and ⁶France 24.

Narratives

• Pro-China narrative, as provided by Global times. The China summit between Lula and Xi is a powerful demonstration of the BRICS countries' growing self-reliance and the ongoing transition to a multipolar era. This is also underscored by the fact that China and Brazil have already agreed to facilitate bilateral trade in their national currencies — striking another blow against 'dollar hegemony' and the declining US. The future belongs to the Global South, and in tackling challenges such as extreme poverty, and reindustrialization, Brazil will benefit enormously from China's experience.
• Anti-China narrative, as provided by China relations – the diplomat. While Lula's China trip may, on the surface, signal a recovery in Brazilian-Chinese ties, it is ironically the PRC-dominated BRICS that could emerge as the arena of competition between them. Lula faces the difficult task of maintaining a balanced stance towards Washington and Beijing while advancing regional integration. Moreover, parts of the Brazilian public are concerned that further integration with China could lead to socioeconomic drawbacks. Despite all the mutual expressions of sympathy, the future of bilateral relations is uncertain, and an anti-Western power bloc is suspect at best.