New Silk Road not attractive enough: Brazil doesn’t want to join

It must have been a bitter disappointment for China’s head of state Xi Jinping: he had just celebrated the Brics community of states, the organization of emerging economies co-founded by both countries, in the Russian city of Kazan with Brazilian President Lula da Silva. Less than a week later, Lula’s chief foreign policy advisor Celso Amorim announced that Brazil would not join the new Silk Road, Xi’s major foreign policy project.

An agreement on Brazil’s membership in Xi’s intercontinental trade and infrastructure network was to have been ceremoniously signed by the two heads of state in Brasilia in mid-November, marking the 50th anniversary of diplomatic relations between the two countries. But Brazil apparently came to the conclusion that accession would not bring the country enough. A delegation led by Amorim recently returned from Beijing “unconvinced and unimpressed” by the Chinese offers, it is said.

Brazil will not only supply raw materials

While China is primarily interested in raw material deliveries from Latin America, Brazil does not want to be a pure raw material supplier for China, but also wants to be able to deliver semi-finished and finished products to the Middle Kingdom. Lula is also aware that he can get the most out of his country by maintaining a healthy equidistance from the West and China. This allows the two blocs to play off each other when it comes to loans and foreign investments.

Brazil’s departure is symptomatic of the declining star of the Belt and Road Initiative. The three largest countries in Latin America remain outside. Mexico, which is economically aligned with the USA, is also not represented and Argentina, which has actually been a member since 2022, has put cooperation under President Milei on hold.

The initiative has also stalled on other continents. India, also a founding member of Brics, also does not want to join and explains it similarly: The initiative does not offer the country’s companies appropriate competitive conditions. Italy, the only G-7 country to join the project, announced its withdrawal last year. Giorgia Meloni also justified the move with the lack of benefit for Italy. Many smaller countries are also unable to repay the loans to China. If China saves them from default, it will bind them even more tightly.

China remains a security risk for the West

However, it would be wrong to downplay China’s influence in Latin America because of Brazil’s rejection. 22 countries in Latin America and the Caribbean are also members of the Silk Road Initiative. The volume of trade between Latin America and China has increased from $12 billion in 2000 to $489 billion. China is now the most important trading partner and a major lender for the region south of the Panama Canal.

Chinese influence has also become a military security risk for the USA, as the outgoing head of the US Southern Command, which is responsible for the region, General Laura Richardson, emphasizes. Especially gold-plated stamps for Panama and Peru. In Panama, the two ports at either end of the canal are under de facto Chinese control. They are managed under a long-standing concession by a Hong Kong company that must carry out orders from the Chinese government.

In Peru, the mega deep-sea port of Chancay, built by the Chinese and managed by them in the future, will open this month. This can be used for both civil and military purposes. The Chinese Navy could use it in the future. Peru made itself vulnerable to blackmail by leaving the entire power supply for the capital, Lima, in Chinese hands. To counter China’s influence in the region, Richardson has called for a Marshall Plan for Latin America.