Asian Perspective

Abstract:

In this article we explore the political economy of Chinese outward foreign direct investment (COFDI) in Brazil, and the impact of investment and other economic links on Brazilian foreign policy toward China. The warming of Brazil’s relations with China after 2003 had much to do with the perceptions of then president Luiz Inacio Lula da Silva, who was particularly impressed by the astounding growth of bilateral trade and believed the two countries shared a similar level of socioeconomic development. Lula’s domestic political challenges, the country’s prioritization of South-South relations, and some institutional changes further reshaped Brazil’s stance toward China. Unlike bilateral trade, Chinese investments did not exert a powerful influence on Brazilian policy toward China, though expectations of greater COFDI did have some impact.