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Economy in Mind, Bolsonaro Changes Tack and Cozies Up to Xi

Associated Press

   BRASILIA, BRAZIL - What a difference a year makes.

   In the months before last year's presidential election in Brazil, Jair
   Bolsonaro described China as predatory and thumbed his nose at the
   Chinese government by visiting Taiwan, Beijing's archrival.

   Now, as a more pragmatic president, Bolsonaro welcomed Chinese
   President Xi Jinping to an international summit that begins Wednesday
   in Brasilia, the capital.

   The first item on the agenda for Bolsonaro, a far-right leader who has
   sometimes tried to hang the communist label on his political rivals in
   Brazil, is a bilateral meeting with Xi.

   He received Xi at the foreign relations ministry with smiles and
   handshakes, and the two signed a handful of memoranda. It's a sign of
   how Bolsonaro views China as critical to his ambitions to rejuvenate
   Brazil's sluggish economy.

   "China is an ever greater part of Brazil's future," Bolsonaro said in
   speech after the two leaders met, adding his government will devote due
   care, respect and consideration to China.

   Gone is last year's fiery campaign trail rhetoric about China being a
   rapacious power intent on exploiting Brazilian resources.

   China is, after all, Brazil's biggest trading partner.

   As China expanded rapidly in the 2000s, eventually becoming the world's
   second largest economy, it relied on commodities from producers.
   Brazil, Latin America's largest economy, shipped soybeans, iron ore and
   crude to satisfy China's expanding appetite. Those three products
   account for more than 80% of Brazil's exports to China.

   Bolsonaro said his government wants to diversify exports to China, and
   welcomed a signal from China's government that it wants to help Brazil
   add value to output.

   Xi's visit for a meeting of leaders of the BRICS emerging economies --
   Brazil, Russia, India, China and South Africa -- is his first to Brazil
   since 2014.

   But his relationship with Bolsonaro already has been blossoming.

   Just last month, Bolsonaro traveled to Beijing for economic and other
   accords, including the exemption of Chinese nationals from Brazil visa
   requirements. Xi received him at his car and they walked side-by-side
   on a long, red carpet.

   "Bolsonaro discovered how important China is to Brazil and that he can
   do business with China. And he's more or less happy with that," said
   Mauricio Santoro, professor of international relations at Rio de
   Janeiro's state university.

   Before he became president, Bolsonaro praised the U.S. and President
   Donald Trump. He often said China can buy from Brazil, but not buy
   Brazil itself -- rhetoric that continued for a while after he took
   office Jan. 1.

   The hostile remarks didn't last, though.

   Brazil is dependent on foreign investment, especially from China.

   Confirmed Chinese investments in Brazil between 2007 and 2018 totaled
   almost $60 billion, more than any other Latin American country,
   according to the Brazil-China Business Council, a Brazilian research
   center.

   Investments faltered in 2018 ahead of Brazil's election, part of a
   broader decline stemming from investor caution.

   After Bolsonaro won the presidency, he took his first trip abroad to
   the U.S., then in the midst of a growing trade dispute with China. But
   Brazil didn't get caught in the middle.

   "Brazil has all the reasons to work with both countries and not pick
   sides," said Pepe Zhang, associate China director at the
   Washington-based Atlantic Council. "So far, it's doing a good job."

   In August, amid Western criticism of Brazil's handling of fires raging
   in the Amazon, China defended Brazil's sovereignty over the region.
   Bolsonaro on Wednesday described China's support as "a grand gesture
   that strengthened us a lot."

   Xi said China intends to increase trade and investment, and will eye
   opportunities for cooperation in areas including agriculture,
   electricity, oil, and infrastructure.

   "China is willing to work together with Brazil to promote exchange
   based on equality and mutual trust," Xi said.

   As Brazil-Chinese diplomacy advances, there are delicate issues to
   navigate.

   The U.S., for example, is pressuring the Brazilian government to
   exclude Chinese telecommunications giant Huawei from its auction next
   year to provide a 5G network.

   The U.S. State Department says that Huawei poses cybersecurity risks
   and that it will review the way it shares intelligence about Venezuela
   with Brazil if Huawei is allowed to provide 5G service.

   The U.S. and Brazil consider Venezuelan President Nicolas Maduro to be
   illegitimate and want him to resign.

   China, eager for repayment of the billions of dollars in oil-backed
   loans it extended to Venezuelan President Nicolas Maduro's socialist
   administration, continues to support his regime.

   Bolsonaro knows he won't find common ground with Xi on Venezuela when
   they meet, and will likely focus on luring more Chinese investment and
   trade, said Santoro, the international relations professor.

   Bolsonaro, a fringe lawmaker until his campaign, earned the nickname
   "Trump of the Tropics" for his rejection of politically correct
   discourse, and many of his supporters came to see him as a crusader
   willing to impose morality on a political system rife with corruption
   and a society suffering from violent crime.

   One of his main challenges is boosting economic growth, with Brazil
   headed toward its third year of subdued activity after two years of
   deep recession. He handed the reins of economic policymaking to a
   University of Chicago-trained economist who is taking steps to improve
   business conditions, reduce trade barriers of Brazil's protected
   market, and carry out a vast privatization program.

   Some Brazilians were concerned that Bolsonaro as president would assume
   a "bipolar vision of the world" and closely align with the U.S. at the
   expense of China relations, said Jose Pio Borges, president of Cebri, a
   Brazilian research center that studies China.

   "Now, after all these reunions and initiatives, it's clear that Brazil
   wants to have relationships with everyone," Borges said.