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Brazil rejected China’s Belt and Road Initiative (BRI) ahead of Xi Jinping’s state visit last month but still managed to secure dozens of trade deals and upgrade its bilateral relationship with China.
Despite being China’s most significant partner in the region for trade and investment, Brazil remains one of the very few Latin American countries that has not yet joined the BRI. Brasília’s decision to decline membership provides further proof that the initiative is more rhetoric than substance.
“Joining” the BRI means signing a memorandum of understanding (MOU) with China on jointly constructing the initiative—a non-legally binding agreement with no official process or concrete obligations. Signing this MOU is simply a symbolic endorsement of China’s global leadership and, for a country as important to China as Brazil, an unnecessary concession.
A decade since its launch, commentators and policymakers in Latin America and elsewhere still tend to misinterpret the BRI as a monolithic, centrally coordinated blueprint for global development. In doing so, they risk overestimating the initiative and clouding their judgement on cooperation with China.
In reality, the BRI is a loosely organised and disparate bundle of projects attached to a narrative and brand. It is so vast and amorphous that it is meaningless as anything but a synonym for global China.
The BRI is geographically limitless, technically encompassing around 80% of the United Nations, and it is designed to touch upon every realm of human endeavour, from “film festivals” to “nuclear power.” There is little institutional reality to the BRI – no blueprint, project pipeline, official definition of what constitutes a BRI project, nor mechanism for meaningful international coordination. Rather than plotted according to some grand strategic plan in Beijing, projects are mostly unconnected and picked from host-country wish lists according to the interests of Chinese firms.
Although the initiative theoretically encompasses everything from arctic sea routes through to archeological digs, Beijing’s highest BRI-related expenditures have been related to infrastructure projects such as Coca Codo Sinclair dam in Ecuador, Chancay’s mega-port in Peru, and Bogota metro in Colombia.
BRI infrastructure projects are often financed by loans from Chinese policy banks, the majority of which are tied to the procurement of goods or services from China. The BRI is a fundamentally mercantilist endeavor – it is driven by geopolitical aims, but Chinese firms are the BRI’s engines.
The tied-loan model was not invented with the BRI in 2013. Beijing’s “Going Out” policy at the turn of the century already involved tied loans and, like the BRI, sought to find better returns on China’s massive foreign exchange reserves while channeling capacity overseas.
Beijing’s innovation with the BRI in 2013 was to bring these efforts under a single brand label and articulate it as a new, positive narrative. Financial support for Chinese exports was spun as a bid to revive globalization in the aftermath of the 2008 financial crisis, advertising a vision of China-centric global development.
The BRI is in large part, but not exclusively, an offer made from a self-styled developing country to other developing countries—from China to the Global South. BRI lending peaked in 2016, but it remains a rhetorical and propaganda pillar of Chinese foreign policy and key to Beijing's mission of winning over the Global South.
The BRI is pitched as an offer of Chinese-led development to the world, and as part of a wider Chinese bid to shape the post-Western international order. Therefore, governments in Latin America should be aware that BRI’s mission is to strengthen economic ties in the Global South while gathering political support for its global vision. The risk is falling into China’s geopolitical orbit.
In fact, the BRI is narrative cover for the same mercantilist policies China has pursued for decades, and this should give policymakers pause for thought when engaging with the initiative. Signing onto the BRI does not guarantee investments per se, will not alter any economic fundamentals or attract new economic corridors – doing so will just brand existing cooperation as part of the BRI.
This explains why so many countries are often disappointed when engagement with the BRI is not transformative. Italy formally withdrew from the BRI late last year. It did so partly because trade and investment remained unaffected by Rome’s 2019 gambit to become the first G7 country to join. Leaving the initiative altered Italy’s economic relationship with China just as much as joining did — that is, not at all.
For a country as important to China as Brazil, joining the BRI would change little. The argument for smaller countries to sign up is slightly more compelling. President Gustavo Petro's administration decided this October that it would sign Colombia up to the BRI. If Colombia follows through with the announcement, it will become the 23rd of 33 countries in Latin America and the Caribbean to do so. Besides the 7 countries that are allies of Taiwan, Brazil, Mexico, and the Bahamas are the only countries that have not yet joined.
Did the countries that joined receive better economic treatment from China for doing so? Participating in the BRI does not itself lead to investment, access to finance, or improved trade with China, but being vocal about the BRI sends a signal of fealty to Beijing. This matters to some extent – politics can override commercial logic in a Leninist Party State and Beijing uses both economic coercion and reward to incentivize support for its positions.
However, policymakers in Latin America should be clear-eyed about what participation in the BRI entails. The wider BRI is an illusion – short-hand for everything China does in the world tied to a narrative about Beijing’s global vision for joint-prosperity.
Endorsing Chinese concepts like the BRI is a signal of fealty that does not guarantee reward and projects branded under the BRI umbrella should be assessed individually and according to their own merits.
