On Thursday, former Brazilian President Luiz Inacio Lula da Silva visited China, where he made some critical remarks about the US dollar and the International Monetary Fund (IMF). To fund trade between Brazil, China, and other BRICS countries, Lula has advocated for a currency that would eliminate the need for the US dollar as a middleman. Additionally, this comes after Lula recently announced an agreement with Beijing to trade in their own currencies instead of the US dollar. Furthermore, he criticized the International Monetary Fund, stating that no bank should be strangling countries’ economies the way the IMF is doing to Argentina with its severe spending cuts.
Brazil’s Repositioning
After four years of virtual isolation under his far-right predecessor, Jair Bolsonaro, Lula hopes to reestablish Brazil as a prominent participant on the world stage and strengthen connections with its largest economic partner, China. Lula will meet with Chinese President Xi Jinping on Friday in an effort to forge more amicable international ties between the two countries.
Business ties
In the tens of billions of dollars, China is Brazil’s largest export market for commodities, including soybeans, cattle, and iron ore. With the March currency accord in place, the US dollar is no longer required for the massive economic and financial activities between Brazil and China. After Dilma Rousseff’s inauguration as president of the New Development Bank, Lula met with the CEO of BYD, China’s largest electric carmaker. BYD aims to build up a vehicle manufacturing unit in Bahia, in northern Brazil.
Wars in Ukraine
The conflict in Ukraine is likely to be a central focus of Lula and Xi’s encounter. Despite Western concerns that they are too cozy with Russian President Vladimir Putin, both countries have positioned themselves as mediators in the dispute. Additionally, they have declined to join Western nations in slapping sanctions on Russia for its incursion.
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