In an era of intensifying major power competition, China’s diplomatic engagement with commodity-rich nations has emerged as a cornerstone of its global strategy.

The contrasting yet complementary approaches Beijing has adopted toward Brazil under President Luiz Inácio Lula da Silva and Australia under Prime Minister Anthony Albanese reveal a sophisticated framework for securing access to critical raw materials while building resilient political relationships.

Both countries represent major suppliers of essential commodities to China’s economy, and both are led by center-left governments that have maintained critical stances toward certain U.S. policies while embracing China’s economic partnership model.

China’s Engagement with Brazil

China’s relationship with Brazil represents perhaps the clearest example of its commodity-rich country strategy. The economic dimensions of this partnership are staggering: China has been Brazil’s top trading partner since 2009, with bilateral trade reaching $152.8 billion in 2022 and growing to approximately $160 billion by 2024. This represents a 37-fold increase since President Lula’s first term began in 2003, demonstrating the sustained momentum of the relationship across different political cycles.

The relationship’s institutional foundation runs deep. China designated Brazil as its first official “strategic partner” in 1993, later elevating this to a “global strategic partner” in 2012. This progression reflects China’s recognition of Brazil’s significance not merely as a commodity supplier, but as a key player in shaping its increasing dominance of the BRICS organization.

The relationship reached new heights in November 2024, when China and Brazil decided to elevate their ties to a “community with a shared future for a more just world and a more sustainable planet.” This designation, typically reserved for China’s most important partnerships, signals Beijing’s view of Brazil as central to its vision of a multipolar world order guided by Global China.

The economic structure of this partnership reveals China’s strategic priorities. Brazil exports $91.26 billion to China, primarily soybeans and mineral products, while importing $61.5 billion in manufactured goods. This trade pattern, raw materials flowing to China in exchange for value-added products, reflects a broader pattern in China’s commodity diplomacy, though Chinese and Brazilian officials have explicitly discussed moving toward higher value-added exchanges.

China’s engagement with Brazil operates through multiple multilateral platforms including BRICS, G20, and various South-South cooperation mechanisms. This multilateral dimension serves China’s broader strategy of positioning itself as a champion of the Global South while providing Brazil with platforms to assert its own leadership ambitions. This is a key part of the Global China strategy.

Lula’s foreign policy philosophy of “active nonalignment” aligns well with China’s preference for partners who maintain strategic autonomy from U.S.-led alliances. This convergence allows China to present itself as respecting Brazil’s sovereignty while building a Global China-led world order.

China’s Approach to Australia

China’s relationship with Australia under Prime Minister Anthony Albanese presents a more complex case study in commodity diplomacy. The relationship had reached its nadir during the period from 2020-2022, when diplomatic communications were frozen and trade restrictions affected AUD 20 billion in Australian exports. However, since Albanese’s election in 2022, both countries have pursued a deliberate stabilization strategy.

The year 2024 marked a turning point, with the lifting of the final trade restrictions that formed part of Beijing’s campaign of economic coercion against Australia. Live rock lobster exports, the last commodity subject to punitive trade actions, resumed in mid-December. This gradual removal of trade barriers signals China’s willingness to compartmentalize economic and political issues when dealing with strategically important commodity suppliers.

Despite ongoing tensions over AUKUS, the Quad partnership, and Australia’s military exercises in the South China Sea, Chinese President Xi Jinping acknowledged that China-Australia ties had “risen from the setbacks” during Albanese’s July 2025 visit to Beijing. This language suggests a deliberate Chinese strategy to focus on economic cooperation while managing rather than eliminating security disagreements.

China’s renewed engagement with Australia occurs in a broader context of U.S.-China trade tensions. Chinese officials have expressed interest in expanding the decade-old Australia-China Free Trade Agreement and pursuing cooperation in emerging technologies like artificial intelligence. China is seeking to capitalize on uncertainties in U.S. trade policy by positioning itself as a stable and reliable partner for key commodity suppliers.

The approaches to both Brazil and Australia must be understood within China’s comprehensive strategy for securing access to critical raw materials. China initiated raw materials diplomacy at the end of the 1990s, encouraging state and private companies to go global in selected targeted sectors. This strategy is based on the Belt and Road Initiative and revolves around acquisitions, stakes in mines, or the provision of infrastructure in exchange for exploitation of raw materials.¹¹

China’s success in this area is remarkable. Today, it refines 68% of the world’s nickel, 40% of copper, 59% of lithium, and 73% of cobalt. This control over processing capabilities creates dependencies that extend far beyond simple bilateral trade relationships, as many resource-rich countries lack the capacity to refine their own raw materials.

Both the Brazil and Australia cases demonstrate China’s strategic patience and adaptability. The approach allows Beijing to weather political changes in partner countries while maintaining long-term economic relationships.

This patience proved crucial during the Bolsonaro administration in Brazil and the Morrison government in Australia, both of which adopted more confrontational approaches toward China.

Both relationships feature robust institutional dialogue mechanisms designed to provide stability during periods of tension. These range from high-level strategic dialogues to sector-specific cooperation mechanisms. The institutionalization of these relationships creates predictability and continuity that survives changes in government.

China leverages multilateral platforms to strengthen bilateral relationships while advancing its broader strategic objectives. With Brazil, this occurs through BRICS, G20, and various South-South cooperation mechanisms. With Australia, China has sought to use platforms like the G20 and ASEAN-related forums to maintain engagement even during periods of bilateral tension.

The Australia case highlights the limitations of China’s commodity diplomacy when it encounters fundamental security concerns. Australia’s AUKUS commitments and alliance with the United States create ongoing friction that pure economic incentives cannot fully overcome. The Darwin Port lease controversy, where Australia is reviewing a Chinese company’s 99-year lease of a strategic port, exemplifies these tensions.

Both relationships face domestic political constraints that limit their scope. In Australia, public opinion toward China remains generally negative despite improved government-to-government relations. In Brazil, while the relationship enjoys broader support, there are concerns about over-dependence on Chinese markets and the need for greater economic diversification.

The intensification of U.S.-China strategic competition creates pressures on both Brazil and Australia to make difficult choices about their international alignments. The return of Donald Trump to the U.S. presidency adds another layer of uncertainty, as both countries must navigate between their economic interests with China and their broader strategic relationships.

China’s success in building these relationships has significant implications for global commodity markets. The combination of China’s processing capabilities and its strong relationships with key suppliers creates a form of market power that extends beyond traditional measures of economic influence.

The concentration of critical mineral processing in China, combined with its strong relationships with major suppliers like Australia and Brazil, creates potential vulnerabilities for other countries seeking to develop their own supply chains. This has prompted responses from the United States and European Union to develop alternative supply chains and reduce dependencies on Chinese processing capabilities.

China’s engagement with Brazil and Australia reveals a key element of the Global China strategy for reshaping the “rules based” order.

The Brazil relationship provides China with a comprehensive partnership that spans economic, political, and strategic dimensions. The Australia relationship demonstrates the approach’s resilience and adaptability, showing how China can rebuild relationships even after significant crises.

But as Global China meets the rethinking by the United States and Europe of their relationship with China, China’s commodity diplomacy will face increasing challenges from countries seeking to reduce their dependencies and develop alternative supply chains.

Featured image produced by an AI program and highlights the challenge from Brazil’s perspective of protecting its sovereignty against Global China, something which President Lula does not seem to be concerned with.

Middle Powers in a Changing World: How Australia and Brazil Navigate the China Dynamic

President Lula’s recent decision to station Brazilian general officers permanently in Beijing marks a potential inflection point in Brazil’s defense partnerships, one that could jeopardize billions of dollars in established defense industrial relationships and undermine decades of successful technology transfer programs.

While proponents frame this as a move toward “strategic autonomy,” a closer examination reveals troubling parallels to colonial-era relationships that could subordinate Brazil to Chinese interests while simultaneously destroying the most successful defense partnerships in Latin American history.

The Risk to Established Strategic Partnerships

Brazil’s current defense industrial landscape represents one of the most sophisticated technology transfer arrangements achieved by any developing nation. The Swedish partnership, centered on the $4.7 billion Gripen program, has delivered genuine industrial capabilities including final assembly at Embraer’s facilities, transfer of critical radar and electronic warfare technologies, and access to software source codes. Similarly, the French partnership has produced the $10+ billion submarine program with Naval Group, including four conventional Scorpène-class submarines, one nuclear-powered submarine, and comprehensive naval technology transfer at the Itaguaí Naval Complex.

These relationships represent far more than arms purchases. They constitute foundational investments in Brazil’s defense industrial base. The Swedish arrangement alone has created thousands of high-skilled jobs and positioned Brazil as a potential Gripen export hub for Latin America. The French submarine program has established Brazil as one of only a handful of nations with nuclear submarine capabilities, a strategic asset of immeasurable value.

President Lula’s apparent pivot toward China places all of this at risk. Unlike the transparent, democratic partnerships with Sweden and France for both nations have robust legislative oversight and shared democratic values, Chinese military cooperation operates under fundamentally different principles that could compromise Brazil’s existing relationships.

The Illusion of Diversification

The narrative surrounding Brazil’s military rapprochement with China emphasizes diversification and reduced dependence on traditional Western partners. The promise of Chinese VT-4 tanks, J-10 fighter jets, and advanced artillery systems appears to offer strategic options and technological advancement.

However, this framing obscures a fundamental reality: Brazil would not be achieving independence through diversification, but potentially abandoning its most successful defense partnerships for a relationship that exhibits classic characteristics of technological dependence.

Brazil’s economic relationship with China already demonstrates concerning patterns. China purchases Brazilian soybeans, iron ore, and crude oil while exporting manufactured goods and technology—a classic center-periphery relationship that has “primarized” Brazil’s economy. Military cooperation threatens to extend this subordinate dynamic into the security realm, potentially undermining the genuine technology transfer and industrial development achieved through European partnerships.

From Industrial Partnership to Technological Dependence

The contrast between Brazil’s existing European partnerships and potential Chinese cooperation is stark. Swedish and French arrangements have prioritized:

• Technology Transfer: Genuine transfer of manufacturing capabilities, software source codes, and technical expertise that builds Brazilian industrial capacity.
• Local Production: Final assembly and increasingly sophisticated manufacturing within Brazil, creating jobs and export potential.
• Democratic Oversight: Partnerships between democracies with transparent legislative processes and public accountability.
• Strategic Independence: Agreements that enhance Brazil’s capabilities without creating political dependencies.

Chinese military cooperation, by contrast, typically involves:

• Technology Dependence: Equipment requiring ongoing Chinese maintenance, spare parts, and upgrades, creating lasting vulnerabilities.
• Limited Transfer: Minimal genuine technology transfer, maintaining Chinese control over critical capabilities.
• Opaque Processes: Authoritarian decision-making without meaningful public scrutiny or legislative oversight.
• Political Leverage: Military dependencies that can be leveraged for broader geopolitical influence.

The Democratic Governance Challenge

Perhaps most concerning is how a Chinese pivot could undermine the governance frameworks that made Brazil’s European partnerships successful. The Gripen and submarine programs succeeded precisely because they operated within democratic oversight structures, with legislative approval, public debate, and transparent decision-making processes.

The decision to station Brazilian generals permanently in Beijing appears to have bypassed these crucial democratic safeguards. When Brazilian military officers become embedded in Chinese institutional structures, they risk absorbing different assumptions about civil-military relations, strategic priorities, and acceptable levels of public accountability—precisely the kind of institutional influence that could compromise Brazil’s democratic governance of defense policy.

Strategic Costs of Abandoning Proven Partnerships

A Chinese pivot would exact immediate strategic costs:

• Sunk Investment Losses: Billions invested in Swedish and French programs could become stranded assets if Brazil pivots to incompatible Chinese systems.
• Industrial Capacity: The manufacturing capabilities developed through European partnerships—from Gripen final assembly to submarine construction—could become obsolete.
• Export Potential: Brazil’s emerging role as a defense exporter, particularly for Gripen aircraft to other Latin American nations, would be jeopardized.
• Alliance Relationships: Brazil’s status as a democratic partner and potential NATO ally would be compromised, limiting access to Western defense technologies and intelligence sharing.
• Technological Autonomy: Rather than building on the industrial base created through European partnerships, Brazil would become dependent on Chinese systems and support structures.

The Path Forward

Brazil’s frustrations with some aspects of its defense relationships are understandable, but the solution lies in building on successful partnerships rather than abandoning them for untested alternatives.

True strategic autonomy should involve:

• Leveraging Existing Capabilities: Using the industrial base built through Swedish and French partnerships as a foundation for further indigenous development.
• Expanding Proven Partnerships: Deepening cooperation with European partners while maintaining the democratic oversight and technology transfer principles that made these relationships successful.
• Selective Engagement: Limited cooperation with China in areas that don’t compromise existing partnerships or democratic governance principles.
• Indigenous Development: Using transferred European technologies as stepping stones toward genuinely Brazilian defense capabilities.
• Regional Leadership: Leveraging Brazil’s position as Latin America’s most successful defense technology recipient to become a regional hub for democratic defense cooperation.

Brazil stands at a crossroads. It can build on the most successful defense industrial partnerships in Latin American history, relationships that have delivered genuine technology transfer, industrial capabilities, and strategic autonomy or it can abandon these proven successes for the uncertain promise of Chinese cooperation.

The permanent stationing of Brazilian generals in Beijing may mark a historic moment, but history suggests that Brazil’s greatest strategic successes have come through partnerships with democratic allies committed to genuine technology transfer and shared governance principles.

The choice facing Brazil is not simply between different suppliers, but between building on demonstrated success or starting over with a partner whose approach to international relationships has consistently prioritized Chinese interests over genuine partnership. Brazil’s size, resources, and democratic institutions position it to be a truly independent actor but only if it recognizes that strategic autonomy comes from building on strength, not abandoning it.

The Swedish and French partnerships represent that strength. The question is whether Brazil will build on this foundation or squander it in pursuit of an illusion of diversification that could leave it more dependent than ever.

Note: The Brazilian decision is highlighted here:

https://jornalggn.com.br/coluna-economica/a-aproximacao-militar-do-brasil-com-a-china-por-luis-nassif/#google_vignette

Also, see the following:

Is There a Military Pivot to China Underway by President Lula’s Brazil?

Chinese defence giant moves to acquire 49 percent of Brazil’s Avibras Aeroespacial

https://macaonews.org/news/lusofonia/china-norinco-brazil-avibras-aeroespacial/