|São Paulo

The Americas | A match made in the Middle Kingdom
Brazil courts China as its Musk feud erupts again
Xi Jinping, China’s leader, spies a chance to draw Brazil closer

The re-election of Donald Trump on November 5th rather overshadowed Luiz Inácio Lula da Silva’s big bash.


Lula, as Brazil’s president is known, hosted the G20 leaders’ summit in Rio de Janeiro on November 18th and 19th.


Heads of state from 19 of the world’s largest economies, as well as the European and African Unions, convened to talk shop.


Lula had three goals for the summit: the creation of a global alliance to reduce hunger and poverty; an agreement to reform global institutions like the IMF and the UN; and an increase in countries’ financial commitments to combat climate change.


He also wanted to whip up support for a global tax on billionaires.


Lula got a declaration signed by all g20 participants to broadly support these ambitions.


Mr Trump, soon to be the most powerful person in the world, will not share the zeal.


Mr Trump’s return to the world stage may scupper Lula’s plans, but he has a consolation prize: his relationship with Xi Jinping.


After the g20 China’s president travelled to Brasília, the capital, to meet his Brazilian counterpart.


To celebrate 50 years since their countries established diplomatic ties they signed 37 agreements, covering everything from Brazilian grape exports to co-operation on satellites.


Sino-Brazilian relations “are at their best moment in history,” said Mr Xi, with Lula by his side.


In recent months, “anyone who is anyone in Brazil has been to China,” says a former Brazilian ambassador to Beijing.


Several factors have been pushing Brazil and China together.


In Brazil’s case they are mostly political.


Shortly before the election in the United States, Lula threw veiled support behind Kamala Harris, Mr Trump’s rival.


Meanwhile, Mr Trump is close to Jair Bolsonaro, Lula’s far-right populist predecessor and nemesis.


Elon Musk has become Mr Trump’s right-hand billionaire.


The tech entrepreneur had a months-long feud with Brazil’s highest court this year, which culminated in his social-media platform, X, being banned in Brazil for over a month.


On November 16th Lula’s wife, Rosangela da Silva, said “Fuck you, Elon Musk,” at a public event.


Mr Musk replied on X, “They are going to lose the next election”.


This means Lula will not expect a warm reception in Washington after Mr Trump is inaugurated in January.


China’s problems with the United States run deeper.


Mr Trump has said he will slap 60% tariffs on all Chinese goods as soon as he takes office.


And so China is keen to do everything it can to expand the markets for its goods beyond the United States.


Brazil, the world’s ninth-largest economy, is an important part of that puzzle.


Brazil also shares China’s multipolar view of the world, and is keen to rely less on the dollar for international transactions.


But perhaps the most important component of Sino-Brazilian friendliness is that China wants to buy what Brazil is selling.


China guzzled Brazilian oil, iron ore and soyabeans though the 2000s as the Chinese middle class grew rapidly.


It overtook the United States as Brazil’s biggest trade partner in 2009, during Lula’s second term (see chart).


Commerce continues to expand despite slowing Chinese growth.


Brazilian exports to China are running at record highs.


Brazil is one of a handful of countries that boast a trade surplus with China; last year it exported $51bn more to the Asian giant than it imported from it.


During Mr Trump’s last term, between 2017 and 2021, Brazilian exports to China nearly doubled as China bought soyabeans, corn and chicken from Brazil instead of the United States.


On this visit, Mr Xi and Lula signed deals that could soon allow Brazil to export grapes, sesame, sorghum and fish products to China, which could be worth a combined $450m per year.


TS Lombard, an investment firm in London, reckons that a 10% increase in Chinese demand for Brazilian products could boost GDP growth from a projected 2% in 2025 to 2.6%.


But it is Chinese investment in technology, industry and green energy which most excites Lula, a former carworker who has pledged to slash Brazil’s carbon emissions.


The United States remains the biggest source of foreign investment into Brazil by far.


Chinese investment in the region—and in Brazil—has fallen in recent years.


But the composition of that investment still suits Lula.


Last year fully 72% of it went to clean-energy projects.


Exports of electric vehicles, solar panels and lithium-ion batteries from China to Latin America rose from $3.2bn in 2019 to $9bn in 2023.


Brazil absorbed 63% of the total by value.


“Five years ago China was investing in expensive fixed assets like electricity infrastructure, oil and gas,” says Hsia Hua Sheng, a professor at the Getulio Vargas Foundation in São Paulo who also works for Bank of China.


“Today it invests in manufacturing, renewables, services and logistics.


” He claims that these are “higher-quality” investments because they often involve partnerships with local firms, job creation and technology transfer.


BYD and Great Wall Motors, two Chinese rivals to Tesla, are opening electric-vehicle factories in Brazil next year.


It will be the firm’s biggest factory outside Asia.


A high-tech Chinese factory built on the site of a fading American industrial champion is hard enough for officials in Washington to stomach.


But no subject is likely to ruffle as many feathers in a Trump-Musk White House as a deal on satellites.


During Mr Xi’s visit a memorandum of understanding was signed between Brazil’s state telecommunications company, Telebras, and SpaceSail, a Chinese maker of low-Earth orbit satellites that competes with Mr Musk’s Starlink.


Brazil’s communications minister, Juscelino Filho, said he hoped SpaceSail will offer its services in Brazil “as soon as possible”.


In October, Mr Filho had visited SpaceSail’s headquarters in Shanghai and those of another satellite-maker in Beijing.


The visit followed a spat about free speech and disinformation between Mr Musk and Alexandre de Moraes, a powerful judge on Brazil’s Supreme Court.


In August Mr Moraes froze Starlink’s bank accounts in Brazil to force Mr Musk to take down social-media accounts on X, the platform he owns.


Starlink controls almost half of the market for satellite-internet services in Brazil.


SpaceSail plans to have 600 satellites in orbit by the end of 2025—around a tenth of the number that Starlink does.


Beyond this, Lula and Mr Xi could further their countries’ financial co-operation.


In 2023 they agreed to settle all trade in their countries’ own currencies rather than in dollars.


In October that same year they carried out the first transaction in yuan and reais.


The scale of these transactions is currently puny, but they carry symbolic weight and may provoke Mr Trump’s ire.


He has warned that he would slap tariffs of 100% on goods imported from countries that try to “leave the dollar”.


Such radical actions by Mr Trump would probably have unintended consequences.


“The relationship between Brazilian and Chinese businessmen is way more consolidated today compared with five or ten years ago,” says Mr Hsia.


That is thanks in part to the trade war Mr Trump waged in his first term.


In his second, he may end up making Chinese and Brazilian businessmen friendlier than ever.


The World Ahead | The World Ahead 2025
Tom Standage’s ten trends to watch in 2025
A letter from the editor of The World Ahead

IT SEEMS APPROPRIATE that 2025 has been designated the year of quantum science and technology by the United Nations.


Because like Schrödinger’s cat, which (in a quantum thought-experiment) was both alive and dead at the same time inside a closed box, 2025 has hovered in a superposition of two very different states, defined by the outcome of America’s election.


Now the ballot boxes have been opened, the world knows which 2025 to expect: the one where Donald Trump returns to the White House.


With that uncertainty resolved, here are ten themes to watch in the coming year.
1.


The repercussions of Mr Trump’s sweeping victory will affect everything from immigration and defence to economics and trade.


His “America First” policy will have friends and foes alike questioning the solidity of America’s alliances.


This could lead to geopolitical realignments, heightened tensions and even nuclear proliferation.
2.


More generally, incumbent parties did badly in 2024’s unprecedented wave of elections.


Some were chucked out (as in America and Britain); others were forced into coalition (as in India and South Africa); others were pushed into cohabitation (as in Taiwan and France).


Can new leaders deliver what they promised?


Mr Trump may push Ukraine to do a deal with Russia and give Israel a free hand in its conflicts in Gaza and Lebanon.


America’s more transactional stance and scepticism of foreign entanglements will encourage troublemaking by China, Russia, Iran and North Korea (the “quartet of chaos”) and more meddling by regional powers, like that seen in crisis-hit Sudan.


But it is unclear whether America would stand up to China in a conflict over Taiwan or in the South China Sea.
4.


For now, America’s rivalry with China will manifest itself as a trade war, as Mr Trump imposes restrictions and ramps up tariffs—including on America’s allies.


As protectionism intensifies, Chinese firms are expanding abroad, both to get around trade barriers and to tap new markets in the global south.


So much for decoupling; Chinese firms, building factories from Mexico to Hungary, have other plans.
2025 will be a year of expectations.


China’s government has encouraged booming exports of solar panels, batteries and electric vehicles to offset a weak domestic economy.


The result is a Chinese-led clean-tech boom, with adoption of solar panels and grid storage outstripping forecasts.


And the world will soon learn whether global emissions have peaked.
6.


The rich world’s central bankers have celebrated the defeat of inflation.


Now Western economies face a new challenge: reducing deficits, by increasing taxes, cutting spending or boosting growth.


Many may also have to increase defence budgets.


In America, Mr Trump’s policies will make things worse: hefty import tariffs could hamper growth and reignite inflation.
7.


America has just picked its oldest-ever president-elect.


World leaders are greying, along with their populations.


Expect more discussion of age limits for political leaders.


China, meanwhile, is looking for economic opportunities in an ageing world.


In parts of the Middle East, by contrast, a booming youth population, coupled with a shortage of jobs, risks instability.
8.


It’s the biggest gamble in business history: more than $1trn is being spent on data centres for artificial intelligence (AI), even though companies are still not sure how to use it and adoption rates are low (though many workers may simply be using it in secret).


Will investors lose their nerve, or will AI prove its worth, as “agentic” systems become more capable and AI-developed drugs emerge?
9.


The global movement of people, not just goods, faces increasing friction.


Europe is adding new border checks, and its borderless Schengen system is fraying.


The backlash against “overtourism” will diminish in 2025, but restrictions introduced by many cities, from Amsterdam to Venice, will remain.
10.


With assassination attempts, exploding walkie-talkies and giant rockets being captured by chopsticks, one lesson of 2024 was to expect the unbelievable.


What implausible-sounding things could happen in 2025?


Our “Wild cards” section offers a selection to watch out for, including a devastating solar storm, the discovery of lost ancient texts—and even another global pandemic.


To navigate the future, it can help to anticipate the unlikely.


We hope you will find The World Ahead 2025 a useful guide to the coming year, whatever surprises await.