China COVID19 Diplomacy & International Relations Latin America Technology

The Price Of Huawei’s Bid For Brazil’s 5G Network

China’s Huawei was struggling to secure a chance to bid for Brazil’s new 5G network, but Brazil’s dire need for vaccines might give China a new advantage.

As Brazil endures its third wave of the pandemic, its government is now focused on curbing mortalities while reclaiming its position on the world stage. President Joe Biden’s election victory last November concluded the close alliance between Brazil’s Jair Bolsonaro and President Donald Trump. With Bolsonaro no longer taking Washington’s lead on Chinese involvement, the country’s business deals in Brazil might erase the past 4 years of Trumpist policy.

The past year alone witnessed the halt of China’s CoronaVac trials in Brazil, as well as the cancellation of a vaccine deal for nearly 45 million doses. Brazil’s government has responded by actively searching for legal grounds to block Huawei, the Chinese telecommunications giant, from competing for its prized 5G Network. However, with the government now struggling to roll out vaccines to its large population, China is becoming the country’s best bet for securing sufficient doses. In the end, Huawei finds itself to be a bargaining chip between the two countries in the midst of a pandemic. 

Although talks surrounding a 5G network and COVID-19 vaccines appear to be unrelated at first, their timely intersection in Brazil’s relationship with China is telling. Pandemic politics have altered China’s position in Latin America, challenged America’s strategic approach to China, and have increased Huawei’s importance in creating a new era for Beijing’s foreign policy.

Bolsonaro Takes China Head-On

Bolsonaro’s close alignment with former President Trump was one of the defining pillars of his foreign policy and influenced his stance on Chinese involvement in Brazilian affairs. As the Chinese continued their economic expansion into Latin America, Bolsonaro followed Trump’s lead by obstructing Chinese economic activity.  An example of such policy materialized in December 2020 when it was reported that Bolsonaro was seeking legal options to block Huawei from entering the 5G auction. His administration’s actions have been interpreted as reinforcing the American campaign against Huawei’s expansion. Last August, former American Under Secretary of State Keith Krach deemed Huawei “the backbone of China’s worldwide surveillance state.” More direct statements from Bolsonaro’s inner circle came from his son, politician Eduardo Bolsonaro, who called for a 5G network free of Chinese espionage last year. With Brazil’s pandemic situation getting worse by the day, Bolsonaro’s government might have to make amends with the Chinese as a last resort for more vaccines.

CoronaVac Becomes China’s Bargaining Chip

With ICU occupancy rates currently topping 90% in over half of the country’s states, Brazil’s public health systems are now on the brink of a historical collapse. The country is also rushing to contain a dangerous variant that originated in the city of Manaus, which is now raising concern amongst public health experts worldwide. With reportedly high transmissibility and the potential to reinfect people with COVID-19, the P.1. variant has labeled Brazil a global health concern. 

Bolsonaro’s government originally announced its plans to internally manufacture AstraZeneca’s vaccine and produce over 30 million doses by the end of January 2021. However, delays in AstraZeneca’s trials and a shortage of the vaccine’s active ingredient have halted the administration’s plans. Brazilians are now left in a dire situation after the government passed on opportunities to order from other vaccine providers due to concerns over the terms in supply contracts. Nevertheless, Beijing’s ability to mass-produce vaccines and quickly distribute them to the developing world has now created an opening for negotiations with Brazil.

Brazilian telecoms regulator Anatel announced Huawei’s reentry into the nation’s 5G bidding war on February 25th, a decision that came only two weeks after the country’s communication minister, Fábio Farias, traveled to Beijing to meet with Huawei executives. The country’s health ministry has since purchased an additional 20 million vaccines from China in expedited orders. Brazil’s decision to backtrack on Huawei presents yet another blow in America’s efforts to disempower the company. This is a surprising turn of events for both Huawei and China, which have both received skepticism and vocal criticisms from various members of Bolsonaro’s administration, including the President himself. 

China Turns The Tide In Latin America

The COVID-19 pandemic presented China with a new set of barriers regarding diplomacy and economic investment in Latin America, but it now appears that pandemic politics have given Beijing a new upper hand. Huawei’s welcoming into Brazil’s 5G network auction is only one example of recent Chinese involvement in the region. China has jumped at new opportunities to invest in Latin America’s energy companies as foreign investors continue to pull out. Within the last year, Beijing has purchased large shares of Chilean, Mexican, and Peruvian energy providers. This includes China’s government-owned State Grid Corporation acquiring 100% of Chile’s Chilquinta Energia and 96.04% of Compañía General de Electricidad. Luz Del Sur, which makes up a third of Peru’s electricity sector, witnessed an 83.6% acquisition by China Yangtze Power International Corporation. Mexico’s Zuma Energia, the country’s largest independent renewable energy provider, was fully acquired by China’s State Power Investment Corporation late last year. 

As COVID-19 cases continue to surge in the region, these investments appear to coincide with large-scale orders of SinoVac’s vaccine. The Chinese-manufactured inoculation is now one of the principal treatments being offered in these three countries, with Chile carrying out Latin America’s most successful vaccination campaign. Mexico has increasingly relied on China for vaccinations after failing to obtain sufficient treatments from Pfizer and the United States government. Peru has also increased its dependency on China’s Sinopharm by striking a deal with the pharmaceutical company for tens of millions of vaccines.

Leveraging vaccines to increase its market share appears to be China’s strategy after a troublesome year that struck a blow to the CCP’s public image. Time will tell if Beijing can sustain its current momentum, but Huawei’s potential deal in Brazil is a strong indication of its future standing. Now that Bolsonaro is left without a close ally in Washington, he must confront China’s business involvement in Brazil alone and in the process potentially unravel years of Trumpist efforts to block Beijing’s global expansion. 

Washington’s New Approach To China

President Biden’s first 100 days in office have been defined by a steady vaccine roll out and sweeping economic policy. On April 7, the President gave a speech regarding his $2 trillion American Jobs plan that intends to jumpstart American manufacturing, create union jobs, and make large-scale renovations to the country’s infrastructure. Also included in his speech on domestic infrastructure was a mention of China’s foreign investments and how Beijing plans to “own” the future by fueling its growing global influence. It may initially seem out of place to mention foreign investments when discussing domestic infrastructure; however, Biden’s close  watch on China’s investments signals Washington’s new approach to Chinese relations. 

Biden’s plans to take on China and revitalize the American economy begins with creating more middle-class jobs within the clean energy and manufacturing sectors. The current administration’s goal is to create a more competitive economy that can effectively challenge  Beijing’s increased global presence. Nevertheless, the United States might be taking notes from China’s previous approach to domestic infrastructure. China spends about eight percent of its GDP on domestic infrastructure, which amounts to roughly three times what the United States typically allocates. Now with a newly-built infrastructure and a rebounded economy following its COVID-19 outbreak, China is focused on making strategic investments in regions like Southeast Asia and Latin America. The United States is now left with the task of rebuilding its outdated infrastructure so that it can remain competitive in global markets.  

With clean energy appearing to be the future for global manufacturing, America and China have taken two vastly different approaches. President Biden plans to make America a leader in renewable energy while making the sector a massive generator for jobs. The United States also rejoined the Paris Climate Agreement earlier this year, symbolizing a renewed promise to curb CO2 pollution by one the world’ largest emitters. On the other hand, China has verbally committed to peak emissions by 2030 before gradually reducing pollution by 2060. While Beijing appears to not be making massive climate change efforts in the immediate future, it still looks to capitalize off energy companies in the developing world. The two superpowers are now working towards securing their future prowess on different fronts, which means competition between China and the United States seems to show no end in sight. 

Huawei’s potential acquisition of Brazil’s 5G network would be a massive blow to former President Trump’s policy on limiting Chinese influence. President Biden must now find ways to box in China with the help of allies like the EU and UK and a revamped American economy that can keep up with its adversaries. However, Beijing’s increasing presence across America’s southern border is a physical example of how China might already be boxing in the United States. 

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By Sylvio Martins

Sylvio Martins graduated from UCLA in 2018 with a B.A. in English and a minor in Film, TV, & Digital Media Studies. He is a freelance writer with experience covering a variety of beats ranging from lifestyle to culture and politics. He aspires to combine his interests in filmmaking and global affairs to pursue a career in documentaries.

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