Lula talks about BYD and Taiwan with Chinese chancellor

The president Luiz Inácio Lula da Silva (PT) received on Friday (19 January 2024) the Minister of Foreign Affairs of China, Wang Yi, for a closed-door conversation about commercial and diplomatic relations between the 2 countries.

Without mentioning the increase in tension in China with the movements for independence in Taiwan, Secom (Secretariat of Social Communication) informed through an official note that, in the conversation, Lula “reaffirmed the Brazilian position of recognizing the existence of 'one China'”.

In April 2023, the Brazilian Chief Executive signed a joint declaration with the Chinese on the topic when he visited Beijing.

On January 13, DPP (Democratic Progressive Party) candidate Lai Ching-te was elected president of Taiwan. In power since 2016, the party defends the region's autonomy from China, which considers Taiwan as part of its territory in the form of a dissident province. The party also reinforces the island's need to strengthen relations with the United States and Japan.

Political change in Taiwan has worsened tensions in the region. Support from the Brazilian government at this time is important for Chinese President Xi Jinping to strengthen his actions against dissidents on the island.

Lula and Yi also talked about Chinese investments to set up the BYD electric car factory in Camaçari (BA), in the complex where Ford operated until it closed its operations in the country and migrated to Argentina in 2021.

The Brazilian unit should enter into operation in the 2nd half of 2024. Currently, the company already leads the electric and hybrid car market in Brazil, with 66% of market share (market share) in the segment in November 2023.

The federal government is also considering reserving R$500 million from Mover (Green Mobility and Innovation Program) to serve as compensation for companies that have expressed interest in installing electrified car factories in Brazil.

This is because automakers were dissatisfied with the return of the import tax on hybrid and electric vehicles, as they wanted to continue importing them to Brazil until they open their units in the country.

There is also discussion about specific federal and state tax benefits for BYD to establish itself in the region.

In the morning, Yi had met with the Brazilian chancellor, Mauro Vieira, at the Itamaraty Palace, in Brasília. The meeting with Lula was held at the air base in Fortaleza (CE). It lasted about an hour.

The location was chosen because Lula was in the state to sign the decree creating the ITA (Aeronautics Technological Institute) advanced campus in the capital of Ceará. It is the 2nd ITA unit in the country.

Yi's trip to Brazil is also part of the preparations for the state visit that Chinese President Xi Jinping is expected to make to Brazil in November. At the same time, the Chinese leader is expected to participate in the G20 Summit, which will be held in Rio. The visit had been expected since Lula's trip to Beijing in April 2023.

According to Secom, Lula and the Chinese chancellor also discussed partnerships in the renewable energy sector and joint projects and actions in Africa.

Read the full note:

“President Luiz Inácio Lula da Silva received, this Friday, January 19, the Minister of Foreign Affairs of China, Wang Yi. The meeting took place at the Fortaleza Air Base (CE), where Lula participated in agendas during the day. The Chinese chancellor's trip is preparatory to a state visit by the president of China, Xi Jinping, to Brazil, to take place, in principle, on a date close to the G20 leaders' meeting, in Rio, in November.

“The minister brought greetings from President Xi Jinping and the meeting expressed the mutual desire to maintain and develop the strong relationship and friendship between Brazil and China. On that occasion, Lula reaffirmed the Brazilian position of recognizing the existence of “one China”.

“During the meeting, Lula and Wang Yi talked about investments in Brazil by BYD, which is setting up a car factory in Bahia.

“The Brazilian president and the Chinese chancellor also spoke about the current international situation, discussed the growing partnership between Brazil and China in the renewable energy sector and discussed joint projects and actions in Africa.

“Wang Yi highlighted that Brazil is a priority for Chinese diplomacy.”