Soy, China’s Food Security, and the Brazilian Supply

• Author: Giorgio Romano Schutte,Reinaldo Campos
• DOI: http://doi.org/10.1177/0094582X221115675
• Published date: 01 September 2022
• Date: 01 September 2022
• Subject Matter: Articles

https://doi.org/10.1177/0094582X221115675

LATIN AMERICAN PERSPECTIVES, Issue 246, Vol. 49 No. 5, September 2022, 68–85

DOI: 10.1177/0094582X221115675

© 2022 Latin American Perspectives

68

Soy, China’s Food Security, and the Brazilian Supply

by

Giorgio Romano Schutte and Reinaldo Campos

Translated by

Heather Hayes

Soy production in Brazil has become a key part of food security policies and has con-

tributed to China's development and social stability since the early 2000s. On the Chinese

side, there is a sectoral policy that is part of a broader development strategy, while for

Brazil there is a pragmatic response that aims to take advantage of an opportunity that has

opened up. The relationship between the two countries, rather than being one of comple-

mentarity and reciprocal benefits, is one of asymmetrical interdependence.

A produção de soja no Brasil tornou-se parte fundamental das políticas de segurança

alimentar e contribuiu para o desenvolvimento e a estabilidade social da China desde o

início dos anos 2000. Do lado chinês, há uma política setorial que faz parte de uma estra-

tégia de desenvolvimento mais ampla, enquanto para o Brasil há uma resposta pragmática

que visa aproveitar uma oportunidade que se abriu. A relação entre os dois países, mais do

que de complementaridade e benefícios recíprocos, é de interdependência assimétrica.

Keywords: China, Brazil, Soy, Food security, Asymmetrical interdependence

The twenty-first century has brought something new to Latin America: the

constant absolute and relative increase in trade and economic relations with

China. China's share of the region's exports jumped from just over 1 percent in

1995 to 12 percent in 2019. In the same year, imports from the Asian country

accounted for 18 percent of the total. As a result, trade between China and Latin

America came to US$324 billion, with a regional trade deficit of US$68 billion

(UNCTADSTAT, 2020). In contrast to the vast majority of countries in the

region, Brazil regularly records a significant trade surplus because of an export

basket concentrated on three products: soybeans, iron ore, and oil.

This study focuses on soybeans,1 which account for about a third of Brazil’s

exports, with figures that have been increasing since the 2010s. This article

seeks to explain the logic behind the trade, showing that China's imports of

Brazilian soybeans are part of a national development strategy, in particular

related to food security, dating back to the 1990s. Meanwhile, Brazil’s soybean

Giorgio Romano Schutte is an associate professor of world political economy and international

relations at the Universidade Federal do ABC and a research fellow of the Conselho Nacional de

Desenvolvimento Científico y Tecnológico. Reinaldo Campos is a Ph.D. candidate in world polit-

ical economy at the Universidade Federal do ABC and an analyst at the Empresa Brasileira de

Pesquisa Agro-Pecuária. They thank Ana Tereza L. Marra de Sousa, Luccas Gissoni, Tomás Costa

de Azevedo Marques, and Valéria Lopes Ribeiro for their comments and suggestions. Heather

Hayes is a translator in Quito, Ecuador.

1115675LAPXXX10.1177/0094582X221115675Latin American PerspectivesSchutte and Campos/China’s Food Security and Brazilian Soy

research-article2022

Schutte and Campos/CHINA’S FOOD SECURITY AND BRAZILIAN SOY 69

exports should be seen as a window of opportunity important to a specific

agribusiness sector without any articulation with an economic or social devel-

opment project. Since the late 2000s, the surplus in the Brazilian agricultural

trade balance has masked the deficit in manufacturing, but strictly speaking

there is no direct relationship between the two. Early deindustrialization2 and

regressive specialization began in the early 1990s with trade and financial lib-

eralization, and as a consequence industry lost its significance in the structure

of production, job creation, and the trade balance, especially in the more capi-

tal- and technology-intensive sectors. This process was only partially offset by

investment in agribusiness, and this explains the lower level of gross fixed

capital formation from then on.3 The reprimarization of the Brazilian export

agenda has strengthened certain sectors with little or no concern for the coun-

try's industrial capacity. From a political point of view, these sectors are articu-

lated around interests that are conservative when it comes to values and liberal

in terms of the economy and easily coexist with regressive reprimarization. At

the same time, a political base has been created that has a strong economic

interest in maintaining good relations with China and, paradoxically, resists

U.S. pressure and the anticommunist rhetoric of certain domestic sectors.

In contrast, China appears to have an articulated strategy. In his analysis of

the growing Chinese presence in Latin America, Baiyi (2017: 16) has identified

two central objectives of Chinese economic relations: “To elevate the position

of Chinese companies in the global value chain and ensure the external supply

of raw materials and commodities.” It can be added that China has mobilized

its companies, especially state-owned companies, to compete for control of the

production and distribution chains of the most important raw materials in an

effort to guarantee the supply of them. Given its objective limitations, Chinese

growth is increasingly dependent on those supplies. Since the time of Deng

Xiaoping, Chinese administrations have been developing the country’s inte-

gration into the global capitalist system, aiming at development with sover-

eignty. This makes acquisition of technological control, along with the

development of endogenous capabilities, a necessity (Schutte and Reis, 2020).

The policy of “dual circulation” announced by President Xi Jinping in 2020

should be seen not as a novelty or a break but as a reaffirmation of the national-

ist aspiration to develop the country without being dependent on other nations.

However, this does not mean that China insists on being fully self-sufficient. In

addition to developing endogenous capabilities, the country is striving to

“tighten international production chains’ dependence on China, forming pow-

erful countermeasures and deterrent capabilities based on artificially cutting

off supply to foreigners” (Xi, 2020). In other words, this means establishing

relationships of interdependence as a countermeasure to economic sanctions.

Food security is a central part of this effort, and here too there is the challenge

of optimizing and stabilizing production chains and supply chains. “As a large

country with a population of 1.4 billion, the focus of the food and real economy

industries must be on ourselves, and this point must not be abandoned.” A

long-standing strategy aims to maximize self-sufficiency in part of the food

production chain. This requires controlling supply, and the most important

crop is soybeans. On the basis of policies aimed both at food production (food

security) and at maintaining rural employment (social stability), the Chinese

government has been employing a strategy of buying raw soybeans abroad to