Brazil-China Cooperation

Information and Communication Technologies (ICT) impact every aspect of contemporary society, from a country's economic development and power dynamics to the quality of life and habits of citizens in their daily lives. Considering the growing digital hyperconnectivity and the vast territorial extension of Brazil, these technologies play a fundamental role in the markets' competitiveness and in the nation's progress, since, as their name implies, they deal with information management and facilitate communication between the most diverse locations. For example, ICT encompass components such as computer hardware, network infrastructure and mobile devices. Greater national investment in promoting research and development (R&D) in these technologies would raise Brazil's participation in the international market to a more notable level.

This digital interconnection process results from the breaking down of geographical barriers. Globalization has made it possible to exchange information flows and has led, in some cases, to a certain amount of competition for a leading role in the development of new technologies. In the international arena, countries seek political positioning and arrangements according to their domestic interests.

In the wake of overcoming geographical obstacles and the need to foster the national ICT industry, the visit of President Luiz Inácio Lula da Silva to the People's Republic of China in April 2023 witnessed the signing of a Memorandum of Understanding (MOU) on Information and Communications Cooperation between the Ministry of Communications and the National Telecommunications Agency of Brazil ("Anatel") and the Ministry of Industry and Information Technology of China. [1] This agreement carries symbolic significance beyond its legal applicability, as it (i) underscores the enduring friendship and solid strategic partnership between Brazil and China, as reflected in the "considerations," and (ii) indicates joint political intentions to promote the development of ICTs.

The mentioned MOU aims to promote the exchange of policies, regulations, and technical standards in information and communications, as well as cooperation between research institutes and Brazilian and Chinese companies, contributing to national industries, as outlined in the first article. The scope and forms are defined in the second and third articles, encompassing areas such as mobile communication technologies, industry development, key technologies, algorithms, standards, and artificial intelligence application scenarios, among others, though not limited to them. The document anticipated that such actions would take place through exchange visits, seminars and dialogues organization, encouragement of exchange and cooperation between industry organizations, and other initiatives.

Behind the scenes of this re-connection of interests and intentions, government agencies are responsible for stitching together and defining the terms and applicability of the agreement. On the Brazilian part, the Ministry of Communications and Anatel are involved. To gain an in-depth understanding of the MOU, Jeferson Fued Nacif, Head of the Special Advisory Office for International Affairs at the Ministry of Communications, and Daniel Brandão, General Coordinator of Public Policies for Telecommunications Services at the Secretariat of Telecommunications, commented on aspects of the terms signed, the actions taken, as well as future expectations.

Nacif reveals that the signing of the MOU represents a strategic initiative on the part of the Brazilian government, in line with the new diplomacy adopted, so that the agreement's primary objective is to restart multilateral milestones that were interrupted or weakened in previous governments, and is a reflection of Brazil's commitment to revitalizing its diplomatic and political relations at a global level. The initiative commented on by Nacif is a fundamental strategy for Brazil's projection and inclusion in discussions on technology and innovation with a major trading partner like China.

The fact is that, over the last few years, there has been a real revolution in the global scenario of technologies related to electricity and telecommunications, with Asian economies emerging as important players in this movement. In this context, China has played a central role, establishing itself as an epicenter of ICT innovation. Chinese tech giants, such as Huawei, have led the way, surprising the market and the global community with their technological achievements. A notable highlight has been the constant evolution of smartphone features, going beyond the user interface and design, with an increasing focus on internal components, such as next-generation semiconductors.

In addition, the data from the China National Intellectual Property Administration (CNIPA) for 2022 shows that the country is a leader in the implementation of 5G technology. One indicator of this protagonism is patents, since almost 40% of the standard essential patents to this technology (SEPs) are owned by Chinese companies.

In terms of international politics, China's representative performance in 5G is such that it has raised concerns in the United States to the point where Huawei has received commercial reprisals from Washington.

The secret of Chinese success lies in the country's ability to offer high quality products at low cost, while at the same time (i) it invests heavily in R&D, remaining at the forefront of cutting-edge technologies, (ii) it develops remarkable financing tools for companies, almost always provided by Chinese state banks (evident in the paths of "big telcos" such as Huawei, ZTE, Xiaomi and OPPO), (iii) has a huge domestic market (in 2021, consumption represented 65.4% of China's GDP growth, according to the latest report published in 2022 by the United Nations Development Program in China) and (iv) protects its national interests, such as its solid patent system.

Brazil, for its turn, sees possibilities for investments in the ICT industry that exceed US$ 25 billion. Furthermore, President Lula seems to recognize the vital relevance of science and technology for the country's development. The inter-ministerial commitment to this agenda is evident, with ministries such as (i) Communications, (ii) Development, Industry, Trade and Services, (iii) Science, Technology and Innovation and (iv) Foreign Affairs, collaborating in a task force to boost innovation.

As Brazil expands its 5G infrastructure, expands fibre optics (with special attention to the Amazon region, where connection is a determining factor in sustainable development) and seeks to meet connectivity demands throughout the territory, partnering with the Chinese government and Chinese companies is a key element in accelerating these processes and modernizing strategic sectors of the Brazilian economy to become a digital nation. In 2022, it was observed that the electricity sector in Brazil registered a significant level of investment from China, absorbing a share equivalent to 45.5% of the total value of the stock of Chinese investments in the country. [2] This movement is in line with the prospect of cooperation proposed in the MOU, since it makes it possible to foster technological development in this Brazilian industry on the basis of a historical friend relationship with China. And in this sense, Brazilian society can only benefit.

As for the practical aspect of cooperation and its respective results for the development of new technologies in telecommunications networks, Daniel Brandão highlights the creation of the BRICS Future Networks Institute, which represents a platform for the promotion of technologies under development in the medium and long term through cooperation between the member countries, which includes Brazil and China. Brazil has designated the Center for Research and Development in Telecommunications (CPqD) as its entity to participate in this institute. Initiatives like this are driving the movement that encourages and directs Brazilian society towards technological innovation and full connection.

In this context of disruptive technologies, the importance of industrial property and, more specifically, patent protection in stimulating technological progress is unquestionable. These instruments recognize and reward R&D efforts and investments, encouraging companies and individuals to seek creative solutions to social challenges. SEPs, in particular, guarantee the interoperability of ICTs, representing key players in the implementation of established technical standards. The licensing of SEPs, based on fair, reasonable and non-discriminatory terms, ensures that multiple market players can access these technologies and thus avoid obstacles to interoperability. This, in turn, fosters technological development, competition and the convergence of ICT systems, benefiting both industry and consumers.

In addition to the substantial investment in R&D, as we have already discussed, Chinese ICT companies stand out by filing one of the largest volumes of applications for patents in the world, and the Chinese Patent Office is part of the IP5, a group that brings together the top five on the planet (in addition to the Chinese office, the offices of the United States, the European Union, Japan and South Korea are also on this list). [3] Meanwhile, Brazil, in the midst of "chronic crises" - with the National Institute of Industrial Property (INPI), the agency that oversees the industrial property system in Brazil, facing structural problems, with limited infrastructure and human and financial resources - is moving towards becoming an increasingly sophisticated and attractive destination for inventors, applicants and patent owners. [4]

This new page in Sino-Brazilian relations in ICT and all its related aspects, through the MOU and current and future projects, is a reflection of the interconnectivity of the modern world. Constructive dialogue between nations is essential in managing this scenario of continuous technological evolution, in order to foster global progress in a sustainable way and democratize access to technology. At this point of collaboration, Brazil and China stand out as examples to be followed when it comes to ICT.

1. Memorandum of Understanding on Cooperation in Information and Communications between Brazil and China. Available at: https://static.poder360.com.br/2023/04/8-acordo-brasil-china-cooperacao-informacao-comunicacoes.pdf.
2. Brazil-China Business Council. Chinese Investments in Brazil 2022, p. 43. Available at: https://www.cebc.org.br/2023/08/29/numero-de-projetos-chineses-no-brasil-bateu-recorde-em-2022/.
3. According to the World Intellectual Property Organization's Annual Indicators Report 2023, which refers to the figures for 2022, this was the third consecutive year in which there was growth (1.7%) in patent filings, a statistic directly related to the presence of China, which filed 1.58 million patent applications worldwide. Available at: https://www.wipo.int/edocs/pubdocs/en/wipo-pub-941-2023-en-world-intellectual-property-indicators-2023.pdf.
4. By example, in addition to offering various forms of priority processing for patents since 2015, in 2017 the INPI began the Backlog Combat Project, aimed at substantially reducing the number of invention patent applications. Special attention has been paid to 5G technology patents. INPI. Tecnologia 5G: Panorama do Patenteamento no Mundo e no Brasil, p. 33. Available at: https://www.gov.br/inpi/pt-br/assuntos/informacao/RADAR_5G_2023_PARA_PUBLICAR.pdf.

The opinions expressed in this article do not reflect the institutional position of Observa China 观中国 and are the sole responsibility of the author.