Last week, The New York Times published a blockbuster story alleging that China had changed the Brazilian government’s position on Huawei by dangling the promise of vaccines.
The article detailed how Brazilian president Jair Bolsonaro, spurred on by the Trump administration, was set to ban the Chinese telecommunications giant from helping build the country’s 5G network. Then the pandemic came along. With a skyrocketing death toll and in desperate need of China’s CoronaVac vaccine, the Brazilian government abruptly changed face, according to The Times. On February 11, Brazil sent its communications minister to Beijing, and, two weeks later, the Brazilian regulator Anatel announced that Huawei would be allowed to supply equipment for the construction of 5G infrastructure after all.
“The precise connection between the vaccine request and Huawei’s inclusion in the 5G auction is unclear, but the timing is striking,” wrote The Times’ Ernesto Londoño and Letícia Casado. “It is a part of a stark change in Brazil’s stance toward China.”
It is a familiar narrative in Western media — one that depicts China imposing its will through hegemonic might. However, the underlying dynamics are generally more nuanced. Articles like The Times’ flatten the complex reality of emerging markets, where often the most intense jockeying is happening elsewhere. In Brazil’s case, the conflict exists mostly at the domestic level.
In the case of Brazil and its 5G network, the main battle is not between a nation fearful of protecting its cybersecurity sovereignty from a superpower. Instead, it is between hard-line officials of the Bolsonaro administration on one side and political pragmatists within the same government alongside actors from the private sector on the other.
Arivaldo Lopes, a Latin American telecommunications analyst, said that the fight to ban Huawei in Brazil was a partisan squabble that would only help to further the digital divide in the country, where an estimated 20 million households lack internet access. “Essentially, you’re going to be wasting resources,” Lopes told Rest of World, “just to comply with a [domestic] political issue. And that would be a huge burden for operators here.”
Huawei has been operating in Brazil for over 20 years. Most of the country’s telecommunications companies rely on the Chinese firm for the equipment to run their 3G and 4G networks. The largest cellphone company in Brazil, Vivo, uses Huawei equipment for 65% of its networks. This is not necessarily because of Chinese political influence in the region but a paucity of options — the only other major suppliers are Finland’s Nokia and Sweden’s Ericsson.
“Essentially, you’re going to be wasting resources, just to comply with a [domestic] political issue. And that would be a huge burden for operators here.”
After then-President Trump convinced his ally Bolsonaro that Huawei equipment represented a security threat — an allegation that the analysts Rest of World contacted for this article disagreed with — Brazil began looking into legal options to ban it from the country’s planned 5G network. In December 2020, Reuters reported that Bolsonaro’s national security adviser and ministry of communications were looking for security provisions to impose on telcos and suppliers as a route to ban Huawei.
Pushback came quickly. Brazilian telcos were particularly worried. They argued that banning Huawei would force unnecessary costs to replace entire infrastructures, which they estimated could cost 100 billion reais, or around $18 billion. It would also essentially create a duopoly in Brazil with only Nokia and Ericsson supplying equipment. With the three companies currently fighting aggressively for new contracts, removing a bidder would likely drive up costs for telcos.
As early as June 2019, Brazil’s vice president signaled that the government was unlikely to ban Huawei as it planned its 5G network because of the financial burden. Although key allies of Jair Bolsonaro — including his son Eduardo — continued to criticize the Chinese company, their attacks remained rhetorical.
Lopes said that the idea of blocking a major telecommunications vendor from participating in the market was unprecedented in Brazil. Huawei had complied with the same security standards as Nokia and Ericsson, and, even if the government did end up blocking the company, the result would most likely be a lengthy legal battle with the country’s own telecommunications corporations. “We were in a stalemate here in Brazil before the pandemic,” Lopes told Rest of World. “We didn’t have clarity as to who would win this tug of war.”
Lopes agreed that the issue of vaccines was a tipping point — not only in favor of China, though, but of Brazil’s private sector. It was also a major win for Bolsonaro’s political opponents, who had been trying to secure China’s vaccine for months.
João Doria is the governor of Brazil’s most populous state, São Paulo. It was Doria, not Bolsonaro, who led the partnership with the Chinese company Sinovac, which created CoronaVac. Bolsonaro had disparaged the Chinese vaccine, instead signing a deal for the Oxford-AstraZeneca candidate. As a result, after CoronaVac was approved, it was Doria who oversaw the January ceremony where the first vaccine was administered on Brazilian soil. After the massive success of the event, Lopes said that Bolsonaro realized he had to “grab the vaccination story back.”
Four weeks later, in early February, Bolsonaro sent his communications minister, Fábio Faria, to Beijing. As The Times reported, it was on this trip that Faria visited Huawei and appealed directly to the company for vaccines. Unmentioned in the article was that Faria also visited Finland and Sweden as part of a due diligence tour to the companies that would be supplying the equipment for Brazil’s 5G network. In Sweden, Faria met with Marcus Wallenberg, who serves on the boards of both Ericsson and AstraZeneca.
There is little doubt that Bolsonaro sent Faria not only to negotiate with Huawei executives but to help procure vaccines. Even so, this was an act of contrition by an entrenched administration facing opposition on its domestic flank. “The government basically had to make friends with China to fix the problem that they created beforehand,” Lopes told Rest of World.
The trip did not even lead to a full concession to Huawei. Two weeks later, Anatel announced that Huawei would in fact be allowed to supply equipment to Brazil’s telcos. Then, days before The Times article came out, Faria held a public hearing on 5G before the chamber of deputies. Now, Faria said, Brazilian operators would have to create a private 5G network for exclusive use by the government, separate from the public-facing consumer one. That network would bar Huawei equipment.
According to Andre Gildin, a telecommunications expert at RKKG Consulting, this new distinction did not make any sense from a market perspective — Huawei was already complying with Brazil’s security standards. From the political side, though, it meant that the Bolsonaro faction could still claim a win. And with Anatel estimating that the private network would only cost a billion reais, or around $180 million, Huawei wouldn’t be missing out on much.
As the pandemic continues to rage, vaccine diplomacy is a clear dynamic that highlights the growing divide between wealthy and developing nations. It was on display this past week when the Biden administration agreed to send excess AstraZeneca vaccines to Mexico, conveniently coinciding with Mexico agreeing to tighten security along its Central American border.
It seems that the biggest difference between China and the United States is that China is willing to negotiate with more of its vaccines. At the beginning of March, The Associated Press estimated that Chinese vaccines have been administered in more than 25 countries and delivered to another 11, pledging about a half a billion doses. The United States, meanwhile, is sitting on tens of millions of doses of the AstraZeneca vaccine.
For Brazil, CoronaVac did not represent an act of diplomatic strong-arming by China but the way out of a domestic quagmire. “We probably would still be going through this stalemate, if it weren’t for the vaccine,” said Lopes.
