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Brazil must balance trade relation and avoid ‘anti-China feeling’

Friday, November 4th 2011 - 08:11 UTC
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Matias Spektor, Professor at the Getulio Vargas Foundation Matias Spektor, Professor at the Getulio Vargas Foundation

Brazil must balance its trade relation with China, (leading commercial partner) and not allow an anti-Chinese feeling among manufacturers to spoil relations with Beijing said economists in Sao Paulo.

“Brazil does not make much out of this association, but China makes a lot more out of it”, said Matias Spektor, Professor at the Getulio Vargas Foundation during a conference on Brazil’s aspirations to become a global power.

Bilateral trade in the last decade has increased 2.300% but while Brazil provides raw materials, China floods the Brazilian market with cheap shoes, clothing, electronics, cars and motorcycles.

Spektor believes that the United States can help Brazil reach a more solid position when it comes to negotiations with Beijing.

“The US and Brazil are potential allies, Washington can help Brazil sit to the table and negotiate with Beijing a more balanced position”, added the economist.

To feed its growing appetite for food and minerals China, in recent years has consolidated relations with Latin America, particularly with the very rich Brazil.

But with the flood of manufactured goods from China, local manufacturers are loosing competitiveness which generates a strong anti-China feeling, warns Spektor.

“Many Brazilian manufacturers understand that China offers many opportunities, we must strengthen Brazilian business people”, said Charles Tang, president of the Brazil-China Commerce and Industry Chamber.

Tang said China is not responsible for the high costs faced by Brazilian manufacturers to produce and which make them uncompetitive vis-à-vis those imported from China.

In the first nine months of 2011, Brazil-China trade reached 57.6 billion dollars, above the 56 billion for the same period a year ago, according to official data.

The conference organized by the Brazilian association of information technology and communications, Brasscom, and The Economist has convened experts to assess how Brazil can become a world power by 2022.

Top Comments

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  • Dorian

    Really? Ask for U.S. help with China? Maybe so that Brazil can rack up a trade deficit with the latter for 100's of billions, like the U.S.? One must keep in mind that China needs Brazil's food much more than Brazil needs Chinese cheap consumer products. Mme Roussef does well not to listen to economists like Spektor, who propose neo-liberal solutions. Protect Brazilian jobs, put up MORE walls. Don't follow the U.S. down the route of empty factories, trade deficits and ballooning budget deficits. Brazil has done well so far with the model it has followed.

    Nov 04th, 2011 - 10:08 pm 0
  • Fido Dido

    Dorian, I agree with you. neo-liberal solutions is dead for people with a healthy brain. but what brazil must do (I read they already working on it what takes time because of differences of federal and state) is reform their tax code what is effecient for the Brazilian producers (and not for speculators) by keeping tarifs, so you don't become a slave. According to Eike batista in an interview he gave on CNBC here in the US, one of the favorite books for him, Dilma Rousseff and Lula is wealth of nation. the best book in the world about true capitalism (true capitalism does have a social face and cares about human capitalism) and where you will find that you need tarifs to protect yourself. It says enough.

    It's a matter of time that China won't be anymore a nation of “slave wages” to keep exporting manufacturing goods. The chinese know it themself and know that other nations will or have figured that out. wait until they have their yuan backed by gold and silver, what the chinese are working on since the creation of the Pan Asian gold exchange. clock is ticking, faster and faster. Chinese people are also patience, because that is the best solution for them to be powerful.

    Nov 05th, 2011 - 12:42 am 0
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