MercoPress, en Español

Montevideo, May 22nd 2024 - 17:43 UTC

 

 

China making inroads into Brazilian trade with Argentina, says CNI

Thursday, April 24th 2014 - 07:59 UTC
Full article 7 comments
“We are losing our market in Latin America. Our competitiveness is being constantly called into question”, complains Carlos Abijaodi “We are losing our market in Latin America. Our competitiveness is being constantly called into question”, complains Carlos Abijaodi

Argentina's economic situation has hit Brazil harder than its other commercial partners, as China has been making inroads into Brazilian trade with Argentina. Chinese exports to Argentina have more than tripled in the last ten years, according to a study carried out by Brazil's National Confederation of Industry, (CNI).

 In 2005, Brazilian products amounted to 36.5% of Argentine imports. Last year, this figure was 26.5%, and in the first two months of 2014, it had fallen further, to 24.8%.

Meanwhile China has made significant advances, and not only at the expense of Brazil. US industry has also suffered, although the European Union increased its trade with Argentina during this period.

Argentina is important for Brazil manufacturing since it imports essentially industrial products. That is why poor Argentine economic performance has had such a negative effect on Brazil's trade balance. In the first quarter of this year, the drop in exports to Argentina represented more than a quarter of the total 1.5 billion dollars reduction in Brazilian exports.

“We are losing our market in Latin America. Our competitiveness is being constantly called into question. We have to broaden our relations with other commercial partners,” says Carlos Abijaodi, director of Industrial Development at the CNI.

Of the ten commercial sectors which export most to Argentina, nine have recorded falls in sales since 2011, when Brazil's exports to its neighbor were at record levels.

The CNI study suggests that if Brazil had maintained this level, it would have received another 2.2 billion last year - enough to double Brazil's trade balance in 2013.

Chinese firms are well known for being highly competitive, offering low prices and having access to generous export financing. Moreover, the type of goods currently being offered by China are more compatible with the Argentine economic situation than those being sold by Brazil.

“Brazilian products got more expensive. As well as that, Brazil sells finished vehicles and equipment, making trade more difficult. China essentially sells just parts,” says Matias Carugati, chief economist at the Argentine consulting firm M&F.

Chinese parts are then used in the production of local goods. It is no coincidence that the sectors that have most shrunk recently in Argentina are electronics and information technology.

Argentina has been trying to set up new factories, which has meant that the market is less open to Brazilian products. Exports for cellular phones, for example, which were once worth 740 million dollars, fell to $200,000 in 2013.

Top Comments

Disclaimer & comment rules
  • Briton

    Beware of eastern wise men carrying gifts,

    All things have to be paid for, and sometimes carry a high price.
    .

    Apr 24th, 2014 - 12:11 pm 0
  • Tik Tok

    Why on earth does Brazil still pursue having Mercosur.

    Apr 24th, 2014 - 04:58 pm 0
  • ChrisR

    “We are losing our market in Latin America [the World in the UK’s case]. Our competitiveness is being constantly called into question. “

    Just like the UK was under the unions and although The Blessed Margaret made eunuchs of them it was too late to stop the rot. The UK overpaid and under-produced for decades, just like Brazil has for the last 50 years. THAT is the problem.

    Brazil can only hope that the Chin’s industrial peasants will continue to argue for and actually get more wages. This puts up the prices of Chin crap and eventually will kill the market for their products.

    But I suspect it will be too late for Brazil.

    Apr 24th, 2014 - 05:47 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!