Volume 43, Number 168,
January-March 2012
Threats and Opportunities for Brazil's Trade
with China: Lessons for Brazil
Fernando Augusto Mansor de Mattos and Marcelo Dias Carcanholo

Table 7 shows that between 2000 and 2005 Chinese exports to the Mercosur tripled and Brazilian exports grew by 50%. Between 2005 and 2010, Chinese exports continued to grow significantly.27 Over the entire period (2000 to 2010) it can be seen that the type of Chinese exports to the Mercosur changed with an increase in the share of high-tech goods in particular and also medium-tech within the total exported by China to the Mercosur.

Between 2005 and 2010, Brazilian exports to the Mercosur doubled, but growth was more intense up until 2008, with a drop in 2009, an atypical year, increasing again in 2010 and reaching a slightly higher level than that of 2008. Considering the whole period from 2000 to 2010, this growth was accompanied by a drop in the relative share of high-tech manufacturing in the total exported by Brazil (13.8% in 2000 and 9.9% in 2010, although in absolute terms the value doubles).28 Comparing the figures for 2009 with those for 2010 there is clearly a new drop in the share of high-tech manufacturing in the total (10.8% and 9.8% respectively).

The evolution of Chinese and Brazilian exports in absolute terms shows that between 2005 and 2008 the value of Chinese exports to the Mercosur surpassed Brazilian exports (Table 7); in 2005 high technology Chinese imports surpassed those of Brazil, and from 2008 (at least) Chinese exports of low and mainly high tech goods surpassed Brazilian exports significantly although the export process for Brazilian products should in principle be simpler than for Chinese products. The difference between medium-tech manufacturing exports is rapidly decreasing. 29

Table 8 shows that there is a rapid substitution process taking place of Brazilian products for Chinese products in the Mercosur markets. The data reveals a considerable increase of Chinese products in Mercosur imports, rising from 0.8% in 1990 to 3.2% in 2000, 13.2% in 2008 and 16% in 2010. At the same time, Brazil's share rises moderately between 2000 and 2005, and after a climb in the 1990s, begins to drop between 2005 and 2008, rising again between 2008 and 2010, and reaching a level below that of China's in 2010 (12.4% compared with 16%). Equally worrying, from a Brazilian point of view, is that China's share now surpasses Brazil's in high and low-tech manufacturing, but not however medium tech manufacturing, owing to the strength of Brazil's automotive exports to the region.

27 With a drop only in 2009 as a result of the impact of the international crisis on the volume of world trade, and also on the revenue of Latin American countries. Between 2005 and 2010 Chinese exports to the Mercosur increased almost fivefold.

28 In absolute terms, the value of Chinese exports in high-tech manufacturing multiplied by 20 between 2000 and 2010, reaching a value 5 times that of Brazil's for products with the same level of technology.

29 Brazilian medium-tech exports still have an advantage over China's, particularly in the automotive industry established in Brazil, the tradition and scale of foreign trade with Mercosur member countries, as well as those of the aladi being particularly significant. However, this advantage has reduced in recent years, amounting to nearly 4,2 billion dollars within medium-tech products as a whole in 2005, and merely close to 1,5 billion dollars in 2010.

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PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 194 July-September 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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