By FAIZAAN SAMI
BRASILIA: Brazil: China’s unstoppable emergence and influence as an economic super power has led to one of the most important changes to the global economic framework in the modern period.
In the 1990s, the nation sought to consolidate its position regionally by nurturing bilateral trade relations with its neighbours and utilizing soft power to build state legitimacy. Gradually, after the rapid growth of its manufacturing sector, China’s resource-intensive economy has influenced the global expansion of its economic ties in order to sustain its growth pattern.
To meet the rising demand for agricultural and mineral commodities, China has developed trade relations with Latin America, particularly Brazil, which has both sets of resources in abundance. The trade statistics tell the story of a relationship that has developed at an exponential rate. Brazil’s exports to China have increased by US$28.8 billion since the turn of the millennium, while imports have increased by US$24.3 billion during the same period, helping the Latin American country to obtain an advantageous US$5.2 billion trade surplus in 2010.
Trade between the two countries has more than tripled in the past five years to US$56.4 billion, solidifying China’s position as Brazil’s largest trading partner for some time to come. Currently, China’s share of Brazil’s exports is not far below that of the entire European Union.
The major trade items – iron ore and soybeans – account for 83.7 per cent of Brazil’s exports to the Far East, while 90 per cent of the imports from China consist of manufactured goods, which are helping to satisfy the demand of Brazil’s expanding consumer class.
Consuming up to half of the world’s annual output of iron ore, China has found the perfect partner in Brazil, the biggest supplier of the mineral in the world.
Faizaan Sami is a research associate with the Council on Hemispheric Affairs (COHA).