The Impact of the Brazil-China Trade Relation on the Brazilian Manufacturing Sector

The Impact of the Brazil-China Trade Relation on the Brazilian Manufacturing Sector
2019-09-04 KKI

Study by Delgerjargal Delgertsetseg

The present paper aimed to review the growing trade relation between Brazil and China, and to examine China’s impact on the Brazilian manufacturing sector. The study tried to distinguish the direct and indirect impacts of China on the aforementioned sector by applying a matrix that had been formerly developed by Kaplinsky and Messner (2008) and Jenkins (2012); then attempted to estimate the size of correlation between that sector and its trade with China and the Chinese growth. The analysis on the Brazilian industrial trend, export and import structure, on China’s effect on the world commodities’ prices, and on the Brazilian real exchange rate showed that the Brazilian manufacturing sector suffered quite much, both directly and indirectly due to the Brazil-China trade relation. In overall, the two countries’ trade relation since 2000 has led to the deindustrialisation and the primarisation of the Brazilian exports that may have negative consequences in the long-term development.

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