FGV's Brazilian Institute of Economics partners with Chinese Think Tank

Institutional
24 May 2013

Two diverse economies, with totally opposite cultures can indeed learn quite a lot from one another. It was through this thinking that the Brazilian Institute of Economics at FGV (IBRE) and the Institute of Latin American Studies in China have partnered to exchange ideas on important topics such as innovation, social policies and distribution of income, savings and public finance, among others. The results of this exchange are in the book Surmounting the Middle Income Trap: the Main Issues for Brazil, released on May 6 at a seminar on the subject in Beijing. IBRE is focused on China. Our goal is to establish partnerships with Chinese think tanks, in this case the CASS, an extremely important body of the Chinese government, says IBRE's director, Luis Guilherme Schymura, remembering that the strategy of the institute meets FGV's interest in internationalization. The book aims to show, by comparing experiences, how two of the largest economies in the world, classified by the World Bank as middle-income countries, are dealing with growth challenges. According to one of the organizers of the work, Fernando Veloso, researcher in IBRE's Applied Economics Area, after the structural and technological changes, the challenge is to create new technologies and increase productivity of the sectors, especially services. The major concern of the Chinese is going through the same experience as Latin America, which, with the exception of Chile, never left this income standard he analyzes. Similar challenges, different cultures In China, unlike Brazil, the state has an important role in all sectors, and while this should be reviewed in the coming years, it can serve as an example to Brazilians. Especially with regard to governance and the execution of public investments. With China we can better understand the issue of public investment, which is difficult to take off here in Brazil. There they have a lot of facility in this area. Things happen quickly and efficiently, but here it is very difficult and bureaucratic, Schymura reflects. Lia Valls, also a coordinator of the work and Applied Economics researcher at IBRE, agrees and adds that industrial policy is another important point to be debated. For the economist, it is essential to keep in mind the possibilities of new negotiating fronts that may arise between the two countries. We must be clear that China was important for the growth of our exports. Today our interest goes beyond that, we want our relationship with China to exceed trade and move to a more dense relation in terms of investment, she says. The Chinese, in turn, have a strong interest in the actions and social policies that Brazil has adopted in recent years, which have significantly reduced the indicators of poverty and social inequality. We have much to trade with them. Obviously China is totally different from Brazil, but it is interesting because it is a strange country to us, and exactly because of that, it is much more attractive from an intellectual and exchange standpoint, says IBRE's director. Mission to Beijing Lia Valls, Fernando Veloso and Fernando de Barbosa de Holanda Filho - researchers in Applied Economics at IBRE all attended the book launch - as well as Marlos Lima, executive director of the Latin American Center of Public Policy at FGV's International Affairs Division (DINT) and Eduardo Marques, the division's International Relations manager. In November it is the Chinese's turn to visit Brazil for the launch of the work in Rio de Janeiro.