Brazil should not fear China's economic reform, according to IBRE

According to the researcher, the results of economic reform suggested by Chinese leaders should be completed by 2020 - giving Brazil?s government the time to act, so that the consequences of the decrease in industrial commodities exports are not so strongly experienced.
Institucional
16 Janeiro 2014

The economic reform proposed by the new Chinese leadership, Xi Jinping, should not affect the trade with Brazil. This is what the researcher of the Applied Economics department of the Brazilian Institute of Economics (FGV/IBRE), Lia Valls, believes. The objective of the reform is to give more balance to China's economic growth, prioritizing domestic consumption and reviewing resource allocation. With that, some exporters of industrial commodities - one of the sectors that should have reduced investments in the country - can be affected.

In Lia's opinion, even if the exports of heavy industry products, such as iron ore, are reduced, Brazil can count on the diversity of its exported products. What we export to China is not only connected to infrastructure. We also export soybeans, for example, and we are also entering the export market for pork in the country, she says.

Also according to the researcher, the results of economic reform suggested by Chinese leaders should be completed by 2020 - giving Brazil?s government the time to act, so that the consequences of the decrease in industrial commodities exports are not so strongly experienced.

China's population will continue to grow and they don't produce enough food internally for the population, a fact that opens doors for Brazil to export more food to the country. We have a large diversification capacity. Therefore, the outlook on the consequences of the reform for Brazil is not so negative, says Lia Valls.

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