The words “Made in China” are pretty common in Brazil. The Asian giant is Brazil’s biggest trade partner, meaning the economic effects of the coronavirus outbreak are having worrying repercussions in Brazil. Fears of infections have led a big chunk of China’s workforce to stay home, which has affected supply chains of many Brazilian factories: electronic manufacturers are reporting problems in receiving components, while similar complaints have been made by automakers, pharmaceutical groups, and so on.
On February 24, investors began panicking when the World Health Organization raised its risk of a global coronavirus outbreak to “high.” Since then, the crisis drove China’s economy into reverse, said Pantheon Economics in a note to clients. And Brazilians have been feeling the pinch as a result.
The presence of China in Brazil is huge, with even the country’s Carnival holidays undergoing something of a “Chinification,” with a huge amount of party supplies being imported from China as of the 1990s. Have you ever seen the colorful umbrellas used in the frevo displays of Pernambuco? Well, a huge majority of them are made in China.
In general numbers, official Brazilian foreign trade data shows that in 1997, Brazil imported USD 1.71 million worth of party goods from China. In 2019, imports leapfrogged to USD 10.14 million. While it is an impressive increase, it’s still short of the USD 14.3 million recorded in 2014, before Brazil entered into an economic recession.
Now, even the coronavirus is coming from China. Is it time homegrown diseases dengue fever, Zika, and Chikungunya to devise a new business strategy?