Economy

Exporting to China generates less revenue for Brazil

china exports

Over the last 12 months, we have written at length about Brazil’s over-dependence on China. In a matter of just a few years, the Asian behemoth rose from being a small trading partner to Brazil’s number one importer and exporter. Over 26 percent of Brazilian products sold abroad go to China—regarding commodities alone, the rate goes up to nearly 50 percent. Thanks to Beijing, Brazil was able to amass a USD 6.5 billion trade surplus over the first four months of 2019.

brazil exports

Relying so much on a single trading partner has multiple downsides. An obvious one is the exposure to any turbulence facing Beijing. Any slowdown in the Chinese economy creates havoc for Brazilian exporters. The running joke in the 1980s was that whenever the U.S. sneezed, Brazil was hit with pneumonia. Replace the U.S. with China, and it stands up today.

But there’s another issue with...

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