The Effect Of The Chinese International Trade On The Brazilian Trade Balance

According to the United Nations Conference on Trade and Development (UNCTAD, 2012), after China officially joined the World Trade Organization, at the end of 2001, its share on world's exports increased from 4.34%, in 2001, to 10.50%, in 2011. At the same period, China's share on world's imports increased almost 150% - from 3.84% to 9.53%. The increase in international trade happened at the same time China's industrial sector changed the composition of its Gross Value of Production (GVP) towards products that use more scale and differentiated technologies, while natural resources and labor intensive products lost their share in total GVP (Diegues; Angeli, 2011). Most of researches in the field agree that China's economic growth is related somehow to its fast industrialization process on the last two decades, as a consequence of the transition process towards a more market oriented economy. In addition to that, it is also agreed that the exchange rate depreciation has played a major whole while setting up China as one of the most important players in the international market. Trade relations between Brazil and China have intensified in recent decades while caused changes in the list of imported and exported products of the country. In this context, the present study aimed to analyze the evolution of imports and exports of Brazil ? China between 2000 and 2011. Two different forms of sectorial analysis were analyzed which allowed the identification of the most significant exported sectors. The sectorial analysis was performed following two criteria: (i) technological intensity and (ii) types of technology. The study used import and export data between Brazil and China provided by the Brazilian Ministry of Development, Industry and Foreign Trade. It was found that the trade between Brazil and China has become more intense in the most recent years mainly because the Brazilian exports have been more focused on commodities and natural resource-based products. Chinese exports to Brazil, on the other hand, are more concentrated in products of high and medium-high-technology, based mainly on differentiated technology and scale, but with a wider range of products compared to the Brazilian exports. We conclude that a regressive specialization of Brazilian exports to China has been happening probably as a result of both the direct and indirect trade effects between the countries. Key-words: China; Brazil; trade; specialization