In the first two months of 2024, Brazil’s exports to China surged by 49.1%.
This growth, fueled by iron ore, oil, and soybean exports, contributed significantly to Brazil’s trade surplus.
The Trade Indicator (Icomex) report from the Getúlio Vargas Foundation underscores the impact of these exports, attributing 43% of Brazil‘s $11.9 billion surplus to trade with China.
The record $5.4 billion surplus in February alone illustrates Brazil’s economic dependence on China, particularly for commodity exports.
This dynamic poses challenges, especially if China’s growth dips below its 5% target, potentially affecting Brazilian exports.
Exports to China, comprising primarily oil, iron ore, and soybeans, accounted for 29.1% of Brazil’s total exports, marking a significant concentration in a few commodities.
This reliance is both a strength and a vulnerability, highlighting the importance of the Chinese market to Brazil’s economy.
The report also notes a 21.5% increase in exports to the United States, indicating diversification efforts.
Moreover, the rise in imports, especially of capital and intermediate goods, signals investment in Brazil’s production capabilities.
Yet, the potential for imported deflation to impact domestic production raises concerns for Brazil’s trade policy and relations with China.
This growth and its implications underscore the interconnectedness of global markets and the delicate balance countries must maintain in their economic relationships.