In 2018, struggles arose between China and Brazil in terms of both of their economic markets. President of Brazil, Jair Bolsonaro, vowed to ensure he eased ties with Beijing while simultaneously being able to speed up domestic development – although he knew this would be tough. Uncertainty was at the hands of all Brazilians as they stressed over the leader’s lack of international experience (Jeong-Ho, 2018). “Brazil’s far-right president-elect could struggle with his twin commitments to cut Chinese investment in his country and accelerate its economic development, given that China is – and is likely to remain – Brazil’s biggest trading partner, diplomatic observers said (Jeong-Ho, 2018). Bolsonaro was criticized for his Trump-style campaign approach which warned against Beijing’s growing societal influence as well as amplifying the fears about China’s potential investments in Brazil’s energy and infrastructure sectors. Bolsonaro stated at a rally in 2018, “China isn’t buying in Brazil. China is buying Brazil. This is a big problem that we should be worried about … Are you willing to leave Brazil in the hands of the Chinese?”
Fast forward to today, in less than just a year, Brazil is making steps into conquering the Chinese economic market. Showing that they too wont back down from diversity, threats, and the fear of lack of experience extended from their country’s leader. In reality, Brazil has overtook China in consumer sentiment. As of last Monday, China now sits at third place in terms of overall consumer sentiment, with Brazil and India at first and second place respectfully. According to the bank’s managing director of global thematic research, Eugene Klerk, China is now showing signs of weaker readings in spending intentions compared to those in Brazil and India (Tay, 2019). “If we look at the data this year, we find consumers particularly optimistic in India and we also find consumers in Brazil becoming a lot more optimistic,” Klerk said. “We see a different picture is in China” (Tay, 2019). Durable good within these countries, such as cars and other luxurious items, are what have been impacted most by the decline and overall consumer economical change between China and India. Due to the decline, it has unforeseen declining rates for these items, but a definite upswing in “structural growth” in local brands and goods (Tay, 2019). Klerk stated, “The decline in spending intention across a range of luxury items, he said, suggests the narrative is more of an economic headwinds story rather than a conscious decision to stop spending money on cars (Tay, 2019).” China’s $13 trillion economy has been continuously slowing down, with no help from the contributing trade war between China and the U.S. that has only added more fuel to the fire and aggravated the overall slowdown. Beijing has lowered its economic growth target to between 6 and 6.5 percent for 2019. That’s compared to last year’s expansion of 6.6 percent, which marked the country’s slowest pace of growth since 1990 (Tay, 2019).
Still seeing structural growth in premium brands: Expert from CNBC.
We will undoubtedly continue to see growth within Brazil’s economy. We must be mindful that Brazil has a large set of natural resources, such as timber and metal, and we all know that with the path the earth is taking, there is a chance that natural resources will be even more limited than we already know of them to be. Due to the advantages of having these natural resources, Brazil is being viewed as the forefront of the world’s economy. Although this is the truth, economic disparity between the nation’s rich and poor still exists and continues to be an issue, making it hard for crime rates in the country to decline (PSU, 2019). We will continue to see growth in Brazil as their economy explodes even more so.
References:
Tay, Shirley. “Brazil Overtakes China in Consumer Sentiment, According to Credit Suisse Survey.” CNBC, CNBC, 25 Mar. 2019, www.cnbc.com/2019/03/25/brazil-overtakes-china-in-consumer-sentiment-credit-suisse-survey.html.
Jeong-Ho, Lee. “China Trade vs Economic Growth: the Dilemma for Brazil’s New Chief.” South China Morning Post, 29 Oct. 2018, www.scmp.com/news/china/diplomacy/article/2170726/china-trade-vs-economic-growth-dilemma-brazils-new-trump-style.
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