10. China has become Brazils biggest economic partner nq

Of chinese cars rose almost fivefold last year the

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of Chinese cars rose almost fivefold last year; the new year has brought complaints of dumping of Chinese mobile phones and shoes. With extraordinary speed, China has become Brazil's most important economic partner: total trade between the two countries has risen 17-fold since 2002. But frictions are increasing almost as fast. Although Brazil enjoys a big overall trade surplus with China, most of its exports are of commodities (mainly iron ore, soya beans and crude oil). It has a big deficit in manufactures (see chart). The reasons are not hard to spot. In recent years Brazil's manufacturers have been hobbled by a strong currency, high interest rates, high taxes, poor infrastructure and a poorly educated workforce. “Brazil faces a
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big competitive challenge, and the relationship with China only dramatises that,” says Sérgio Amaral, a former industry minister who chairs the Brazil-China Business Council. The government's response is a mix of short-term protectionist measures combined with modest steps towards more constructive longer-term policy changes. The tax rise on cars was announced last September, as part of a new industrial policy. The aim was to bully carmakers without plants in Brazil to hurry up and build them. This seems to be working: JAC Motors, BMW, and Jaguar Land Rover, a unit of India's Tata Motors, have all announced plans to build factories in Brazil since the import tax was unveiled. The industrial policy also features an experimental cut in the payroll tax for footwear, textile, furniture and
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of Chinese cars rose almost fivefold last year the new year...

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