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.
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