10. China has become Brazils biggest economic partner nq

The industrial policy also features an experimental

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The industrial policy also features an experimental cut in the payroll tax for footwear, textile, furniture and software firms. But officials are at pains to point out that, rather than help specific industries, the main thrust of the new policy is to try to boost competitiveness more generally by promoting innovation, higher education and training. Many Brazilian industrialists distinguish between Chinese and other competitors. “We don't believe in protection against efficiency,” insists Roberto Giannetti of São Paulo's Federation of Industries (FIESP). But he adds that “today we can't accept China as a fair trader”. FIESP says it did not want the tax increase on imported cars. But it complains that China is dumping diverted exports from depressed Europe. Meanwhile, Brazilian manufacturers trying to export to China face steep non-tariff barriers on manufactured goods, such as obstructive state purchasing agents. Rubens Ricúpero, a former finance minister, thinks that rather than acquiesce in the disappearance of its industries, Brazil will move towards managed trade with China, at least in some sectors. Two things may serve to reduce some of the trade tensions. The first is that Chinese investment in Brazil is taking off. Until 2009 this amounted to only about $500m. But in 2010 investment of $19 billion was announced, and $12.7 billion finalised, according to calculations by the Brazil-China Business Council, making China the largest single foreign investor in Brazil that year. Of that sum, just three acquisitions (two
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