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The impact of the emergence of China on Brazilian international trade

Author

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  • Enestor Dos Santos
  • Soledad Zignago

Abstract

We take advantage of a novel dataset that incorporates both the technological content of each product as well as its quality to unveil some new features of Brazil-China’s trade flows and to challenge the view that the emergence of China would imply the deindustrialization of Brazilian exports. The trade between the two countries builds on exports of commodity goods from Brazil to China and of manufactured products from China to Brazil. Looking at the technological dimension of the dataset we show that Brazil (increasingly) exports to China products with lower technological content and (increasingly) imports products with higher technological content. The quality dimension of the dataset reveals that both countries export to each other basically low-quality goods (i.e. products whose unitvalue are in the lower range of world’s distribution of unit-values for the product). We then show that the overlapping between Brazilian and Chinese total exports is limited and that the degree of competition between the two countries is relatively small. We also show that the number of products in which the two countries have comparative advantage declined in the last years and that in the last years both countries increased their advantage in the products in which they already had advantage in 1994 and lost advantage in the sectors in which they had small advantage in producing in 1994. Available data analyzed in this paper evidences that in the last years Brazilian exports of commodity products increased significantly due to the emergence of China and other Asian countries. We show, however, that Brazilian exports of high technological content and high quality increased more than the average and more than low technological and low quality exports in the last years. Overall, the emergence of China has been supporting a displacement of Brazilian exports not only towards naturalbased products but also to goods with higher quality and higher technological content.

Suggested Citation

  • Enestor Dos Santos & Soledad Zignago, 2010. "The impact of the emergence of China on Brazilian international trade," Working Papers 1022, BBVA Bank, Economic Research Department.
  • Handle: RePEc:bbv:wpaper:1022
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    References listed on IDEAS

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    1. Gaulier, Guillaume & Zignago, Soledad, 2004. "Notes on BACI (analytical database of international trade). 1989-2002 version," MPRA Paper 32401, University Library of Munich, Germany.
    2. Lora, Eduardo, 2005. "¿Debe la América Latina temerle a China?," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(287), pages 459-493, julio-sep.
    3. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2008. "Specialization across varieties and North-South competition," Economic Policy, CEPR;CES;MSH, vol. 23, pages 51-91, January.
    4. Nanno Mulder & Rodrigo Paiilacar & Soledad Zignago, 2009. "Market Positioning of Varieties in World Trade: is Latin America Losing Out on Asia?," Working Papers 2009-09, CEPII research center.
    5. Jorge Blázquez-Lidoy & Javier Rodríguez & Javier Santiso, 2006. "Angel or Devil? China's Trade Impact on Latin American Emerging Markets," OECD Development Centre Working Papers 252, OECD Publishing.
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    Cited by:

    1. Chen, Lurong & De Lombaerde, Philippe, 2014. "Testing the relationships between globalization, regionalization and the regional hubness of the BRICs," Journal of Policy Modeling, Elsevier, vol. 36(S1), pages 111-131.
    2. Alicia Garcia-Herrero & Enestor Dos Santos & Pablo Urbiola & Marcos Dal Bianco & Fernando Soto & Mauricio Hernandez & Rosario Sanchez & Arnulfo Rodriguez, 2014. "Competitiveness in the Latin American manufacturing sector: trends and determinants," Working Papers 1411, BBVA Bank, Economic Research Department.

    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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