China: Brazil's Biggest Importer Surpassing the USA

Sign of the times: China surpassed the USA as the biggest market for Brazilian products, according to Brazilian newspaper O Estado de Sao Paulo in a report published today. The dollar amount exported to China grew by 62.7% in Q1 2009. The biggest increases were in soya, pulp and paper products, iron ore, oil, commodities which correspond to 76% of all exports to China.

Brazil seems to be one of the biggest beneficiary of the new Chinese policy which is shifting away from being an export-driven economy to a focus on internal economy. The $600B stimulus package seems to he having an effect.

The stimulus package has an emphasis on contruction, thus iron ore is a direct beneficiary of the policy. With only 10% of its land suitable for agriculture, China is also increasing its food imports.

Other facts:

- I spite of an overall drop in exports, Brazilian trade surplus was still 9% in Q1.

- The level of Brazilian exports to China are expected to continue in the next quarter.

- China is now responsible for 46% of the exports to Asia