From January to August this year, the total bilateral trade volume between China and Brazil exceeded 100 billion US dollars. Brazil has long been expected to become the next emerging developing country with global influence.
China-Pakistan bilateral trade volume reaches highest level since 1997
Since 2009, China has been Brazil’s main exporter and the main importer of Brazilian products. China mainly exports industrial manufactured products, while Brazil mainly exports agricultural products, energy and mineral products.
Although the current world market is full of uncertainties, the bilateral trade volume between China and Pakistan from January to August 2023 still reached 102.618 billion U.S. dollars, setting a record for the same period since relevant statistics were available in 1997.
Among them, Brazil’s total exports to China were US$67.883 billion, a year-on-year increase of 6%; Brazil’s total imports from China were US$34.735 billion, a year-on-year decrease of 12.6%.
Why choose Brazil?
First, Brazil has enabled RMB settlement, which can reduce trade costs.
In March this year, the Central Bank of Brazil announced that the renminbi had surpassed the euro to become the country’s second largest international reserve currency.
According to a report released by the Brazilian Central Bank, the RMB appeared in Brazil’s international reserve currency for the first time in 2019. As of the end of 2022, the RMB accounted for 5.37% of Brazil’s international reserves, exceeding the euro’s 4.74% proportion.
A statement from the Brazilian Trade and Investment Promotion Agency announced that Brazil and China have reached an agreement to allow bilateral trade transactions in their national currencies. When China and Brazil conduct large-scale trade and financial transactions, they can bypass the US dollar as an intermediate currency and directly exchange RMB and real for each other.
For bilateral trade, an agreement on local currency settlement will reduce the cost of trade services and improve the level of trade facilitation. In May this year, China and Pakistan announced that they would no longer use the U.S. dollar as their intermediary currency and completed their first cross-border RMB settlement business.
Secondly, Brazil’s default risk is relatively small. The problem of buyer’s payment arrears has always been a pain for export companies, but according to the data, the risk of exporting to Brazil is smaller than that of other countries.
In the China Sinosure Insurance SMERI index, the overall credit risk of transactions between small, medium and micro enterprises and Brazilian companies is rated as “medium”, and shows a downward trend year by year.
Research shows that Brazil’s demand for imports of Chinese goods and services may grow; the standardization of trade laws and regulations may increase; the country’s tariff levels on Chinese goods exports may remain unchanged; anti-dumping and countervailing measures on Chinese exports may become stronger Maintain the status quo; the intensity of implicit trade barriers to China’s exports may not change significantly.
And as early as 2008, the Standard & Poor’s rating agency rated Brazil as a “reliable investment” for the first time. As a result, Brazil has entered the ranks of reliable countries for foreign investment without the risk of default.
The last and most important thing is that Brazil has a large population and loves shopping.
The Latin American market is in a demographic dividend period, with a total population of 660 million, of which Brazil accounts for 212 million, making it the most populous country in Latin America. It is a market with great potential, and it is also a place where my country’s foreign trade companies and independent foreign trade people cluster.
Although Brazil’s overall economic situation has been poor in recent years, Brazil’s e-commerce market has made a breakthrough in a sluggish market environment, bucking the trend and growing by 13%.
Brazil has excellent innate conditions for e-commerce. It has a huge online shopping group with 130 million Internet users, accounting for 61% of the total population. As the 9th largest e-commerce entity in the world, its e-commerce retail only accounts for 5% of the retail market. %, the potential that can be tapped cannot be ignored.
Exporting to Brazil Advice
1. Be familiar with Brazilian customs clearance rules. The Brazilian government requires all imported goods to obtain an import license (automatic import license and non-automatic import license).
2. Brazil is one of the countries with the most trade barriers in the world. The first is tariffs, the second is anti-dumping, countervailing and other restrictive measures, and the third is other trade protection measures.
3. Brazilian law is different from Anglo-American law and civil law. It is a mixture of Portuguese law and Napoleonic civil law. There is no civil or commercial judicial assistance treaty between China and Brazil as a basis for the execution of litigation awards.
If a foreign creditor files a lawsuit in Brazil, it is best to choose a location in a larger international city, where the judges usually have rich business experience.