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Fear for Manufacturing? China and the Future of Industry in Brazil and Latin America*

Published online by Cambridge University Press:  29 March 2012

Rhys Jenkins  and
Alexandre de Freitas Barbosa
Rhys Jenkins
Affiliation:
University of East Anglia. Email: r.o.jenkins@uea.ac.uk
Alexandre de Freitas Barbosa
Affiliation:
University of São Paulo. Email: afbarbosa@usp.br
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Abstract

There has been considerable concern in Latin America over the implications of increased competition from China for local industry. These concerns include the possibility of “deindustrialization,” the increased “primarization” of the region's exports and the difficulties of upgrading manufactured exports into higher technology products. This article examines the impact of Chinese competition both in the domestic market and in export markets on Brazilian industry. It documents the increased penetration of Chinese manufactures in the Brazilian market and the way in which Brazilian exports have lost market share to China in the US, European Union and four Latin American countries. Brazil, because of its more developed and locally integrated industrial sector, is not typical of other Latin American countries and the article also discusses the relevance of the Brazilian experience for the region as a whole.

Keywords

BrazilLatin AmericaimportsexportsdeindustrializationChinese competition
Type
Articles
Information
The China Quarterly , Volume 209 , March 2012 , pp. 59 - 81
Copyright
Copyright © The China Quarterly 2012

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References

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33 Even this figure may be somewhat exaggerated since it includes a lot of semi-manufactured products.

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41 The loss of market share by Brazil (B) to China (C), in a particular product i is defined as:

(1)

where:

kBi is the share of Brazil in total imports of good i by the destination market

kCi is the share of China in total imports of good i by the destination market

Superscript t represents the initial year of the period.

Summing over all products gives the aggregate loss of market share to China:

(2)

42 Although it should be noted that subsequently the US and the EU imposed new restrictions on Chinese textile and clothing imports.

43 This is even more disaggregated than the five-digit SITC level.

44 Data from SECEX/MDIC. The remaining exports are classified as semi-manufactures.

45 Jenkins, R., “The Latin American case,” in Jenkins, Rhys and Dussel, Enrique (eds.), China and Latin America: Economic Relations in the 21st Century (Bonn: German Development Institute, 2009), p. 37Google Scholar.

46 Own estimates from UNIDO data on industrial production and CEPAL data on trade in manufactured goods. Using the same data sources, the estimate for Brazil in 2007 was 2%.

47 Jenkins, “The Latin American case,” Table 5.

48 Own elaboration from UN COMTRADE data on imports by Broad Economic Category (BEC).

49 Jenkins, Chinese Competition, Table 3.

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51 See IEDI, Contibuições para uma Agenda de Desenvolvimento do Brasil (Sao Paulo: Instituto de Estudos para o Desenvolvimiento Industrial, 2011), p. 33Google Scholar. For more detailed proposals on industrial policy for Brazil, see IEDI, Indústria e Política Indusrial no Brasil e em Outros Países (Sao Paulo: Instituto de Estudos para o Desenvolvimiento Industrial, 2011), pp. 67–83Google Scholar.