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Brazil Sees China and India as Model and Threat

The challenges posed to Brazil by the development of China and India will be debated starting today till May 12 at the XVII National Forum, sponsored by the National Institute of Superior Studies (Inae), at the headquarters of the National Bank of Economic and Social Development (BNDES), in Rio de Janeiro.

The central theme of the event, which will be opened by the Minister of Finance, Antônio Palocci, representing President Luiz Inácio Lula da Silva, will be “China and India as Challenge and Example and Brazil’s Positive Reaction.” The inaugural session will deal with the basic conditions for sustained growth.


According to the former Minister of Planning, João Paulo dos Reis Velloso, Brazil faces the risk of losing ground to China and India in the global arena. In Velloso’s view, the two countries are increasingly becoming Brazil’s biggest competitors among the emerging countries.


According to data from the Foreign Trade Studies Center Foundation (Funcex), whereas China’s exports grew fivefold between 1993 and 2003, from US$ 92 billion to US$ 428 billion, and India’s tripled, from US$ 21.6 billion to US$ 57.1 billion, Brazil’s sales abroad during this period only doubled, from US$ 39 billion to US$ 73 billion.


Reis Velloso explains that the dynamism of the two rivals represents, at the same time, an example and a challenge for Brazil.


In his assessment, the two countries “became strong competitors in sectors in which Brazil also wants to compete on the international market.” Steelmaking is one of these sectors, the ex-minister points out.


A study conducted by the Inae, where Reis Velloso occupies the position of General Superintendent, reveals that China and India have also become very competitive in key areas, such as Information Technology, including the area of information services (especially software), in which Brazil is still taking its first steps. Lower labor costs are one of the reasons for this, the Inae study found.


The way for Brazil to react successfully to its competitors’ performance, according to Reis Velloso, hinges on the consolidation of sustained growth, for the Gross Domestic Product to attain an average annual growth rate of “at least” 4 or 5%.


Reis Velloso affirmed that this growth should be based on technological innovation, applied to both industry and agribusiness.


Agência Brasil

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