Brazil Industry Complains: ‘We Can’t Compete with the Chinese’

In conversations with Brazil’s Minister of Development, Luiz Fernando Furlan, the president of the Rio de Janeiro Industrial Federation (Firjan), Eduardo Eugênio Gouvêa Vieira, announced that his trade association will seek safeguards because of Chinese imports.

According to Gouvêa Vieira, the measures will be necessary because there is not going to be a let up in Chinese commercial aggressiveness.

In a letter to the Minister, the head of Firjan cites the "difficulty of establishing true domestic prices in China due to the fact that the country is not really a market economy, which makes it hard to determine antidumping surtaxes."

According to Firjan, a "disorganized expansion" of imports from China is taking place in sensitive sectors, such as textiles, plastics, aluminum sheets and electronics with harmful effects on domestic Brazilian industries.

Victor Misquey, the president of the Rio apparel trade association says his sector does not want to stop Chinese imports. "We want to compete with them," he says. But that is difficult, he explains.

According to Misquey, shirts from China arrive in Brazil costing from US$ 5.80 to US$ 6.30, while a Brazilian-made shirt will reach the consumer at a minimum cost of US $11.37.

"That is such a big difference that we cannot compete with them," says Misquey, adding that the quality of Chinese products has also improved.

Another problem the Brazilian producer faces is the exchange rate. Whereas a dollar is worth  2.40 reais in Brazil at the moment, it is worth 8.28 yuans in China, with the result that Chinese goods are extremely cheap on international markets.

Finally, there are industrial sector labor costs in China which are around US$ 105 per month (which, although close to the Brazilian minimum wage of 240 reais (US$ 100), is far below what most workers in the Brazilian industrial sector make).

Further complicating the comparison of the cost of labor in the two countries is the fact that Brazilian workers have numerous costly benefits, while the Chinese workers have none.

ABr – www.radiobras.gov.br

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