With Europe and the United States in the economic doldrums, Asian manufacturers are setting their sights on Brazil’s lucrative consumer market ahead of the 2014 World Cup and the 2016 Olympics.
This week, the manufacturers took their roadshow to Sao Paulo, Brazil’s economic capital, for a three-day trade fair showcasing samples of products — such as electronics, textiles, home goods and building materials — they hope to sell across the region.
China Sourcing Fairs, the first such event to be held there, drew 340 suppliers from mainland China, 41 from Hong Kong, 29 from India and seven from Taiwan, as well as potential buyers from across Brazil and South America.
With a population of 191 million people and an expanding middle class now estimated at 95 million, resource-rich Brazil is now the world’s sixth largest economy and is expected to ride a bigger boom as it invests billions of dollars in infrastructure projects for the World Cup and the next summer Olympic Games.
Brazilian manufacturers have long complained about the influx of cheap Chinese imports. And authorities imposed strict quality controls earlier this year on imports from world number two China and other Asian nations to halt the flow.
The measures apply to 240,000 models of goods, including textiles, steel products, car parts and children’s items, particularly toys.
One major hurdle facing Brazilian retailers and their Asian suppliers is the heavy taxation on their products.
Official Brazilian statistics show that Brazil-China trade rose seven per cent to US$37.2 billion in the first half of this year, compared with the same period in 2011, with the South American powerhouse registering a surplus of US$5.1 billion.
In 2009, China dislodged the United States as Brazil’s largest trading partner. Beijing is also the largest investor here.
Iron ore and soybeans represent more than 80 per cent of Brazil’s exports to China, which in turn sells mostly manufactured goods to Brazil.
There are some investment opportunities there! Brazil has the largest Japanese population outside of Japan