AS I WRITE THIS THERE ARE TWO IRREFUTABLE FACTS THAT HAVE TO BE
ACKNOWLEDGED ONE THE DOMINANCE OF CHINA IS EXPANDING BEYOND THE ORIENT INTO THE AMERICAS BOTH NORTH AND SOUTH AND TWO THE NEW RELATIONS BEING FORGED BETWEEN CHINA AND THESE COUNTRIES IS NOT BASED ON POLITICS OF INTIMIDATION BUT PURE AND SIMPLE MARKET ECONOMICS .OUT THE NUMEROUS NEW PARTNERSHIPS THAT CHINA HAS ENTERED INTO SINCE THE TURN OF THE CENTURY A PARTICULARLY INTERESTING ONE IS WITH BRAZIL NOT ONLY BECAUSE OF ITS’ HUGE POTENTIAL BUT ALSO BECAUSE OF THE DILEMMA IT PRESENTS IN FRONT OF BRAZIL .
IT HAS FOR LONG BEEN A HUB FOR VACATIONERS AND ADVENTURERS BUT NOW IS FAST BECOMING AN ATTRACTIVE CHOICE FOR SOME OF THE MOST TALENTED WORKFORCE IN THE MARKET .A CASUALLY DRSSED AMERICAN STROLLING DOWN IN RIO DE JANERO IS LIKELY TO BE A HEDGE FUND MANAGER OR AN ENTREPRNUER LOOKING TO MAKE IT BIG IN BRASIL AMERICANS LEAD THE IMMIGRATION CHARTS INTO BRAZIL FOLLOWED BY UK .THE EFFECT OF THIS CAN BE SEEN IN THE SKYROCKETING REAL ESTATE AND OFFICE PRICES ESPECIALLY IN RIO WHERE OFFICE PRICES ELICPSE THOSE IN NEW YORK. THIS IS A MAJOR EFFECT OF THE GROWING PROSPERITY OF BRAZIL AND A GROWING MIDDLE CLASS THAT HAS MONEY TO BURN AS A RESULT A PLETHORA OF FINANCE PROFESSIONALS HAVE MOVED TO BRASIL . THE RESULTS OF PROSPERITY CAN BE SEEN EVERYWHERE FROM INCREASED PURCHASE LEVELS TO REDUCED UNEMPLOYMENT LEVELS FROM THE 80’S THE COUNTRY IS TRULY UNDERGOING A TRANSFORMATIVE CHANGE .
SO EVERYTHING IS HUNKY DORY RIGHT? BUT LIKE IN ALL GOOD STORIES THREIN LIES THE STING WHICH CAN BE A CAUSE ON CONCERN FOR THIS ECONOMY IN THE NEAR FUTURE. A BIG REASON FOR THIS ECONOMIC TRANSFORMATION HAS BEEN THE EXPLOSIVE GROWTH IN TRADE BETWEEN BRAZIL AND CHINA BRAZILIAN PRODUCTS SUCH AS IRON ORE , SOYA BEANS AND FUEL ARE IMPORTED IN HUGE QUANTITIES BY CHINA AS IT CONSOLIDATES ITS POSITION AS THE MANUFACTURING OFFICE OF THE WORLD .THE TRADE LEVELS BETWEEN THE TWO ARE EXPECTED TO RISE A FURTHER 30-50% THIS YEAR BUT THERE MAYBE A ROADBLOCK TO THIS GROWTH WHICH IS THE TROUBLED US ECONOMY .US IS THE LARGEST IMPORTER OF CHINESE GOODS AND ONE OF THE FALLOUTS OF ITS OWN HIGH UNEMPLOYMENT RATES IS THAT AMERICA HAS DECIDED TO TAKE SOME OF ITS JOBS BACK .THIS POTENTIALLY MEANS TROUBLE FOR CHINA AS ITS BIGGEST BUYER MAY DECIDE TO GO FOR INHOUSE PRODUCTION AND EXCLUDE CHINA FROM THE EQUATION ALTHOUGH IN REALITY THIS SITUTUATION IS STILL HYPOTHETICAL BUT POLITICAL WILL ON THIS ONE ISSUE SEEMS TO BE FORMING IN WASHINGTON. THIS ALSO MEANS POTENTIAL TROUBLE FOR BRAZIL AS CHINA IS ITS MOST IMPORTANT AND LARGEST TRADE PARTNER AND DEMAND GOING DOWN IN US MAY MEAN LOWER DEMAND OF MATERIALS FROM BRAZIL .
TO COUNTER THIS ONE OF THE STEPS TAKEN BY BRAZIL IS TO BUY A HUGE NUMBER US GOVERNMENT BONDS THUS SUPPLYING US WITH SOME MUCH NEEDED CHANGE AS WELL AS COOLING DOWN ITS OWN ECONOMY WHICH HAS STARTED SHOWNING SIGNS OF OVERHEATING .THIS IS A LITTLE IRONIC AS IT WAS THE US WHO USED TO COBBLE UP RELIEF PACKAGES FOR THE BRAZILIAN ECONOMY IN THE 80’S .SO IN WAY THEY HAVE COMPLETED A FULL CIRCLE .ANOTHER PROBLEM FOR BRAZIL IS FOR ITS DOMESTIC ENTERPRISES TO COMPETE WITH CHINESE IMPORTS OF WHICH LCS SCREENS ,TELEVISIONS AND TELEPHONES MAKE UP 98% OF THE IMPORTS .THERE HAVE BEEN NUMEROUS ANTI DUMPING CASES FILED IN BRAZIL MANY OF WHICH ARE AGAINST CHINA . CLEARLY BRAZIL HAS TO TAKE MEASURES OR RISK BEING TRAMPLED BY THE EVER IMPRESSIVE CHINESE MANUFACTURING BEHEMOTH. DESPITE OF THESE POSSIBLE HURDLES DOWN THE ROAD CLEARLY THIS IS BOOM TIME IN BRAZIL ,PEOPLE HAVEN’T LIVED BETTER IN A LONG TIME AND EXPEXTATIONS ABOUT THE FUTURE ARE HIGH , IT’S GREAT TO SEE THE LAND OF SAMBA AND SOCCER ROCKING AGAIN.
