University of São Paulo: China’s economic crisis is expected to impact the Brazilian economy in 2022

Despite the covid-19 pandemic, global trade grew by approximately US$ 28 trillion in the year 2021, according to a report from the United Nations (UN) Conference on Trade and Development, released last November. The value is 23% higher than that recorded in 2020, and 11% above the 2019 numbers before the covid-19 pandemic. Even with this positive result from last year, according to the UN, the scenario for 2022 remains quite uncertain.

For professor Paulo Feldmann, from the Faculty of Economics, Administration and Accounting (FEA) at USP, this increase means a resumption of the pace of the world economy, with significant growth in countries such as China, the United States and also in Europe. “There has been an increase in exports and imports and an improvement in world trade, and this 11% growth compared to 2019 is due to world trade having a relatively weak year in the year before the pandemic.”

Brazil also did well in world trade in 2021, with growth in both imports and exports. “A very important growth, above 33%, which is very good.” Feldmann says that this growth is mainly related to exports. “Brazil continues to be a major exporter of commodities, such as agricultural products, soy, corn, meat and mineral products, iron ore and oil, for example”, highlights the professor.

Even though Brazil is one of the largest economies in the world, it has less than 1% of the share of international trade. According to Feldmann, this is because the country is not a major exporter of industrialized products. In addition to having very low productivity, says the professor, infrastructure problems, such as cargo transport being essentially by road, and the high tax burden, increase production costs and undermine Brazil’s competitiveness in world trade, especially in relation to industrialized products.

The professor agrees with the UN report on uncertainties for 2022. One of the reasons is the economic difficulties faced by China, including the bankruptcy of some companies in that country. “This should be reflected here, since China is the main buyer in the country, responsible for 25% to 35% of exports made by Brazil”, he concludes.

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