Brazil needs its own version of China Dream, expert says

Updated: 2014-10-20 04:44

By JACK FREIFELDER in New York(China Daily Latin America)

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Brazil's emergence as one of the leading Latin American economies has taken place in tandem with rapid growth in China over the last decade, a sign of the growing link between the two emerging markets.

A professor at Cornell University, who specializes in the Latin American region, said Brazil and China still have a good deal that can be leveraged from their growing relationship.

"It's an exchange of knowledge right now, not only giving to China but Brazil is also learning from what is happening there with the transformations in that market," Lourdes Casanova, lecturer at Cornell's Samuel Curtis Johnson Graduate School of Management, said in an interview with China Daily. "In terms of nominal GDP (gross domestic product), Brazil is the second-biggest emerging market after China, and it's the 7th biggest economy in the world."

"Right now the trade between [the two] has increased and the Chinese are investing more in Brazil," she said. "But both economies are very complementary, Brazil has iron ore, agricultural power, etc, and the Chinese need the food and commodities that Brazil has."

Trade between China and Latin America has flourished over the past decade, hitting $261.2 billion in 2012 — up from $100 billion in 2009 and just $10 billion in 2000, according to data from JP Morgan Chase. Flows between the two are projected to hit $400 billion by 2017.

China's trade with Latin America has been on the rise in recent years. And China is now Brazil's largest overseas trading partner, with trade volume between the two countries exceeding $80 billion in 2013, according to Brazilian and Chinese government data.

On Oct 7, the World Bank released its October 2014 semiannual outlook report on Latin America and the Caribbean, which forecasts a growth rate of 1.2 percent in the fourth quarter of 2014 and a 2.2 percent clip for 2015.

The World Bank estimate for Brazil's final growth rate in 2014 has been pegged at 0.5 percent, while growth in China will slow to 7.4 percent. And growth in the world's second-largest economy is expected to dip even further in 2015, to 7.2 percent.

Although both Brazil and China are facing economic deceleration heading into 2015, Casanova, an international business expert who has written extensively on Brazil, said there is reason for a positive outlook.

"On the China side, 10 percent growth was very difficult to maintain," she said. "Of course, big economies are more difficult to move but the Chinese economy is still quite dynamic. Growth of 7 percent or 8 percent is still very healthy and it's good news for Latin America," she said.

In her June 2014 book, The Political Economy of an Emerging Global Power: In Search of the Brazil Dream, which Casanova co-wrote with Julian Kassum, the authors question whether Brazil's rise on the global stage is still taking shape or if the country's growth has already hit a lull.

On Oct 15, Casanova joined fellow Cornell scholar Humberto Ribeiro at the Americas Society in New York for a dialogue on her book and the state of the Brazilian economy.

"In Brazil right now we are seeing that many of the citizens want change," Casanova said. "We'll see with the results of the presidential election, but they want change in politics and society. People want better health, better services, better public transportation and a better life."

"Brazil still has a long way to go but it's a tremendously rich country and it's not going anywhere," she said. "But Brazilians need to get their act together to see how we both can benefit from China's tremendous rise."

Casanova also said one of the things she found troubling in her research leading up to the publication of her book was that she could not find anyone talking about a "Brazil dream", a concept of national rejuvenation that has seen its Chinese counterpart championed by Chinese President Xi Jinping for more than a year.

"The ‘Chinese dream' is to say, Chinese citizens aspire to something bigger than themselves: to fight for a better world, a better China and a better future for their children," Casanova said. "As of now, we see the Brazil dream as a combination of things: the inspirational attitude of the American dream, aspects of the welfare state from the European dream, and of course, a bit of the China dream."

"We are in a moment in the world in which all countries, including the United States, are adjusting their own economic model," she said. "So the new Brazilian government and the new president will have to rebuild a consensus and the hopes of what this dream represents for young people and for all Brazilians."