China Goes Platinum for Brazil: StanChart

China is gaining ground as a trade partner for Brazil, says Standard Chartered, adding that in March and April it surpassed the US as the leading export destination for the first time. Typically, China has been behind the US and Argentina as the most important consumer. “Looking at Brazil’s recent trade data, one could say that China is now a platinum account,” says Standard’s Americas chief economist Douglas Smith. In April alone, Brazil exported $2.23bn worth of goods to China while the US came second with $1.34bn in exports. Brazil typically sends primary products like soy and iron ore, but Smith also notes a surge in total trade – exports plus imports – between China-Brazil, at $36bn last year, versus $600m in 1990. And Smith notes that Brazil does far more trade with China than with India or South Korea. “In conjunction with the growing trade relationship, it is natural that there is a growing investment and political relationship between the two countries,” says Smith. He adds that Lula will visit China again later in May, and that both nations are increasingly vocal regarding the need for IMF reform. “There is always the question of the role of the USD – in the recent past, Lula has suggested that China and Brazil’s trade could be transacted in local currencies,” says Smith. In the future other products such as ethanol and oil could also make the list of main exports, especially after Brazil is able to extract oil from newly discovered reserves in pre-salt basins, he adds.