China's machinery and equipment exports to Brazil increased in both species and quantity

Brazil’s “Economic Value News” reported on July 5th, 2011: From January to May 2009, China’s exports to Brazil were higher than the 19 cubic meters of excavators, which reached US$ 253,100. In the same period of 2010, exports increased to US$ 7.4 million. In the first five months of 2011, it reached $22.9 million.

According to the Ministry of Development, Industry, and Foreign Trade of Brazil, the excavator is the sixth most imported capital goods imported from Brazil. China has become the fourth largest supplier after South Korea, Japan and the United States. The Chinese excavator exports to Brazil. The frequency of growth is much faster than other countries. In 2009, Belgium and the United Kingdom exported more excavators to Brazil than China. From January to May 2011, China exported more excavators to Brazil than Belgium and the United Kingdom. Export of excavators has become a model for Chinese capital goods exports to Brazil.

According to the statistics of the Brazilian Machinery and Equipment Association, China’s share of Brazilian machinery and equipment imports in 2005 was 3.5%. Accumulated data for January-April 2011 show that China’s share has risen to 13.2%, almost the same as Germany’s current share, while Germany’s share has fallen from 17.8% to 13.7%. Although the U.S. exports to Brazil’s machinery and equipment are still at the top of the list, its share has fallen from 31.6% to the current 25.2%.

According to the classification of capital goods by the Ministry of Development, Industry, and Foreign Trade of Brazil, the share of capital goods exported to Brazil by the United States, Germany, and China shows a shift. This evolution shows the differences in the export strategy of the three countries' machinery and equipment. According to the above classification, Germany’s capital goods exports to Brazil from January to May 2009 were approximately US$1.1 billion and reached US$1.5 billion in the same period of 2011. China’s export of capital goods to Brazil from January to May 2009 was equal to that of Germany, which jumped to 2.5 billion U.S. dollars in the same period of 2011, which is close to the U.S. export value of 2.8 billion U.S. dollars to Brazil.

The statistics of the Brazil Machinery and Equipment Association show the differences in exports of machinery and equipment from Brazil to Germany, the United States and China. In the past, China exported more machines used in the consumer goods industry, and now the export growth of machinery and equipment used in manufacturing and basic industries has accelerated. This situation has begun to make the United States and Germany uneasy. The United States still maintains its leading position in the export of machinery and equipment from Brazil. The amount of Brazil’s imports of infrastructure, basic industries and road machinery imported from the United States reached US$1.1 billion, accounting for one third of US$2.9 billion of US machinery and equipment exports to Brazil.

The United States maintains a focused principle on the export of machinery and equipment to Brazil. Many of its heavy machinery and equipment exported to Brazil are subsidiaries of American companies. Therefore, its export to Brazil is determined by its American parent company, which selects and agrees that its US global suppliers supply its subsidiaries around the world. The U.S.-to-Brazil exports of logistics equipment and manufacturing equipment and equipment used in basic industries are still far ahead of China. Relative differences are reflected in the declining share of U.S. exports.

Different from the United States, Germany and China adopted a strategy to diversify the export of machinery and equipment products. As a traditional supplier to the international capital goods market, Germany’s share of its export supply has been declining as China’s chance to seize Brazil’s demand has rapidly increased its exports to Brazil.

China has made remarkable progress in the export of machinery and equipment, especially in handling equipment, civil construction equipment and agricultural machinery. In those devices, Europe lost to China, especially in terms of prices.

From January to May 2010, Brazil imported USD 134.9 million worth of logistics and civil construction machinery and equipment from Germany, which increased to USD 182.4 million in the same period of 2011, an increase of 35.2%; during the same period, China’s exports to Brazil increased from USD 136 million to 273.6 million. The dollar, an increase of 101.16%.

Today, in addition to supplying machinery and equipment to the Brazilian manufacturing sector, China also exports heavy equipment to Brazil for steel mills, cement plants and thermal power plants. China enters the Brazilian market and many times is subcontracted by European general contractors. The identity penetrated little by little and was employed by the general contractor to organize and equip the entire factory. As the supply of complex components continues to increase, the quantity and quality of China's export supply are increasing. Chinese companies have begun to play the role of general contractor. Using European or American companies as subcontractors, the roles of Chinese and European and American companies are changing.