Continued growth of trade between China and the Portuguese-speaking countries drives diversification
A new record was set in 2014 for trade between China and the Portuguese-speaking countries, but the focus remains on raw materials, the price of which is dropping on the international market leading to growth in trade slowing.
With a total of around US$133 billion in trade in 2014, according to figures released this month by the Chinese Customs Service, which was less than 1 percent growth on 2013, the target set at the end of 2013 now seems more distant.
The Plan of Action for Economic and Trade Cooperation (2014-2016), approved during the 3rd ministerial meeting of the Forum for Economic and Trade Cooperation between China and the Portuguese-speaking Countries, outlined “all the necessary and favourable measures,” to achieve, by 2016, a target of US$160 billion in trade between the group of countries.
The most recent report from the Brazil-China Council is indicative of the difficulties of the current climate, and explains that the drop in Brazilian exports to China is due to “a downward trend in international prices of the main commodities.”
Exports of soy – beans, meal and oil – and of iron ore, which account for over two thirds of Brazilian exports to China, increased in quantity but saw a sharp fall in value.
“The pattern of Brazilian exports to the Asian country remained the same ‘overall’ to previous years, as sales to China focused on shipments of soy, iron ore and oil, which, together, accounted for 79.8 percent of sales,” the report said.
Despite a drop in total Chinese exports (3.49 percent) and imports (3.15%), Brazil remained, by far, China’s biggest trading partner amongst Portuguese-speaking countries, with two-way trade of over US$89 billion.
In Angola’s case exports of commodities also fell back, by 2.67 percent, due to a drop in the price of oil, which made up most of China’s purchases from the country, and Chinese exports rose by over 50 percent.
In this case short-term projections are also not favourable, and the Economist Intelligence Unit this month significantly lowered its forecast of the average price per barrel of Brent oil in 2015, to US$54.
The figures from China’s Customs service showed that in 2014 the best performance amongst the three major markets in the “8+1” area was with the country for which commodities are of least significance for trade, Portugal: growth of 25 percent in Chinese exports and 19 percent in imports.
Between 2002, when trade totalled US$5.6 billion, and 203, China’s trade with the Portuguese-speaking countries rose by an annual average of 37 percent.
The need to expand the trade base was already a consideration at the 3rd ministerial meeting of the Forum for Economic and Trade Cooperation between China and the Portuguese-speaking Countries, with the launch of the Centre for Trade Services for Small and Medium Sized Enterprises in China and the Portuguese-speaking Countries (PLP), the Centre for Distribution of Food Products of the PLP and the Convention and exposition Centre for Economic and Trade Cooperation between China and the PLP.
The ministerial meeting also launched the Fund for Development Cooperation between China and the Portuguese-speaking Countries, a joint initiative of the China Development Bank and the Macau Industrial and Commercial Development Fund (FDIC), with initial funding of US$125 million.