China has unexpectedly increased its purchase of Brazilian crude oil in the first nine months of this year. According to official reports, Brazil's oil exports to China have reached a record $21.8 billion, reflecting a 49% increase compared to last year.
Growth of Bilateral Trade
In total, bilateral trade between Brazil and China reached $143 billion during this period, marking a 12% increase from last year. Brazil's exports to China amounted to $84.7 billion, while imports from China were $58.6 billion. This increase in trade resulted in a trade surplus of $26.1 billion for Brazil.
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The Role of Oil in Economic Growth
Oil is recognized as one of the main factors of this economic growth, currently accounting for about 26% of Brazil's total exports to China. Meanwhile, China's share of Brazil's total oil exports has reached about 50%, which is nearly seven times that of India, the second-largest buyer of Brazilian oil.
At the same time, despite fluctuations in the global market, China's customs data shows that China has actively purchased Brazilian oil, even as total crude oil imports in China decreased by 32% in the second quarter of 2023. This strategic shift has led to a 29% increase in Brazil's total oil exports to $43 billion.
Changes in Other Markets
In contrast, Brazil's beef market has faced an 8.5% decline, with exports of this product reaching $5.5 billion. This decrease is due to Brazil's annual limit of 1.1 million tons in the Chinese market. Additionally, China has become the fifth-largest buyer of Brazilian beef, accounting for only 5.6% of total consumption.
On the other hand, Brazil has seen significant growth in the purchase of electric vehicles from China. Purchases of hybrid and electric vehicles have increased by 89% and 341%, respectively. BYD, China's largest automaker in Brazil, has also responded to the increased demand by shipping large batches and assembling electric vehicles at its factory in Bahia state.
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