"As two influential emerging powers in the world, China and Brazil should further strengthen cooperation", as Vice-president Xi Jinping put it. "Bilateral cooperation should go beyond the bilateral field and is of global and strategic significance," Xi told Brazilian President Luiz Inacio Lula da Silva during a visit to the South American nation in February. Meanwhile, Brazil regards the strengthened ties with China as an important part of its pursuit of closer cooperation among developing countries.

Strong economic complementarity between the two countries has bolstered the booming bilateral economic and trade cooperation.

What China imports from Brazil are mainly some resource products, ranging from iron ore to soybean, which cannot be provided by other markets. While China remains the largest buyer of Brazil's CVRD, the world's largest iron ore manufacturer and supplier, CVRD's sales to China account for 43.6 percent of its total sales volume. In the first quarter, Brazil's export of iron ore to China reached US$1.9 billion, up 89.8 percent from a year earlier. In the context of the world prices of soybean suffering a drastic decline, China's increased soybean import from Brazil, which stood at US$560 million in the first quarter - or a 104.7 percent growth year on year - has contributed a lot to the agricultural sector's development in this country.

Despite a high degree of economic complementarity they have enjoyed, the high concentration on a few products in Sino-Brazilian trade will also leave some uncertainties to bilateral economic and trade ties. In Brazil's export to China, mineral products account for 56.1 percent, followed by soybean-dominant agricultural products making up about 16.5 percent. What Brazil imports from China mainly center on mechanical and electrical appliances, chemical products, textiles and their raw materials, which accounted for US$2.38 billion in the first quarter, or 65.7 percent of its import from the Asian nation. Such an unbalanced trade structure is likely to give rise to some trade friction and will have a negative effect on bilateral economic and trade ties. Hence, it remains necessary for the two countries to expand areas of bilateral investment and trade to boost the scale of bilateral trade.

Compared to the growing clout the two countries enjoy in their respective regions, the current scale of trade between China and Brazil remains trivial. In China's foreign trade, Brazil's share is only 1.8 percent.

China and Brazil should try to expand the scope of bilateral cooperation to areas such as reconstruction of the global financial system. The potential for bilateral cooperation should be 10 times that of the trade volume, as Brazilian president has put it.

(China Daily May 20, 2009)