Competitiveness or complementarity: Analysis of agricultural trade between China and Brazil

Abstract

The competitiveness and complementarity of trade reflect the advantages and disadvantages of exports and future trade trends. After China joined the WTO, the import and export volume of agricultural products has increased significantly, but the import volume and import growth rate have greatly exceeded the export volume and export growth rate. China is the world's largest importer of agricultural products, and Brazil has become the world's largest exporter of agricultural products. As a country with the largest increase in agricultural exports, China and Brazil have close agricultural trade exchanges. China has become Brazil's largest importer of agricultural products for four consecutive years. In addition, both China and Brazil are BRIC countries; therefore, the establishment of a cooperation mechanism is more conducive to the development of agricultural trade. This study uses quantitative research methods to investigate the agricultural trade between China and Brazil by calculating the revealed comparative advantage index, trade complementarity index, and trade intensity index. The study found that due to the different endowments of agricultural resources and the significant differences in agricultural structure, China and Brazil's agricultural trade competitiveness is weak and they are highly complementary. The main agricultural products exported by China are labor-intensive processed products (pulp and waste paper, textile fibers, vegetables and fruits), and the main agricultural products exported by Brazil are land-intensive products (oilseeds and oily fruits, vegetable oils, raw hides and furs). Complementary advantages in agricultural trade were analyzed. In the future, the two countries have huge potential for cooperation and development.