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Chinese Growth Pace May Be Lower, But Demand for Agricultural Commodities Will Follow Strong

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Brazilian government should hurry to establish agreements with China before the US

On March 8th morning, some headlines saw a decline in China’s exports, pointing to some rumors that a recession could occur in the country.

Roberto Dumas Damas, an economist, and professor at Insper, who has been following the Chinese situation for some time, estimates that the Asian country is actually in a process to reduce the growth.

Until 2008, China grew via net exports. After the crisis that year, the United States stopped buying the entire Chinese expedient. As such, new markets were sought.

Subsequently, there was a second engine, which was the investment and soon after, a third engine, which was the increase in consumption, increasing the salary of the workers.

Damas explains that the Gross Domestic Product (GDP), therefore, is not withdrawn  it is only growing less, which is desirable for public policy.

However, the increase in the purchasing power of Chinese households points to a growth in domestic consumption. Agricultural commodities would be on the path of sustainable consumption. Reducing consumption of steel, coal and other metals could be offset by increased consumption of food, leather, meat, and poultry.

This could be a good chance for Brazilian exports, regardless of how the trade war between China and the United States evolves.