|
So as to reach Arab consumers, most of the Brazilian companies face a challenge: competition with China. The Chinese discovered the Arab buying power and started shipping their products there a long time ago.
With the United Arab Emirates alone, China had foreign trade of US$ 8 billion last year, a value similar to the bilateral trade between Brazil and the 22 countries in the League of Arab States.
The countries of the Gulf Cooperation Council (GCC), Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the Emirates, absorb 2% of Chinese exports, according to news agency Ameinfo.
The textile, shoe, electronic product, construction material, furniture and auto parts sectors are some of those in which Chinese products are present in the Arab world, according to the secretary general of the Arab Brazilian Chamber of Commerce, Michel Alaby.
"In sectors in which there is no need for high technology, in which production is large scale and needs great volumes of labour, they lead," stated Gerson Schmitt, brand and sale channel director at Dilly, which makes the Try On sports shoes and tennis shoes for famous brands like Nike, Puma and Fila in Brazil.
Dilly produces around 7.5 million shoes a year and exports Try On products to the Middle East.
The shoe sector is one of those that face Chinese competition in the Arab market. According to Schmitt, Chinese shoes reach the Arab market costing between 10% and 30% less than similar Brazilian products.
China has extremely low cost and labour and an aggressive export policy.
"They are pro-active in foreign trade," stated Fahd Koja, the general manager at Giro Group, an export company that works only with the Arab market.
The Chinese are also closer to the Middle East. "They have lower freight costs due to geography," recalled Koja.
Factories from China, however, usually work only with large-scale production. "They are not so good in smaller loads," stated the director at Dilly.
According to the executive, this is one area in which the company usually has an advantage in selling to the Arab market. Smaller orders represent lower risk to importers as, if the product is not well accepted for some reason or has a problem, replacement is easier and more agile. There are also high stock costs.
China is also renowned for its low quality. Among Brazilian businessmen the opinion is unanimous: the largest advantage Brazil has over China is the quality and creativity.
"Brazil may escape competition with Chinese products due to quality, different design and brands," stated Michel Alaby.
The general manager of Giro Group agrees. "It is necessary to make the product different. What may be different, for example, is the package, which may have different presentation," stated Koja.
The brand and channel director at Dilly believes that creativity is a characteristic that has opened space for the company on the Arab market.
"We compete due to our innovation capacity," stated Gerson Schmitt. Brand Try On is specialized in adventure. The shoes are inspired on the characteristics of Brazilian nature.
Furniture in China
One of the sectors in which China grows most on the Arab market is furniture. "There has been great evolution in the furniture sector in China. We noticed that during foreign fairs. The Chinese were not so present five years ago," stated the president of the Brazilian Furniture Industry Association (Abimóvel), Domingos Sávio Rigoni.
The main competition, in the sector, is in the area of solid wooden furniture, where there is greater need for labour.
"But they are in all sectors," stated the president of the Abimóvel. According to Rigoni, in the areas that that require more automated production there is also competition, but at a lower level.
The president of the Abimóvel stated that, also in the furniture sector, design is the factor that has given Brazil an edge over the Chinese on the foreign market.
The Chinese expansion on the Arab world may be noticed in the local press. Every day the Arab press publishes articles about joint ventures with companies in the Asian country and the increase of Chinese exports.
In the month of October, for example, Chinese construction company Cino Hydro signed a memorandum of intentions to build a cement factory in Damascus, Syria.
China has business in various sectors in the Arab world, but one of its main interests is oil.
"China is worried about guaranteeing energy sources," stated the secretary general of Arab Brazilian Chamber. Various Arab countries have partnerships with China in the oil sector.
Chinese companies like China Petrochemical Corporation (Sinopec) and China National Petroleum Corporation, for example, are installed in Egypt. Last year, incidentally, Sinopec won a tender for gas exploration in Saudi Arabia.
The largest Chinese trade partner in the Arab world is Saudi Arabia, followed by the Emirates. In the United Arab Emirates there are 500 Chinese companies installed, according to Ameinfo.
In the month of September this year, the Arab countries signed, through the League of Arab States, an agreement to further increase cooperation and the trade dialogue with China. This article appeared originally in Anba – www.anba.com.br.
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.
So why are you afraid of Chinese textile exports into Brazil ?
Have you not clearly said they are of lower quality and they have a geographical advantage for shipping in the arabs countries.
As you have a higher quality, no geographical disavantage for brazilian textile produced in Brazil, you should not threathen Chinese textile imports in your country as you do.
Quite contradictory your arguments...as usual.
You want to export more agriculture but not open your doors in a similar reciprocity for financial services and manfuctred goods.
The exact same problem appears in WTO negotiations.
You want it all, and give nothing !
Looks like that TRADE is only one way and that RECIPROCITY is not even in your language, or dictionary.
You are already highly profitable in your trade balances with almost all developed and developing nations but that is not enough and you want more.
For someone who want FAIR and FREE trade you are just the opposite.