Latin America's economy is facing the most severe situation since the global economic crisis because of reasons as below: slow growth of world economy, falling commodity prices, & international trade depression. “Economic difficulties+ respective problems” lead to political storm. What is worse, for some time to come, economic recovery lacks adequate power, it is estimated that there is limited economic growth in 2016 in this region.
In such circumstances, the number of Chinese domestic air conditioning exporting to Latin America also presents downward trend. According to customs statistics ,up to April 2016 cold year, the number of Chinese domestic air-conditioning exporting to Latin America is 483 million units, down 32%, it is mainly exported to Brazil, Mexico, Argentina and Colombia and other countries .( picture 1 for reference)
picture 1: 2013-2016 major importing countries distribution in Latin America Brazil & Mexico rainbow night
It is easily seen from the above drawing that, market share reversal occurred between previous ranked first Brazil and ranked second Mexico. At the present, Mexico ranked first in Latin America uncharacteristically. China's household air conditioner exporting to Mexico's market share rose from 15% to 26%, while Brazil's market share fell from 35% to 24%.BY the export data of Brazil and Mexico, you can find that by the end of April 2016 cold year, China's household air conditioner exports 115 million units to Brazil, an decline of 56%; while total 127 million units to Mexico, an increase of 25%, uncharacteristically becomes one of Latin America dark horse
Sheet 1: 2015-2016 China's household air conditioner exporting data comparative analysis of Latin American Data origin: China Customs
Political unrest & economic recession happen in Brazil, while Mexico Strive to develop
As the largest economy entity in Latin America, Brazil was the economic growth pioneer in the region, however it’s lost in the worst recession since 1930s because of a series of political turmoil & economic decline, While due to close to the United States, Mexico economy is closely related to the US economy, it depends on America trade to some extent, thus when the US economy performs better, so does Mexico. In addition, promoting structural reforms in Mexico itself is also an important contribution for development.
Brazil's exchange rate hits a record high, but lower inflation in Mexico
A series of failed economic policies have led to high inflation in Brazil, including government’s unsuccessful regulation for prices of items, electricity, natural gas and currency devaluation.
Despite influenced by various unfavorable factors of international economic environment, Mexico behaves different from other emerging economies. Mexico gains significant effort by structural innovation, economy keeps growing and control inflation at a low level.
Unemployment rate refresh a new record in Brazil, while Mexico exactly the opposite
According to IBGE data released, from February to April 2016, Brazil's unemployment rate rose to 11.2%, which is the highest level since 2012.Brazil's unemployment rate has been rising for 17 consecutive months, which shows extremely serious situation. The unemployment mainly from the construction, manufacturing and retail, of which construction jobs fell as much as 5.1% .However, According to data published by Mexico's National Bureau of Statistics, March unemployment rate in Mexico was 3.7%, of which became the lowest since June 2008 and less than 3.9% of the previous experts forecast. And the unemployment rate fell mainly due to formal employment increase and increased domestic demand.
But in the long term, despite the current grim situation in Brazil, it still has a huge market potential, it is expected to recover in the third quarter of this year, Brazil will have an increasing demand.