60% of all new imported machinery sold in Brazil now comes from China. 40% of all machines sold in Brazil are imported.

In 1984 Brazil´s machine industry thanks to import limitations by sometimes exuberant taxes experienced some development and over 650.000 workers had their workplaces secured for quite some time.

In 2009 only 127.000 are employed by Brazilian machine manufacturers. Some new projects, mainly in the steel industry, have imported 95% of the machines from the Far East. Cheaper and many times faster.

The Lula government is not specially worried about the issue. The agrobusiness, construction and the basic materials industry are the gems in the crown. The automobile manufacturing as well. But longtime successful equipment producers are seeing their time coming to an end, most are rapidly changing to become simple representatives for Chinese, Korean and Indian companies.

Recently I observed a new catalogue from an important tools distributor here in São Paulo. Not one single item was manufactured in Brazil. Welding machines, wrenches, electrodes, small forklifts, hammers and saws were all Chinese. Some with faked scurrilous German names on it.

Earth moving equipment apparently is suffering from the same problem. Many machines we see doing the paving, the scraping and the lifting have oriental names printed on their sides. But not one is manufactured here. One giant American manufacturer, which has a huge complex here in Piracicaba close to São Paulo, seems to be a lone survivor, but their brand name is now not so often seen on new equipment.

The strong Brazilian currency, the weak US dollar, the extremely cheap labor forces in the Far East countries, the let us name it absolutely crazy Brazilian work related laws are the reasons for the less and less productive or innovative machine building industry.

Mechanical engineers are not even mentioned in the prestigious magazine published by the Brazilian Engineering Institute, all relates to the construction business and civil engineering. In the past strong companies building sophisticated tool machinery have now become autoparts foundries. Many have closed, some just glue their name-stickers on Chinese machinery and resell it. A few European, Japanese and American manufacturers are trying to sell their equipment here too, but are not competitive at all. Some try via Europe to resell machines bought in China, but this desperate rerouting does not help.

But with 200 billion dollars cash reserves, a relatively small trade deficit and selling billions in soybeans, sugar, iron ore, lumber, meat and chicken to hungry and developing mostly Asian countries, well, there is no official or government people interested in promoting the manufacturing of machines down here. The total turnover regarding Brazilian machine manufacturing is equal to Brazilian banks output.

Profit output… that is the difference. And after taxes.