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The recent Chinese credit expansion, much larger and implemented earlier than the current Brazilian one, has already run into an increase in nonperforming loans (NPLs).

Ironically, while this developmentalist romanticism still holds sway in Brasilia, in Beijing China’s traditional dirigiste policies are falling out of favor as reformers call for a move away from state intervention to greater reliance on market forces.

Brazil’s reform efforts over the late 30 years included a partial opening of the economy, privatizing inefficiently run state-owned enterprises (SOEs), adjusting fiscal accounts, and adopting a monetary regime that explicitly works to keep inflation at acceptable levels--undoing part of the developmentalist model of the 1960s and 1970s.

The Chinese have ratcheted up their stake in local Brazilian industry while Brazilian companies struggle to gain entry into the Chinese market.

Within generally well managed macroeconomic frameworks, both China and Brazil have implemented similarly inconsistent macroeconomic policies in part in response to economic challenges and the global economic downturn. China’s developmentalist, state-centric model of economic growth first captivated and became a model for Luiz Inácio Lula da Silva’s administration (2003–2010) as they continue to for the current President Dilma Rousseff.

But their new ties are also leading to increased wariness by the Brazilians.

The real challenge comes in the areas of trade and investment.

Even if long-term economic trends diverge, though, Brazil and China’s macroeconomic policy responses to the economic downturn four years ago have followed remarkably convergent paths.