How Brazil’s China-Driven Commodities Boom Went Bust

JOHN LYONS, THE WALL STREET JOURNAL, 8/28/2015 

Not long ago, Brazil stood as the leading example of how a developing nation could rise toward global prominence on the force of a China-driven commodity boom.

As its economy surged, Brazil stormed the world stage—hosting a World Cup, demanding more say at the United Nations and blocking a U.S. free-trade plan for the Americas.

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Rich in iron ore, soybeans and beef, not to mention oil, Brazil was positioned as a supplier of many things China needed. Above, a floating oil platform can be seen in Guanabara Bay in Niterói, Brazil. PHOTO: LEO CORREA/ASSOCIATED PRESS

Now Brazil is looking like a symbol of something else: resource-rich nations’ habit of ending their booms with spectacular busts.

Brazil’s stock market is down 22% in the past year. Its currency has lost a third of its value against the dollar. And on Friday, Brazil is expected to report that in the second quarter, its economy shrank at a pace of about 1.7%. Economists are voicing fears of prolonged stagnation.

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