The 2015 Chinese meltdown caused considerable damage to the economies of countries around the world. Even the U.S. Federal Reserve postponed an interest rate hike because of the China situation. But the country that probably suffered the most from the Chinese attempt to move from a manufacturing based to a consumer based economy is Brazil.
Economists called the relationship between Brazil and China “Chinzila” because China was importing huge amounts of iron ore, oil and other natural resources from the largest economy in Latin America. When China pulled back from that relationship and commodity prices dropped, Brazil was left with a major hole in their economic machine. Brazil’s economy went from bad to worse.
China didn’t stop importing products from Brazil, however. They just cut the amount of goods they needed, and that was enough to put another nail in the financial coffin that Brazil created for itself. China recently signed an Agreement with Brazil that promised more interaction between the two nations, but that news didn’t help the struggling middle-class in Brazil.
BMG Bank President Ricardo Guimarães is up to speed on the Chinzila situation, and he recently told R7.com that Chinese President Xi Jinping believes a yearly gross domestic product growth of 6.5 percent would be enough to keep China commitments to Brazil intact. Guimarães thinks a yearly 6.5 percent growth factor over the next five years is an overstatement. China is still putting all the pieces of their consumer-based economy together, and their GDP will be less than 6.5 percent because the Chinese are still making adjustments to their currency, according to Guimarães.
Mr. Guimarães is up-to-date on the China situation as well as the Brazilian and economic debacle. His family-owned bank is one of the banks in Brazil that is still doing better than expected during the economic crisis thanks to football club sponsorships. BMG Bank sponsors Brazilian soccer teams, so the bright orange BMG logo is worn by clubs around the country, and that has been made BMG Bank very visible. BMG Bank and football have a mutually rewarding relationship, and the people of Brazil support it by applying for payroll loans from BMG Bank, according to another R7.com article.
Ricardo Guimarães loves sports, banking, and world affairs, according to another article. He was recently awarded the Diploma of Merit by the city council of his hometown, Belo Horizonte. BMG Bank has served the city of Belo Horizonte for decades, but when Ricardo became president of the bank he began to market bank products through football sponsorships, and one of the teams sponsored was his hometown team. He was president of that club for five years, according to an article posted by CMBH.mg.gov.br. Belo Horizonte is just one of many awards that Ricardo has been honored with over the last 16 years.
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