There has been a lively debate in Brazil in recent years, involving sectors of business, the labor movement, and academics, over deindustrialization and the future of the manufacturing sector. This is often linked to the growing relation between Brazil and China, which is now the country’s most significant trade partner. Brazil has experienced relative deindustrialization in the sense of a declining share of the manufacturing sector in gross domestic product that is mainly attributable to the changes in the country’s trade balance in manufactures. The direct and indirect impacts of China on Brazilian manufacturing have contributed to this relative deindustrialization.