Lithium Powering pan-Asian Interest in Latam

Up Front

This article is available in Chinese: 锂看上去对横跨亚洲的公司有益.

You know when China, Japan, South Korea, and Elon Musk are chasing the same dream, it has to be big.

Over 50% of the world’s lithium is in the so-called "Lithium Triangle" of Argentina, Bolivia, and Chile. As the Economist pointed out last year, each country is taking a very different approach to the development of the resource.

Argentina, making up for lost time under more protectionist governments, is working to overcome other hinderances. Provinces, not the central government, control minerals (per Article 124 of the Constitution), although the Macri administration last year negotiated an agreement with provinces putting a 3% ceiling on royalties. Lithium from northwest Argentina is exported over the Andes via Chile. As a result, the Argentine lithium market is surging, with local players such as Lithium Americas selling a 19.9% stake last January to China’s Ganfeng Lithium, in which Ganfeng will take 70% of production from the Cauchari-Olaroz brine deposit joint-venture with Chile’s Sociedad Química y Minera de Chile (SQM).

Bolivia is the sleeping giant of the triumvirate, with reserves as big as Argentina’s, but production a lot lower. A 2010 law establishing state control of lithium brine extraction. As a result, Bolivia has moved slowly in lithium's “white gold” rush. The country made it’s first shipment of lithium to China in August of 2016 — a whopping 25 tons. Last month Evo Morales said he wants Bolivia to be the 'Saudi Arabia of lithium' and "set the price for all the world.” But with the Chinese pushing "more coordination” between the two countries — and underwriting the budding Bolivian Space Agency —  Bolivia runs the risk of being the next Ecuador, with China controlling the production of a vital resource, all in the name of “national sovereignty."

Chile ostensibly is the leader of the pack with the most developed infrastructure around the resource, but it actually has the smallest reserves of the three. The two current extractors, SQM and Albemarle are both publicly listed and recently had their licenses extended beyond the next decade. China’s Tianqi Lithium bought 2% of SQM in 2016, and rumors have swirled about different suitors looking for another stake — from Long Island's Renaissance Technologies to China's Ningbo Shanshan and Sinochem (although Sinochem turned around in 24 hours and denied pursuing a $4b stake) to others (every discussion of lithium has to have the obligatory Elon Musk and Tesla reference, and Chile has that, too). True to form, Chile's market-friendly approach is positioning the country to move up the value chain. Chinese auto companies such as BYD have talked to Chilean lithium producers about potential deals to secure supplies of the key battery material. And BAIC Group has even pursued building an assembly plant in Chile so as to take advantage of the lithium.

While the Chinese have expressed interest, like they do for all raw materials, when you’re talking about lithium in Latam, you’re not just talking about China. There are very few spaces where other Asian countries can compete with China in Latin America. But in lithium they do.

In Argentina, Sales de Jujuy is a joint venture between Australia's Orocobre Limited, Japanese trading company Toyota Tsusho Corporation (TTC) and JEMSE (the Mining Company of the Argentina provincial government of Jujuy).  And last year BCP Innovation, a subsidiary of Thailand’s Bangchak Petroleum took a 16.4% stake in Lithium Americas, who had also been long-courted by Korea’s POSCO.

In Chile, the ongoing speculation in who will take a stake in SQM circles around not just Chinese names, but also the likes of Australia’s Rio Tinto, who worked with Canada’s Wealth Minerals and Chinese private equity firm GSR Capital to look at stake in SQM.

And the biggest lithium project of them all, Chile’s Development of Added Value Projects of Lithium request for proposals (RFP), shows how other Asia firms are competing with Chinese companies. Through an agreement with Albemarle, the winner of the RFP will get guaranteed the lowest price for long-term contracts for an initial 6700 tons scaling up to 16,000 tons through 2044. Needless to say, this piqued the interest of a lot of producers. Of the seven that made the short list, China's Fulin Group, Jiangmen KanHoo Industry, and Gansu DET will be competing with South Korea's Samsung SDI — to say nothing of local champion Molymet.

With the results of the RFP due any day now, China’s dominance in acquiring raw materials in Latin America may be challenged.  As the Winter Olympics wind down, Korea’s biggest win maybe not in gold, but lithium.

Top Stories

S. Korea and Five Central American Countries Signed Free Trade Agreement — Business Korea
Comitiva hondureña viaja a Corea del Sur para firmar TLC — La Prensa
Central American nations to sign trade deal with South Korea — Yahoo News
Firma del TLC entre Corea y Nicaragua — Forbes
Preparando el nuevo escenario comercial entre Corea-Centroamérica — El Heraldo
Nicaragua, Panama, Honduras, Costa Rica, and El Salvador signed the Korea-Central America Free Trade Agreement in Seoul this week. After ratification by the respective countries, the FTA is expected to kick in by June. South Korea also has FTAs with Peru and Chile, and is looking to sign one soon with Colombia.

Consolidando los lazos con Japón… y sus vecinos — La Prensa Austral
Carne de cerdo, frutas y vinos: los sectores más beneficiados por el “nuevo" TPP sin EE.UU. — Economía y Negocios
Michelle Bachelet viaja a Japón con el TPP como tema principal de su agend — Notimerica
Guajardo: Con el TPP-11 y TLCAN, México tendrá lo mejor de dos mundos — Televisa News
Mnuchin says Washington studying possible return to TPP through renegotiation — Japan Times
Publican versión final del TPP, reglas impulsadas por EEUU quedan en suspenso — Swissinfo
Trans-Pacific Partnership fever - can you feel it? President Michelle Bachelet's final trip is to Japan this weekend, to finish details ahead of next month's signing. Mexican Secretary of the Economy Ildefonso Guajardo is optimistic that the deal will be a complement to his country’s position in NAFTA. Even the US is having second thoughts, with Treasury Secretary Steven Mnuchin saying the Trump administration is considering rejoining the TPP if they are able to secure better terms. With the clauses the US wanted still in the TPP — albeit suspended — the US might be able to get back into the club, but not under “better terms.” It might not even get some of those clauses reinstated.

La petrolera china Sinopec decidió quedarse en Argentina y ahora sale a buscar un socio — Bae Negocios
Fracasó el intento de Galuccio para quedarse con la petrolera china Sinopec — Diario Uno
Should the stay or should they go? Once rumored to be leaving, Chinese refinery Sinopec has decided to stay in Argentina and is looking for partners, of which local champion YPF and Pluspetrol are candidates. Sinopec’s decision was driven by Beijing’s incredulity at the $450m offer by Vista — headed by former YPF boss Miguel Galuccio — for assets Sinopec bought for $2.6b in 2010. A source close to Sinopec says:

“The Chinese government requests that such a loss be justified. Since no one can explain such a difference, and also since the price of a barrel of crude oil is rising steadily, there’s no longer any reason to leave."

Japan’s Mitsui wants more of Chile's Collahuasi copper mine, but none of Los Pelambres — Mining
Japonesa Mitsui reestructura inversiones en Chile para elevar producción de cobre — La Tercera
Japonesa Mitsui aumenta participación en mina de cobre Collahuasi en Chile — SwissInfo
Mitsui furthers mining portfolio with deals in Chile — Mining-Technology
Shuffling the cards? Mitsui is restructuring its copper investments in Chile by attaining minority interests in several different mines, or as they call it, “strategic asset recycling”. It will sell its 1.25% stake in Los Pelambres, but increase its stake to 11.03% in Collahuasi.

Visto eletrônico aumenta entrada de turistas no Brasil, confirma Embratur — IstoÉ
The Brazilian Tourist Board (Embratur) is chuffed about their new electronic visas for the US, Canada, Australia, and Japan. According to Vinicius Lummertz, Embratur’s president, the next step is to open Brazil to the Chinese market; discussions are supposedly already underway.

China-LAC

中国 对拉美直接投资超2000亿美元 跨境电商、共享创新合作业态多元化 — 21世纪经济报道 (21 Jing Ji)
In a report entitled “China’s FDI into Latin America Exceeds $200billion; E-commerce, Shared Economy, and Diversification” (中国 对拉美直接投资超2000亿美元 跨境电商、共享创新合作业态多元化) Alibaba's Cross Border E-commerce Research Center lays out it’s analysis of the potential for e-commerce in Latin America. They note that Brazil is the largest e-commerce market in Latin America — almost half of the total. Alibaba and Brazil’s postal service company Correios established a partnership in 2014, and AliExpress is sought after in Brazil. Last year Alibaba signed e-commerce agreements with Argentina and Mexico; it says it’s B2B business in the two countries already have millions of registered users. The Wan Fu Shan Industrial Park is the first large-scale industrial park developed by China in Mexico; it’s China's second largest overseas industrial park.

New ferry still docked in China — Guardian
New ferry delayed in China* — Daily Express
Chinese New Year delays Tobago ferry — Guardian
Trinidad and Tobago still has a lot to learn about China — delivery of the long-awaited new ferry to connect the two islands has been held up by Lunar New Year celebrations.

Automotriz china BAIC prepara inversión millonaria para construir fábrica en México — Xinhua
Chinese automaker BAIC to open first plant in Mexico — Xinhua
BAIC is moving forward with it’s plans to build a plant in Mexico. According to country director Jimena Saenz, BAIC plans to invest close to $1b in its first plant in Mexico. Saenz sees the opportunity beyond the uncertainty: “The commitment of BAIC with Mexico is long term, we’re looking much more to the future than to whatever happens” with NAFTA.

Arriban al puerto de Buenos Aires 20 nuevas locomotoras chinas — Xinhua
The twenty locomotives built by CRRC Ziyang for Buenos Aires’ suburban San Martín line have arrived in Buenos Aires. In total CRRC is building 107 locomotives, 3500 wagons, tools and materials.

Bici compartida , la industria que genera 1,700 MDD en China llega a México — Expansion
Mobike, desde China llega a Ciudad de México otra plataforma de bicicleta compartida — Xataka
Chinese deckles bikeshare companies Mobike and VBike are in Mexico. Mobike is launching a 200 bike pilot program, while VBike says it’s rolling out 5,000 in the delegación Benito Juárez. But VBike thinks it’ll only need 50,000 bikes for the whole country, so someone’s math seems off.

China tiene mucho que festejar (también en su comercio con México) — Forbes
México debe negociar con Asia: Torres Corzo — El Sol de San Luis
China es el gran ganador del TLCAN, asegura académico de la UNAM — La Jornada
Ni China ni EU son opción, México debe cambiar por dentro y ya no esclavizar su mano de obra: Simón Levy-Dabbah — La Vanguardia
China también es importante — Reporte Indigo
Mexican ambition is soaring. Enrique Dussel Peters, coordinator for the center of Sino-Mexican studies at the Autonomous University of Mexico (UNAM), reprimands Mexico for its lack of Mexican professionals dedicated to China, both in the private and public sector, wasting investment opportunities. Co-founder of Agendasia, Simón Levy, also points out Mexico needs a solid business model in order to excel as an industrial nation — just like China did. Senator Teófilo Torres Corzo, President of the Asian-Pacific Commission, has also remarked the need for Mexico to establish short-term investment strategies with Asia, which have invigorated the national economy in the recent past.

Chile releases cherry promotional video for Chinese New Year — Fresh Fruit Portal
It’s all about the cherries! The Chilean Cherry Committee release a video ahead of CNY to celebrate the occasion and remind consumers about cherry readiness in China.

A China sabe muito sobre o Brasil e o Brasil sabe muito pouco sobre a China — El Pais
#longread on China’s increasing presence in the West from FGV’s Oliver Stuenkel, in which he echoes our point by emphasizing that Brazil needs a China strategy, because China has a Brazil strategy.

América Latina: la última frontera de la rivalidad entre China y Estados Unidos — El Observador
Pese a Trump, el comercio de México con Rusia y China creció; advierten que EU va a tomar ‘venganza' — Vanguardia
EEUU se alarma por lazos de Rusia, Irán y China con Latinoamérica — HispanTV
China-Latin American ties prove US criticism wrong — Global Times
The weekly chin-strokes on what China (and Russia, and even Iran...) means for the US in Latin America. The most sober assessment is from Adm. Kurt Tidd, of United States Southern Command (Miami’s own Southcom) in his presentation of Southcom’s annual Posture Statement to Congress. China, of course, says everything is fine.

Las empresas peruanas apuntanal mercado de lujo en China — El Peruano
Chinese consumers are increasingly seeking luxury goods, and Peru thinks it can meet that need with Alpaca and Vicuña made products.

Argentina logró un acuerdo histórico para exportar carne a China — El Liberal
Fuerte crítica a los exportadores del embajador argentino en China — Clarin
El boom del “bife argentino", motorizado por China: las exportaciones de carne fueron las más altas en ocho años — iProfesional
Se duplicó la exportación de carne vacuna a China — La Voz
The Argentine beef industry is struggling with the opportunity presented by China. On the one hand, exports to China doubled in 2017. On the other, the Argentine Chamber of Industry and Commerce in Meats and Products (Ciccra) is complaining that their members are having to bend over backwards to meet China's phytosanitary requirements, requirements Ciccra says that Argentina had previously rejected. Argentine Ambassador in Beijing Diego Guelar is having none of it, and that his countrymen need to get with the program: “We need to profoundly review our export policy. Especially in the meatpacking sector.”

Peleas políticas, demoras y mucho malestar: entretelones de la puja entre China y Argentina por una central nuclear — Infobae
It’s not all joy between China and Argentina in nuclear power, either. A proposed $7b nuclear power plant has been blocked by local Río Negro province governor Alberto Weretilneck. The project may get moved to the existing Atucha plant at Zárate, Buenos Aires Province.

China supera EUA no ranking dos maiores compradores da região — Gazeta de Taubaté
Brazil’s Paraiba valley has traditionally exported it’s dairy products to the US. However last month China became the region’s biggest export market, consuming $108m in products.

Colombia quiere seducir a los turistas chinos — Expreso
The amount of Chinese tourists in Colombia increased almost four-fold between 2012 and 2017, and Colombia is seeking to attract more. Will it race Peru to attracting one million Chinese tourists a year?

Chile fortaleza relaciono con China en investigación antártica — Radio Polar
Chile firma convenio con China para investigación en la Antártica — Il Pinguino
China certainly isn’t picky about its reach. Chile and the Asian tiger have signed a memorandum of understanding making official the joint scientific investigation in the Arctic ocean.

Exportadores chilenos de frutas buscan abrirse mercado en China con peras y nectarinas — Spanish.China
We already know the Chinese love their Chilean cherries, but Ronald Brown, president of Chilean Association of Fruit Exports (ASOEX), says they’re looking to push nectarines and pears to the Chinese market. China currently imports 12.5 tons of Chilean nectarines.

Bridge for Chesterfield to arrive in Jamaica by end of March — Jamaica Observer
Seven bridges are being fabricated in China for delivery to Jamaica by the end of March, for a cost of $2m.

Cobre lideró exportaciones del Perú con US$13.773M en 2017 — America Economia
Perú licitará proyecto de cobre Michiquillay, el más importante de última década — SwissInfo
Copper led the way as Peru’s largest export in 2017, reaching over $13b, with China, Japan, Korea, and India as some of its top export markets. Peru hopes to auction its Michiquillay deposit next week, worth $50B in projects.

Más países siguen la nueva ‘Ruta’ de China — La Razón
More than 80 countries  and organizations have joined the Belt and Road Initiative, which, according to Liang Yu, Chinese Ambassador to Colombia, has contributed to 30% of global economic growth in the last 5 years.

Indecopi impone derechos antidumping a cierres importados desde China — RPP
Peru is enforcing antidumping measures on Chinese imported zippers.

Nicaragua’s stalled US$50b canal ‘going ahead’ as funds evaporate — SCMP
We’ve found a new euphemism for “completely stopped and not going to happen."

Japan-LAC

Argentina avanza en nuevos acuerdos comerciales con Japón — Marco Trade News
AGROINDUSTRIA: Argentina y Japón avanzan en el fortalecimiento de la relación bilateral — Marco Trade News
Argentina and Japan are in the home stretch to signing a Bilateral Investment Treaty. Noriteru Fukushima, Japanese ambassador to Argentina, says Japan recognizes Argentina’s growth and would be interested in increasing its investments tenfold, reaching $1b.

Miniso prosigue la expansión en Latinoamérica con su desembarco de este año en Colombia — Fashion Network
Japanese fashion house Miniso has confirmed its first expansion into Colombia, its second Latin America country after Mexico, which already has 20 stores.

Crecen comunidad y empresas de Japón en Guanajuato, México — Prensa Latina
In response to the presence of companies like Mazda, Honda, Toyota and Nissan, Irapuato, Guanajuato, is getting its own Japanese school. The $3M investment will come directly from Tokyo.

ARGENTINA: Japan Wants To Invest In Energy And Mining Sector, Says Secretary — Interactive Investor
El fortalecimiento de la relación estratégica CAF – Japón promueve el desarrollo y la productividad de América Latina — CAF
Novedades del sector real y financiero — Infobae
Empresarios japoneses buscan incrementar sus inversiones en el país — La Nación
Japón busca desembarcar fuerte en la Argentina y envía una misión de 50 empresarios clave — Clarín
Japón enfoca su interés inversor en minería e hidrocarburos — Téla
Japón impulsa más inversiones en Argentina en energía y minería — El Economista America
Comitiva japonesa busca oportunidades de inversión energética en Argentina — El Diario Madryn
A delegation of Japanese companies led by JETRO and JICA focus on energy and mining in Buenos Aires. Horacio Reyser, Argentina’s Secretary of International Economic Relations, has said Japan’s investments in these sectors may reach up to $20b in 10 years (having already invested $1.6b in the past two years). 

Japón y Turquía están entre los TLC que el Gobierno tiene pendientes por firmar — La Republica
Japón no termina de convencer a Colombia para dar luz verde al TCL — Finanzas Pedro Luis Olivares
As Colombian President Juan Manuel Santos’ term comes to an end, several free trade agreements negotiations have yet to be ratified, including deals with Japan, Turkey, and countries form the Pacific Alliance. Let’s see if the next presidency will be able to lock down these key markets.

Japón se acerca a América Latina — El Telégrafo
#longread on Japan’s rapid and substantial involvement in Latin America since Shinzo Abe’s tour of the continent in 2014.

Korea-LAC

Empresarios de Guatemala piden al Gobierno acelerar TLC con Corea del Sur — El Economista
Empresarios de Guatemala piden al Gobierno adhesión al TCL con Corea del Sur — La Vanguardia
Afraid to be left behind by their neighbors, business in Guatemala is begging the government to sign an FTA with South Korea. Guatemala is now the only Central American nation left to do so.  Guatemala has yet to close 15 chapters, including cement, plastics, paper goods, and metals. Jorge Briz, president of Guatemala’s Chamber of Commerce (CCG), says it would be a “grave mistake” to let this TLC slip away.

Rosario estrecha vínculos con Corea del Sur — Notife
Mayor Mónica Fein of Rosario — birthplace of Che and Messi — received South Korean Ambassador Lim Ki Mo.

Perú: envíos no tradicionales a Corea del Sur sumaron US$ 196 millones — Peru
Cocoa, chestnuts, sacha indi, and fresh shrimp are among Peru’s non traditional exports to South Korea, which reached $196m in 2017.

Brasil tenta retomar exportações de carne bovina para a Coreia do Sul — Época
There’s a slight chance Brazil may get to export beef to South Korea again, reaching $2b a year. Slight.

India-LAC

Lithium Can Bridge The Gap Between India And Bolivia: Sergio Arispe, Bolivia’s Ambassador To India — Business World
In an interview, Bolivia’s Ambassador to India Sergio Arispe is picking up what we’re putting down, and sees the opportunity for Bolivia to reach out to India using lithium.

GCC-LAC

New Dubai Chamber report identifies fintech and renewable energy as key to boosting productivity and investment in Latin America — Arabian Business
Ahead of next week’s summit, the Dubai Chamber of Commerce and Industry has commissioned a report: “Latin America’s Emerging Sectors: A Closer Look at Fintech and Renewable Energy.” It would be awesome if they’d actually release the report, but here we are.

ASEAN & Oceania-LAC

Western hand in China’s grand plan could build trust, UK minister says — The Sydney Morning Herald
As the west cautions China’s advances, could the solution be to join them? That’s what Mark Field, British Minister of State for Asia and the Pacific, has said. Geopolitical concerns can be assuaged by bringing British and Australian expertise to the table — if you cant’ beat them, join them.  

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Can the Gulf Cooperation Council really make an impact?

Up Front

In a news cycle dominated by China, it can be easy to miss that Latin America's commercial relationship is growing across all of Asia. As China pauses for the New Year celebration, we're taking the opportunity to highlight the role that the Gulf States that make up the Gulf Cooperation Council (GCC) are playing across Latin America.

Like China, this relationship was in many ways jumpstarted by the 2008 global financial crisis. The disappearance of traditional capital sources in the US and EU sent Latin America not only China but to the Doha, Dubai, Abu Dabi, and Riyhad. In 2010 Abu Dhabi Investment Corporation bought into the Brazil hype with a $1.3 billion investment in then high-flying André Esteves' BTG Pactual. Just over a year later, ADIC's sister fund, Mubadala, got in on the game with a $2 billion investment in Eike Batista's EBX. While ADIC and Mubadala were ultimately left shortchanged by Messrs Esteves and Batista — with only a faded hotel to show for the latter investment — their counterparts at DP World have found success in Peru, Argentina, Brazil, Suriname, and the Dominican Republic.

Recently, we've seen an uptick in activity between the two regions. The UAE has sent several high profile missions to Latin America. In the private sector, Saudi Arabia’s Abdul Latif Jameel Energy has agreed to build a 342 MW solar farm in San Luis de Potosí, and DP World consolidated it’s ownership of Brazilian's private multi-modal port terminal, Embraport, while also breaking ground on a $1 billion port in Ecuador. Elsewhere perennial global private equity player Abraaj Group has looked past recent troubles to buy a stake in Chilean home design and decorator Casaideas for an undisclosed amount and Kuwait stepped in to finance threescore hydropower projects for Havana.

At the end of this month, Dubai will be hosting the second Global Business Forum on Latin America. The gathering aims to bring together regional power players — including man of the hour President Juan Carlos Varela of Panama — to discuss the relationship. This month's Forum indicates that Dubai — and the Gulf more broadly — wants to become a serious player in Latin America. But with China clamoring joining traditional sources of investment looking at Latin America, it’s hard for the Gulf to be heard above all the noise. Latin America has barely enough capacity to handle China’s growing presence, much less also engage productively with investors from the GCC.

Rather than claiming to want to remake the world, and then have surprisingly little to show for it, investors from the Gulf would be wise to focus on areas where they can make the most impact. Where their interests overlap or complement those of Latin America. Food security is an obvious one, where Latin America already provides almost 50% of the meat that the GCC imports, according to the Economist Intelligence Unit. Aviation is another one, with Emirate’s plans to increase flights to São Paulo and onwards to Santiago a good sign.

Overall the goal for the GCC should be diversification of investments away from energy, not doubling down — we’re looking at you, Qatar Petroleum.

Top Stories

Perú y Australia firmaron Tratado de Libre Comercio — RPP
Australia and Peru sign FTA — Fruitnet
Perú accederá a un mercado deUS$ 200,000 mllns. en Australia — El Peruano
Peru opens trade office in Australia — Andina
Seven months in the works, Peru and Australia finally signed their Free Trade Agreement this week. Once ratified, most Australian horticultural exports will be rid of tariffs and in 5 years time, once PAFTA us fully implemented, more than 90% of each country’s exports will be duty free.

Usina a carvão busca crédito na China — Istoé Dinheiro
BNDES’ noble plan to limit coal financing, is opening up room for foreign investment to undercut those goals. After BNDES declared it will be prioritizing alternative energy solutions, Brazil’s Eletrobrás went to China’s Development Bank (CDB) for financing of its coal plant in Rio Grande do Sul. Coincidentally, Eletrobrás gave a R$230m ($80m) sole source contract to Citic Guo Hua International for an overhaul of the plant. 

Empresas chinas invertirán u$s 150 millones para parque eólico en Argentina — Cronista
Eólica en Argentina: Empresas chinas invertirán u$s 150 millones para parque eólico en Tres Arroyos — Ev Wind
However there’s better renewables investment news. The Inter-American Bank’s China LAC Cooperation Fund, China Energy Engineering Corporation, and Golden Peaks Capital have agreed to finance $150M for the 100 MV Viento Reta wind farm in Tres Arroyos, Argentina.

拉美外交官驳蒂勒森“中国威胁论”:非常看好与中国合作  — 参考消息 (Cankaoxiaoxi)
拉美缘何不买“门罗主义”的帐 — Xinhua
Economic Watch: Is China's development threatening Latin America? — Xinhua
ESPECIAL: ¿Desarrollo de China "amenaza" a América Latina? — Xinhua
While Trump eyes Latin America with malign neglect, China sees opportunity — The Guardian
Cooperación económica y comercial entre China y América Latina y el Caribe no implica condiciones adicionales — Xinhuanet
China compite con Estados Unidos en América Latina — 14 y Medio
China en América Latina — El Heraldo De México
LatAm in Focus: Latin America Has One Foot in China's Belt and Road — Americas Society / Council of the Americas
¿Desarrollo de China 'amenaza' a América Latina?  — La Estrella de Panamá
EEUU y China se enfrentan abiertamente para dominar Latinoamérica — HispanTV
China se aprovecha del desprecio de Trump por América Latina — El Diario
China’s ‘New Silk Roads’ reach Latin America — Asia Times
La China en Latinoamérica — El Heraldo de México
ESPECIAL: China ha sido un socio clave en la mejora de América Latina en buenos y malos tiempos — Xinhuanet
US Secretary of State Rex Tillerson’s remarks, or what Chinese media is calling Tillerson's “threat of China theory” (“中国威胁论”), have spilt a lot of ink. Stanford's Harold Trinkunas and our friend Carnegie-Tsinghua scholar Matt Ferchen argue it is “largely motivated by economic rather than strategic interests,” with China’s “illiberal influence” being exaggerated. In an official response, Chinese spokesperson for the Ministry of Trade, Gao Feng, says Tillerson has got China all wrong, and that they want what’s best for everyone. Ángel Melguizo, head of the OECD’s LAC unit, said “it’s not up to China to respond to all of Latin America’s demands, wishes, and needs” and that a win-win situation can be achieved by establishing trade relations “as a coordinated bloc of countries rather than on a bilateral basis.” 

美国与其甩锅不如自省 — People.cn
We don’t want to dwell on Tillerson’s remarks, as we think they will blow over in the short term. But this op-ed from China’s biggest newspaper group, the People's Daily, is insightful into how Tillerson’s remarks have really been received in China. The piece drips with sarcasm as it attempts to provide advice to Tillerson and the US. It criticizes the US for hypocrisy, asking why the US cares so much about Latin America when the US has always considered Latin America “its own backyard” (向来视拉美为自己的战略“后院”). It asks why the US says that China is “a new imperialist power,” smearing China after the U.S has called China an equal “competitor” (一个新帝国主义的典型,竟然给别国扣上“新帝国主义列强”的大帽子,呵呵,我也是醉了!) The piece closes with two traditional pieces of advice for the US to layoff the hypocrisy and treat China with the respect it wants. First from poet Xin Qiji: “青山遮不住,毕竟东流去”(“Blue hills can’t stop water flowing; eastward the river keeps going” — you can’t stop the river); secondly a classic from The Analects of Confucius:

吾日三省吾身                  
为人谋而不忠乎?                      
与朋友交而不信乎?       
传不习乎?                     

I daily examine myself on three points:
Whether, in transacting business for others, I may have been not faithful; 
Whether, in intercourse with friends, I may have been not sincere;
Whether I may have not mastered and practiced the instructions of my teacher.

 

China-LAC

外交部:愿同拉美国家继续推进务实合作   Xinhua
China becomes largest importer of Peru in 2017 — Xinhuanet
China alaba cooperación con Perú y dice que ambos encaran mismos retos — El Economista
RESUMEN: Perú defiende a China como buen socio comercial ante advertencias de EEUU — Xinhuanet
Perú defiende a China como buen socio comercial ante advertencias de EEUU —Marco Trade News
Latinoamérica y China, un beneficio mutuo alejado del imperialismo y el abuso — La Republica
Following Secretary of State Rex Tillerson’s negative remarks about China in LatAm, Peruvian Minister of Foreign Trade and Tourism, Eduardo Ferreyros, has come out and emphasized China’s satisfactory results as a trading partner. The Minister was also outspoken about increased American investments during Tillerson’s stop in Lima as part of his Latin American tour, saying “Peru is an open economy and has trade relations with most countries and will continue like this”. Other countries have also shown support for China, such as Argentinian ambassador in China, Diego Guelar, noting “we have nothing to fear as long as relations respect sovereignty and have clear advantages for all parties”. China saw a 36% increase in imports from Peru in 2017 — for a total of $11.5b — with fish and minerals cover the bulk of imports. Spokesperson for the Chinese Ministry of Foreign Affairs, Geng Shuang, added “the relationship between China and Peru is a very important part of our relations with Latin America”.

Ofo与膜拜单车准备首度骑进拉美 墨西哥成为第一站     Reuters
Mobike, la gigante china de arriendo de bicicletas está afinando su arribo a Chile — La Republica
Gigante china de arriendo de bicicletas llega a Chile y comenzará a operar en marzo — Play FM
Dockless bike pioneers Ofo and Mobike is expanding their presence in Latin America. Both are set to launch in Mexico. And Mobike is ready to hit Chile in March, with a 15 year contract with the La Reina neighborhood of Santiago.

Magma Partners teams up with Kr Space for first China-Latin America Accelerator — Deal Street Asia
Buscan acercar a emprendedores de Latinoamérica y China — 20 Minutos
Sino-Latin America Accelerator launches to bolster LatAm, China entrepreneurship — The Sociable
Further news on Magma Partners and China's Kr Space's Sino-Latin America Accelerator. They plan to invest in 60 LatAm startup companies over the next 3 years. We wish them happy hunting.

Mexico denies favouring Chinese consortium in bidding for high-speed rail project — South China Morning Post
Videgaray asesoró a empresa china en licitación del tren México-Querétaro, reporta Aristegui Noticias — Animal Politico
The ongoing debacle between China and Mexico over the ill-fated Querétaro High Speed Rail project continues. Mexican Foreign Minister Luis Videgaray has come under heat after allegations that the ministry gave the China Railway Construction Company a helping hand leading up to the contract auction.  The foreign ministry denies wrongdoing and claims business was carried “in an open and transparent fashion.”

The Belt and Road Initiative Didn't Quite Live up to its Hype in 2017 — Council on Foreign Relations
The CFR’s Brad Setzer thinks the Belt and Road Initiative (BRI) isn’t living up to the hype, and is just the repackaging of old projects under a new label.

Argentina desafía a EEUU y avanza en relaciones con Rusia y China — HispanTV
China y Rusia podrían ser principales socios económicos de México — Contramuro
Argentinian Ministry of Foreign Affairs has announced “concrete advances” in bilateral trade with Moscow, and Ambassador Guelar has noted the new “multipolar equation” that has erased external imperialist interests. Mexico has also noted a particular increase in Chinese and Russian imports.

Railway project connecting Pacific, Atlantic still on track: Chinese embassy in Brazil — Global Times
The Chinese Embassy in Brasília says we got it all wrong last week, and that the proposed Peru-Brazil Bioceanic Railway is still very much on track.

Costa Rica to deepen links with China — Shanghai Daily
Costa Rica foreign trade Minister Alexander Mora heads on a 3-day visit to China to speak with Chinese custom and trade authorities, e-commerce companies, and attend conferences. Mora wants to propose Costa Rica as a hub for the BRI project in the Caribbean, welcoming firms to settle in the lush country.

El dilema de la huella ambiental — Clarín
An op-ed from Eduardo Trigo of Austral University’s Agribusiness Center arguing that as China takes greater account for it’s environmental footprint, countries such as Argentina can benefit by providing environmentally-friendly meat and produce.

US 6 Billion Dollar Chinese Investment Project….A Game Changer For Jamaica. — Jamaica Information Service
Vice-Governor of Gansu Huang Qiang says that his Province is looking to invest $6b to develop an industrial park in St Elizabeth, Jamaica.

CEO global de Yokogawa visita Chile — Portal Minero
Potencial minero de Chile recibirá inversión de Japón — Minería Sustentable
Takashi Nishijima, CEO of Japanese industrial automatization expert Yokogawa, visited its affiliate in Chile, remarking the country’s mining potential.

Con el ingreso de Didi, la Uber china, en Latinoamérica se acrecienta el comercio de servicios — Marco Trade News
Following Didi’s high profile merger with Brazilian equivalent 99 last month, Didi Chuxing's Vice President Gu Tao has asserted they are now “studying and looking for new local partners in other Latin American markets”. Experts say Didi’s presence in the continent will further promote Sino-Latin American relations and showcase the region’s prowess.  

Didi Chuxing took on Uber and won. Now it's taking on the world — WIRED
In a feature edition focused on China’s tech dominance, WIRED’s long read highlights Didi Chuxing, the car-hailing app that has beat Uber in China, and its president Jean Lui. Valued at $56B, delivering roughly twice as many rides as all global sharing apps combined, Didi could soon take over the world (possibly with self driving cars).

Air China seeks approval for Houston-Panama route. — Air Transport World
Air China will apply next month for a Beijing-Panama route (via Houston), helping Panama in it’s argument to be a regional hub.

Interview: Chinese investments could boost Panama's agricultural sector — Xinhua
Esteban Giron, Panama’s Deputy Minister of Agricultural Development, says the country’s bilateral relations with China could be a big help to the agricultural sector due to increasing transfers of technology and capital.

Mapped: Chinese exports take over the world — Axios

china trade.gif

Axios maps out China’s unprecedented export global takeover, which was the size of the Netherlands' only two decades ago.

Cadena china de hoteles de lujo operará hotel en borde costero de Viña del Mar —Biobiochile
Luxury Chinese hotel group Mandarin Oriental sets sail for South America for the first time, investing $70M for the development of a hotel in Chile’s costal resort Viña del Mar.

Para China, 50% del superávit de México con EU — 24 Horas
Simón Levy-Dabbah from Agendasia notes that 50% of the $71.5b trade surplus that Mexico has with the US gets recycled into the trade deficit the country has with China. This will fuel the arguments of those in the US who see NAFTA as zero sum.

Chile pierde participación en mercado del cobre por noveno año consecutivo — La Tercera
Chile’s copper production fell for the ninth year in a row, to Peru’s benefit. Chile has struggled due to a lack of new mines However, Jorge Cantallopts of Chile’s Copper Commission (Cochilco) says Peru’s success will not lead to increased competition with Chile but rather become complementary to its souther neighbor.

Facultad de Economía UNAM anuncia cuarta edición de cátedra México-China — La Jornada
The National Autonomous University of Mexico (UNAM) will be hosting its fourth conference on Mexico-China relations next week. NAFTA renegotiation and trade with China will overshadow the discussion.

Brexit, China and the future of global trade — World Economic Forum
Former Trade Minister of Costa Rica, Anabel Gonzales, tackles a post-Brexit world and the future of international trade. While Brexit, TPP and NAFTA renegotiations shook the world system, regional integration has seen a boom in recent years through diverse PTAs, encompassing almost all corners of the globe. There has been a rise in protectionism in the West, but the rest of the globe is actively increasing interdependency and, hopefully, encouraging others to do the same.

Brasil compensa embargo da Rússia em carne suína com vendas na China e Hong Kong — Info Money
China helps Brazil compensate export losses following Russian embargo on pork meat. Last month alone, China increased imports by 122% and Hong Kong by 23%.  

En riesgo venta de Odebrecht a estatal china de hidroeléctrica peruana Chaglla por US$1.400M — América Economía
Last year’s announced $1.4b sale of the Chaglla Hydroelectric plant by Odebrecht to China’s Three Gorges is at risk. The sale agreement expires on February 23, and Peru’s Ministry of Justice still hasn’t signed off. Odebrecht’s creditors are waiting with baited breath.

Comercio electrónico contribuye a cooperación económica sino-latinoamericana — Xinhua
Zhao Ping, director of the international commerce department of the China Council for the Promotion of International Trade (CCPIT), talks about e-commerce as the next step in solidifying China-Latin America relations, in particular in consumer goods. 

Latinoamérica importó 7,0 millones de toneladas de acero a China en 2017 — Mundo Marítimo
China exported less steel in 2017 than the previous year, but Latin America imported 7m tones more, 2.4% up, and at a lower price than the rest of the world, at $634 per ton.

Chinese ODI and M&A in Latin America: new features of a current trend — Financier Worldwide
The folks at Financier Worldwide recognize the changes in Chinese interest in LatAm, shifting from predominantly federal extractive ODI’s to including M&A’s in the service sector throughout the continent. As China’s interest exponentially increases, we should see its annual figure of $10B in LatAm investments rise over the next few years.

 

Japan-LAC

Japón dona vehículos y equipos a la Defensa Civil de Perú — InfoDefensa
The Japanese government has donated vehicles, materials, and equipment to the Peruvian National Institute of Civil Defense (Indeci), worth around $4.5M.

Visto eletrônico pode atrair 25% mais japoneses ao Brasil — Gazeta do Povo
Brazil’s new e-visa program is expected to increase Japanese tourists to the country by 25%.

Durango fortalece lazos con Japón — Laguna
Durango’s governor, José Rosas Aispuro Torres, met with Japan’s ambassador in Mexico, Yasushi Takase, to welcome investments in the state.

Meiji to support Mexico with white cacao saplings — The Japan News
Japan’s Meiji Holdings Co is sweet on Mexico, saying it will provide Mexican farmers with 10 thousand saplings of rare white cacao in an effort to revitalize the Tapachula region. Supposedly the birthplace of cacao farming, Meiji also opened a 100ha (247 acre) plantation in Tapachula in 2016.

Korea-LAC

Por estrategia, Argentina reduce frecuencias aéreas a Cancún — SIPSE
Aerolineas Argentinas has announced it will reduce flights to Cancún, as it focuses on increased flights to countries including Korea, China, and Japan. Sorry spring breakers.

India-LAC

Mexico Wants 200,000 Indian Tourists by 2022 — Travel Pulse
The world’s eighth most popular destination wants more visitors: Mexico hopes to attract 200,000 (2 lakh) Indian tourists by 2022, hoping to catch 4% of India’s expected outbound tourism.

Oceania - LAC

These ten Australian tech companies have won places on Latin American accelerator — Anthill
Ten Australian tech companies are in the LatAm Market Entry Acclerator shortlist for 2018. Sponsored by the Australian Department of Foreign Affairs and Trade, the accelerator program provides an opportunity for Australian businesses to reach Latin America, focusing on agricultural, energy, mining, and water technologies.

GCC-LAC

India wants to collaborate with UAE on exports to 'Africa, Central America and Central Asia' — The National
Are India and the UAE teaming up? Following meetings between Suresh Prabhu, India’s Commerce and Industry minister, with the Abu Dhabi Investment Authority and the Mubadala Development Company, the minister has noted the countries would like to expand their strong bilateral relationship and seek investment in third countries. We’d double check on investing with Brazilian billionaires.

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Hainan Airlines spreading its wings across Latin America

Up Front

Despite struggles for its parent company HNA — which is selling off real estate and other parts of its empire in New York, Sydney, and Hong Kong at what observers are saying is the behest of the authorities in China —  Hainan Airlines is continuing its push into Latin America.

Last July HNA bought Odebrecht’s controlling stake in Rio de Janeiro’s R$4b ($1.25b) Galeão International Airport for $330m. That deal followed the 2016 $450m purchase of a 24% stake to become the largest shareholder in Brazil’s Azul airlines.

This week comes news that Hainan and HNA continues to be looking at Latin America as a priority, with two advances.

First, Hainan Airlines announced that on March 21st, it will begin thrice-weekly service between Beijing and Mexico City (with a stop in Tijuana). This first flight connecting the two countries’ capitals will complement existing flights operated by China Southern Airlines (Guangzhou-Mexico City) and Aeroméxico (Shanghai-Mexico City).

Not content with growing it’s business in Mexico, Hainan Airlines also announced that it is partnering with Israel’s Tal Aviation Group. Tal has represented El Al and Greece’s Aegean Airlines in Brazil since 2014. As well as helping out in Mexico, Tal will "administer Hainan’s interests" in Brazil, Colombia, and Panama. Any guesses as to which markets in Latin America Hainan is likely to send flights to next?

Top Stories

"América Latina no necesita un nuevo poder imperial": la dura advertencia de Estados Unidos sobre la creciente influencia de China en la región — BBC Mundo
Tillerson alerta de la expansión de China y Rusia en América Latina — El País
Tillerson alerta de "presencia creciente" de China y Rusia en Latinoamérica — El Universal
Tillerson extols 19th-century US foreign policy in Latin America. — Financial Times
La Doctrina Tillerson — El País
América Latina: ¿Manzana de discordia entre China y Estados Unidos? — Hoy
Gallagher in The Atlantic on China, Latin America and the U.S. —BU
China offers better model for LatAm — ECNS
China e EUA: competição crescente na América Latina — CEIRI
American Secretary of State Rex Tillerson ruffled feathers ahead of his tour of Latin America this week by saying - of China-Latin America relations: “Latin America doesn’t need a new imperial power only looking to benefit its own people”. Kevin Gallagher, China-LAC expert from Boston University, and our friend Christopher Sabatini, International Relations professors at Columbia University, argue that this battle over influence in Latin America surpasses economic interests and Tillerson’s remarks are only self-serving. In praising the Monroe Doctrine, the Secretary appeared antiquated and putting his best Trump foot forward. At the end of the day, says Gallagher: “neither China nor the USA can make the region prosperous.”

Brazil drops railway to the Pacific for China exports, citing costs —The Business Times
The long-struggling 5,000km railway project proposed to connect Brazil and Peru by Xi Jinping in 2014 has finally been put out of it’s misery Brazilian authorities. What was meant to speed up and cheapen exports to China was found by Jorge Arbache, International Secretary at the Brazilian Ministry of Planning, to be “extremely costly and the feasibility study […] unsatisfactory”.

Fiscal recibe a Rafael Correa por caso Petrochina — El Comercio
It’s a bad week for former Ecuadorian President Rafael Correa. After losing his chance to get elected again on Sunday, on Monday he was interrogated by prosecutor Fabián Salazar (albeit in a voluntary hearing) about the growing PetroChina-Ecuador contract case scandal.

Will a U.S. Absence Diminish the New TPP Agreement? — The Dialogue
The Dialogue asked a panel of experts their thoughts on the recently agreed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP, or - you know - TPP) and its viability without the US. In almost complete unanimity, they stressed the increased growth, benefit, and cooperation that will derive from the treaty, covering about 15% of global trade and opening a nearly 500m person market. As a bonus, Canada and Mexico get a lifeboat ahead of NAFTA negotiations.

Chile, the Trans Pacific Partnership’s unlikely savior — The Global Americans
Our friends Anders Beal and Benjamin Gedan from the Wilson Center’s Latin American Program praise quiet Chile for stepping up, first by hosting a global summit in Viña del Mar for the remaining TPP members and then for creating dialogue around a new TPP at the APEC Summit in Vietnam. They like that Chile has been a “longtime free market champion”, but we really like its new leadership role.

China-LAC

Qingdao-China planea invertir más de $5 mil millones en Panamá — La Estrella de Panamá
During a meeting with Panamanian officials, representatives and investors from Qingdao — the world’s 8th largest port — said they plan to invest upwards of $5b (yes, billion) over a 5-year period in the Latin American country. The investment would be directed towards tourism, infrastructure, and wood exports.

Xi Jinping vows to boost ties with Uruguay after US warning to Latin America — South China Morning Post
China carga contra EE.UU. y defiende su papel en la región — La Nación
Chinese President Xi Jinping got in some subtle digs in response to Tillerson’s statements in a message on the occasion of thirty years of diplomatic relationships between China and Uruguay.

China y América Latina, una asociación ganar-ganar — La Estrella de Panamá
An Op-ed from La Estrella sees China-Latin America relations as a win win: complementary economies, similar goals, and sincere desire to cooperate have resulted in concrete economic implementation and successful political strategies. Panama gets a shout out for being the “bridge and point of connection between China and the rest of Latin America”.

Representantes de China y Panamá realizan reunión técnica para definir proyecto ferroviario — Xinhua
Representatives of China, Panama meet over proposed rail project — Xinhua
Panama and China are moving fast. Only 8 months after establishing diplomatic relations, Panamanian representatives met with China Railway Design Corporation to discuss technicalities surrounding the proposed 450km long Panamá-David railway, as part of the Belt and Road project.

China acelera plano de expansão no Brasil e na América Latina — Exército Brasileiro
China acelera plano de expansão no Brasil e na América Latina — Portos e Navios
Governo quer maior diversificação de investimentos da China no Brasil, diz secretário — Extra
O apetite chinês por negócios no Brasil — Veja
Brasil é instigado a investir na Ásia — Blasting News
The Brazilian military is paying attention to China - reprinting articles about Chinese investment. China, which has invested $50b in Brazil, one quarter of its total investments in Latin America, but wants to go beyond just food products: it has recently made a deal with an electric bus company. Fortunately, Brazil seems to want the same: planning secretary Arbache has said Brazil seeks more diverse and greenfield investments from China.

“China espera los primeros envíos de langostinos peruanos” — El Peruano
Perú acrecienta sus lazos con China — Marco Trade News
Perú el segundo proveedor de arándanos a mercado chino — Debate
Perú exportó a China 4.000 toneladas de arándanos — CrónicaViva
Exportación de arándanos creció en 50% durante el 2017 — La Republica
In an interview,  Diana Pita, commercial advisor of Peru in Beijing, boasted the country’s relationship with China (23% of their exports go there) and their continued cooperation, which has recently resulted in China importing Peruvian shrimp — estimated to reach $200 million. Peru has also just become the second largest exporter of blueberries to China, after Chile.

Chinesa CEE quer expandir negócios no Brasil e prevê fábrica — Exame
Privately-owned Chinese company CEE Power is eyeing Brazil, following a recent series of energy deals by Chinese firms such as State Grid, China Three Gorges, State Power Investment Corp, and Shanghai Electric in the country. Active in recent auctions, CEE Commercial Director for Brazil Marcio Coelho argues they’re better than their larger compatriots:

“While we are Chinese, we are a private company in China, and we’re smaller than a State Grid… our steps are more cautious, as projects have to have a financial return."

China Railway to build cancer treatment facility in T&T — Daily Express
China Railway Construction Company will build an $84M cancer treatment facility in Trinidad and Tobago.

Interesa a China el mercado de productos de México, aunque descarta invertir a corto plaz — Vanguardia
Mexican Secretary of Economic Development, Jamie Guerra Pérez, says China is not looking for short term investments in Mexico but has faith that Coahuila, and its proximity to the US and automotive industry, will bring in medium-term investments.

Liang Yu: ‘Bolivia es un socio confiable para China’ — La Razón
Yang Li, Chinese ambassador to Bolivia, says there needs to be more coordination between the nations in order to increase efficiency, and cooperation, in the future. Bolivia may not be a Latin American giant, but China has made strides in its relationship by becoming its largest importer, largest financier, and second largest trading partner.

Empresa China acusa a Leonardo Farkas por presunta estafa — CNN
Chinese firm Qisheng Resources Limited (QRL) has announced it will take legal action against Chilean philanthropist Leonardo Farkas for alleged fraud. The issue stems from 2010, when QRL accused the Santa Fe minery, controlled by Farkas, for breaking a contract.

Perú y China dialogan sobre marcha judicial — Expreso
Duberlí Rodriguez, President of the Peruvian Supreme Court, received a visit from Jiang Bixin, President of China’s Supreme People’s Court, where the latter donated over 4,000 computers.

China mantiene liderazgo como principal proveedor del Perú — El Comercio
AGENCIA ANDINA: China es el principal proveedor de bienes de Perú por cuarto año consecutivo — Marco Trade News
Peru’s imports have been dominated by Chinese products for the past four years, seeing a 7.5% increase in the last year totaling 20% — with tech products leading the pack.

Preocupan elecciones al banco chino mexicano — El Milenio
Industrial and Commercial Bank of China (ICBC) Mexico, is getting worried about the results of the upcoming July presidential election, and how that will affect intergovernmental politics and the Bank’s place in the economy.

COMEXI, The Dialogue & HSBC present: China and the New Global Order — COMEXI
The Inter-American Dialogue, COMEXi, and HSBC hosted an event to explore China’s recent policies towards the Latin American continent and, in particular, its relationship with Mexico, where our friend Daniel Erickson was able to provide trenchant insights.

Korea-LAC

Qualcomm e coreana anunciam investimento de US$ 200 mi em fábrica de chips no Brasil — Folha Pe
Is Brazil in play to become a tech hub? Qualcomm and, ASE subsidiary, ASI have just announced a joint venture to build a semiconductor factory in Campinas, investing $200M over 5 years. The goal is to simplify its manufacture, and create one capable of retaining the potency of a much larger semiconductor.

Corea del Sur busca acuerdo con México —El Universal
South Korean ambassador to Mexico, Kim Sang-Il, pushes for his country to become an associated member of the Pacific Alliance.

Excomandante de las Fuerza Armadas  nuevo embajador de Colombia en Corea del Sur — El Colombiano
Colombia has appointed Juan Pablo Rodriguez, an ex commander of the Armed Forces, as the new ambassador of Colombia in South Korea.

Japan-LAC

Pemex Refining Head Looks to Mitsui-Led Deal to Help Struggling Business — Bloomberg
The new $2.6b coking plant venture with Mitsui should be a shot in the arm for Pemex. The partnership should help increase Pemex’  production by 40 percent, reducing the nation’s recent reliance on imported oil.

Guanajato impulsa proveedora en Japón — El Economista
Seeking to strengthen ties, Mexican state Guanajuato’s foreign commerce promotion agency (Cofoce) was welcomed at the International Automotive World Fair in Tokyo, alongside 6 local companies.

Aerolíneas conectarán a Bogotá y San Salvador con Japón via México — Pulso
Avianca and All Nippon Airways have agreed to expand its shared flight network to include flights connecting Japan with Colombia and El Salvador, through Mexico City. Seems that Mexico will surely be benefitting from additional flights connecting the regions.

Fortalecen relaciones Cuernavaca y Japón — Diario de Morelos
Executives from the Japanese Mexico Association met with Cuernavaca Mayor Cuauhtémoc Blanco Bravo. In May Cuernavaca will host the next Mexican National Nikkei Convention.

India-LAC

India, Chile for Strengthening Coop in Trade, Commerce, Renewable Energy, Space & Def Sectors — Uniindia
Chile seems to be in high demand, as Indian Vice President Venkaiah Naidu expresses hope over the implementation of the Expanded India-Chile Preferential Trade Agreement (PTA) while welcoming a delegation led by the president of Chile’s lower house, Fidel Espinoza. The delegation was received in New Delhi to welcome Chile as a member of the International Solar Alliance.

ASEAN & Oceania-LAC

Maersk Line ofrece nuevas conexiones directas con Asia a Colombia, El Caribe y puerto Pecem en Brasil — Mundo Marítimo
Porto do Pecém será o único do Brasil em nova linha da Maersk Line para a Ásia — O Povo
Maersk Line, global container giant, announced its new Asia-Latin America service will start in April. The line will make stops in Colombia, Panama, the Caribbean, and the Brazilian port of Pecem, the latter which will now have a  direct line to Singapore. Clients will benefit from more “direct services, better transit time with the Far East, and larger port coverage”, says Lars Nielsen, President of Maersk Line in LatAm.

México debe fortalecer comercio con Asia: académicos — Excelsior
Reunión con Embajadas de ASEAN — COMCE
Mexico’s relationship with Asia has strengthened in recent years, but academics from UNAM say there needs to be an improvement in the realm of commercial business and foreign investment with Asia, especially Korea, Japan, and China, with emphasis on diversifying trade and establishing free trade agreements with the region. The Consejo Empresarial Mexicano de Comercio Exterior, Invérsion y Tecnologia (COMCE) hosted ASEAN Ambassadors to push the issue.

GCC-LAC

Dubai Exports Builds on Brazil Ties to Boost Trade and Economy — Albawaba
Dubai’s export promotion agency recently visited Brazil in an effort to increase bilateral ties and engagement.

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The Belt & Road is a reality for Latin America, even if it isn't in it

Up Front

There has been a lot of discussion on the Belt and Road Initiative and Latin America, including at last week’s China-ECLAC forum. What we call the “soft expansion” of the Belt and Road to the Western Hemisphere has always had more cheerleading from Latin America, compared to a more circumspect approach by Chinese officials. Our friend Margaret Meyers at The Dialogue notes this and asks as the key question: "LAC’s Not Part of the Belt and Road, but Does That Matter?

Chinese officials referred to the region as a “natural extension” of the Maritime Silk Road, while adding that the region is an “indispensable participant” in the construction of the BRI.

Although this language is suggestive of BRI-LAC linkages, no steps were taken by Wang Yi to formalize LAC participation, or, more importantly, to extend financing from the Silk Road Fund, a $40 billion investment fund established by China to make its Belt and Road ambitions a reality.

She notes that of the seventy counties that have signed a Belt and Road Cooperation Agreement (“一带一路”合作协议) with China, Panama is the only one in the Western Hemisphere.

Whether Latin America formally remains in or out of the Belt and Road Initiative, more Latin American countries signing up. Uruguay — who has been on the front end of engaging China, at times to the chagrin of it’s neighbors — last week agreed with China to sign a Cooperation Agreement “as soon as possible."

Not to be left out, Argentine President Mauricio Macri — who travelled to the Belt and Road Summit last year representing Mercosur — sat down in Buenos Aires this week with Chinese Finance Minister Xiao Jie where the latter talked about how the Belt and Road Initiative can be a vehicle through how the Asian Infrastructure Development Bank (AIIB) can finance projects such as hydroelectric dams in Santa Cruz, as well as the Black Water Tunel (Túnel de Agua Negra) to connect San Juan with Chile’s Coquimbo region.

However, countries in Latin America need to keep in mind that the Belt and Road Initiative isn’t just a funnel for needed infrastructure financing. It can be a challenge to existing economic models. This week China announced that the Belt and Road Initiative will now include the North Pole and Northwest Passage (一带一路延伸至北极和拉美 外媒:真正成为全球方案 from 参考消息网 [Cankaoxiaoxi]). While most commentary focuses on the challenge to the US, shipping from East Asia to the East Coast of North America could be $600k cheaper per ship than through the Panama Canal. The first country in Latin America to sign up for the Belt and Road Initiative could be the first one to be hurt by it.

Top Stories

Ferreyros: “TPP-11 permitirá que exportaciones crezcan 22%” EL Comercio
El CPTPP generará oportunidades para exportaciones no tradicionales de Peru — Xinhua
Mercedes Aráoz: "El TPP-11 será positivo para el Perú — El Comercio
Peruvian Prime Minister Mercedes Aráoz and Trade Minister Eduardo Ferreyros crow about the benefits to their country of the Trans-Pacific Partnership (TPP), including free trade with four new countries: Brunei, New Zealand, Malaysia and Vietnam. Ferreyros expects exports to grow 22% thanks to TPP.

Te vas porque yo quiero que te vayas… Del TPP. - Japón a EU— Expansion
Japón y Chile descartan renegociar el TPP para incluir a Washington
Following President Donald Trump’s surprise musing that he would think about bringing the US back into the TPP if it was made "substantially better," Japan and Chile have said they think the TPP is fine as is: “If the US wants to join, this does not mean a new renegotiation,” says a spokesperson for the Japanese government.

México subestima su potencial — Milenio
Con China y Japón, México avanza en diversificación comercial: ProMéxico — El Economista
Los Aranceles que Sí Paga México — Expansion
In the face of NAFTA uncertainty, Mexico needs to come out of it's shell (to use Harry Van Shaick’s metaphor) and promote itself to the world. ProMexico’s Paul Carreño King is on it,  noting that China and Japan are at the top of the league table of Mexico’s growing trading partners, having increased trade by 180% and 100%, respectively. As a result, the US has declined in it’s dominance as a trade (75%, down from 80% in 2012) and investment (35%, down from 46%) partner. But Mexico still faces a lot of tariff barriers with places like China, Taiwan, and South Korea that hold it back.

China’s Dockless Biking Boom and the Lessons for Latin America — Inter-American Development Bank
Chinese bike-sharing firms gear up to launch in Mexico — Reuters
Bring On the Bikocalypse — Wired
Everyone is talking dockless bikeshare this week. Rival Chinese bike-sharing companies, Ofo and Mobike, have set their eyes on Mexico, where they are ready to launch. Having raised over $1b each, they will strengthen China’s tech presence in Mexico and increase interest in alternative transportation services in the gridlocked country. And they are looking further, says the IDB:

OFO one of the largest Chinese bike-sharing companies, announced that it would enter the Mexican market, covering Mexico City, Guadalajara and Monterrey. Davis Wang, CEO of Mobike, another major Chinese firm, has said the company expects to enter three to five major Latin American cities in the first half of this year.

While some are concerned about importing Shanghai’s bike-chocked sidewalks, our friend Felix Salmon says embrace it — it is an opportunity to retake megalopolises from cars.

China moves into Latin America — The Economist
“美国优先”冲击美拉关系(国际视点) — People.cn
China aprovecha el vacío de Trump para ganar peso estratégico e inversor en América Latina — Publico
¿Las políticas de Trump favorecen la integración de América Latina? — Marco Trade News
At Davos, the Real Star May Have Been China, Not Trump — New York Times
A series of articles providing comprehensive overviews of the relationship between China and Latin America, and the US’s diminishing influence in the region. Michael Reid’s Bello column in the Economist provides a good summary of the moves of “the friendly dragon” into Latin America.

Former Chilean Finance Minister Andrés Velasco sums up how Trump’s America First policy clears up stumbling blocks to trade deals: US agriculture subsidies are no longer an issue for Brazil and Argentina; Brazil and the US are no longer vying for regional dominance; and it goes hand-in-hand with the decline of “retrograde populism” in Latin America:

"If the three main obstacles have disappeared," Velasco asks, "what prevents the creation of a free trade agreement (without the US) of the Americas? Nothing, except political inertia and lack of clear leadership. However, there is no shortage of regional leaders who could carry the torch.

Checking in from Davos, the NYT puts the issue in a global dimension:

In Davos, President Temer of Brazil said that he was not concerned about the rising influence in South America of China, which has increased investments in his country and extended enormous loans to Venezuela and Ecuador.

Mr. Temer said [Venezuelan] debts should be seen as a financial issue, not a geopolitical one. “The major concern they have is to recover the loans they gave Venezuela, they want their payment,” he said in an interview. “This was actually quite explained in the meetings we have.”

China-LAC

China triplicará participación en Feria comercio Expocomer en Panamá — Xinhuanet
China, el protagonista de Expocomer — Metro Libre
China is tripling its exhibits at this year's Expocomer International Commerce Fair in Panama. Panama is happy, as this shows China’s increasing "interest in considering Panama as a point of distribution for theirs products throughout the region”, says Néstor González, Minister of Industries and Commerce.

Grupo chinês Fosun avalia aquisições e vê espaço para ampliar negócios no Brasil — ISTOÉDinheiro
Fosun is bullish on Brazil. After it’s acquisitions of Rio Bravo and Guide Investimentos, it says it is focused products and services destined to the middle class. Fosun invested over $150M in Brazil over the past two years and country rep Diogo Castro is undeterred by the upcoming Brazilian elections.

Interesse chinês anima empreiteiras — Estadão
Companies like China Communications Construction Company (CCCC), China Railway Construction (CRCC) and China Road and Bridge Corporation (CRBC), are moving to fill the void in civil construction in Brazil in the wake of the Lava Jato corruption scandal.

¿Miedo a Trump? Macri no respondió invitación china por TLC con Mercosur — Urgente 24
Buscan acuerdos con la Alianza del Pacífico y China, con el Mercosur — La Mordaza
Esencial comercio libre con China — El Observador
Nin: De la inversión de China en América Latina, Uruguay recibe solamente el 0,2% — Espectador
Uruguay and China flirt with a trade agreement, but Mercosur is not convinced —Merco Press
The pas de deux between China and Mercosur continues. While Uruguay continues to be the driving force, Argentina is warming to the idea, but hasn’t responded to China’s invitation to begin discussions with Mercosur. And there doesn’t seem to be a peep out of Brazil, nor likely will there be until after October’s election. Maybe free trade is the carrot that gets Paraguay to switch diplomatic recognition to Beijing?

The Heat: China-Latin America relations — CGTN
CELAC driving for a Silk Road of shared interests — China.org.cn
Tentacularidad China I — Analítica
Round-ups following up on last week’s China-ECLAC Forum. The most controversial, from Beatriz de Majo, is downbeat: she asks us not to delude ourselves, that China seeks to lock in a sphere of influence in Latin America while building alliances in left-leaning countries, skeptical of the imperialist to the north. She says that the relations between China and countries like Mexico, Ecuador, and Uruguay show how China wants to subjugate and subdue Latin American nations.

China se consolida como el primer socio comercial de Chile con el 26% de las exportaciones — Xinhua
China se destaca como principal parceiro comercial do Brasil em 2017 — brazil.gov.br
The governments of Chile and Brazil note that China remains their largest trading partner, with the country being the largest trading partner for 13 Brazilian states.

Brasil supera Venezuela em fornecimento de petróleo à China — O Globo
Thanks to the collapse in Venezuela’s oil exports (down 25% since 2015), Brazil now supplies more oil to China — sending 455,338bpd in 2017.

Trina Solar and Mitsui win 104MW project in Mexico auction — PVTech
Chinese firm Trina Solar and Japanese conglomerate Mitsui won a bid for a 104MW solar project in Zacatecas, after having won an earlier 133MW project in Aguascalientes.

Ecuador says reaches partial deal with China over crude sales — Reuters
Exportación de crudo entre Ecuador y China podrían concretarse este año — Energia16
Ecuador has agreed on the price formula over crude sales with PetroChina and Unipec Asia, but says it will “continue to seek more advantageous conditions.” Ecuador has also agreed to the second phase of the Ishpingo-Tambococha-Tiputini project —  Petroamazonas will drill 97 wells in an oil field purported to hold 287m barrels of oil. President Lenín Moreno expects a return of $2.4b a year once the project is at full throttle.

Principal aerolínea de Panamá reconoce potencial de alianza con Air China — Xinhuanet
Copa Airlines CEO Pedro Heilbron is looking to integrate further with Air China for the China-Panama route, with the goal of making Panama the “hub of the Americas.” Air China has announced it will be setting up a regional office in Panama.

José Antonio Valdés, presidente ejecutivo de Pacific Hydro: “Los proyectos hidroeléctricos hoy son muy difíciles de hacer” — La Tercera
Pacific Hydro’s executive chairman José Antonio Valdés sees Chinese investment in Latin America as paramount. Optimistic about Pacific Hydro’s renewable energy capabilities thanks to Chinese ownership, Valdés hopes Chile will be able to distinguish itself and attract FDI to fund projects he wants to build.

Nectarines chilenos llegan a China con precios similiares a las cerezas — Estrategia
The first shipment of Chilean nectarines has arrived in China.

China abre seu mercado de 1,3 bilhão de consumidores para o mundo — Istoé
Em coletiva, China faz convite aos países para mercado de consumo — Cruzeiro do Sul
China is opening its 1,3 billion consumer’s market to the world by inviting nations to join the first China International Import Exposition (CIIE) in Shanghai in November. Chinese diplomats in Brazil are eager for the possibility to showcase more of Brazil's products.

China y Chile acuerdan cimentar intercambios parlamentarios — Xinhua
Chile espera exportar más cobre y litio a China para sus autos eléctricos — Cooperativa
China’s parliament speaker, Zhang Deijang, and president of the senate in Chile, Andres Zaldívar, met in Beijing to talk Chinese interest in Chilean copper and lithium, and Chile’s interest in exporting more fruit and meat. It’s unlikely they talked about Zaldívar’s weird investigation last year.

Sharp Power: Rising Authoritarian Influence — National Endowment for Democracy
The National Endowment for Democracy puts out a report on China in Latin America. Author Juan Pablo Cardenal targets China’s soft power strategies to influence the region, bringing attention to asymmetrical trade relationships and consequences. He says a hallmark of this strategy is people-to-people exchange, a form of public diplomacy that emphasizes the establishment of personal relationships with influential individuals. China has pursued this through sponsoring of educational, cultural, and academic programs and activities. Cardenal claims this policy has been far too well received by the Latin American elite.

Tras la polémica por su eventual uso militar, la estación espacial de China en Neuquén ya empezó a funcionar. — Infobae
China has established a space tracking station in Neuquén, Argentina, which began working three months ago despite fears of military use.

Pesquisador vê risco de influência política da China no Brasil — Folha de São Paulo
Thorsten Benner, director of the Global Public Policy Institute in Berlin, gave a presentation to the Fundação Getúlio Vargas in which he raises concerns about the influence of China on Brazil.

Argentina potenciará su exportación de alimentos para mascotas a China — Primera Edición
China and Argentina have reached a deal for Argentine pet-food to be sent to China. While less than 4% of the Chinese population owns pets, agroindustrial Secretary Marisa Bircher sees “great potential in the market of placing a product with high aggregate value.”

Korea-LAC

Automotriz coreana Kia prevé elevar 40% producción en México — El Economista
Horacio Chavez, Director General of KIA in Mexico, expects a 40% increase in production this year, reaching 314,000 cars. KIA’s optimism is due to “the confidence that everything will go well with NAFTA”, referring to the treaty’s recent renegotiations. While the US is KIA’s largest exporter to Mexico, the country to the south has been finding new locations for production.

Japan-LAC

Japón nombra nuevos embajadores en Perú, Uruguay y Nicaragua — W Radio
Japón nombró a nuevo embajador para el Perú — Radio Nacional
Yasuhisa Suzuki, nuevo embajador de Japón en Nicaragua — Confidencial
Novo embaixador do Japão no Brazil visita Maringá nesta sexta — O Diário
Last week the Japanese government announced new ambassadors for Peru, Uruguay, and Nicaragua. This follows on the recent arrival of a new ambassador in Brazil. These representatives are hitting the ground running, with Yasuhisa Suzuki highlighting his country’s commitment to Nicaragua through public works projects sponsored Japan International Cooperation Agency (JICA), and Ambassador Akira Yamada will be making a trip to Maringá, in Brazil's Paraná state.

India-LAC

Chilean lawmakers to visit India next week — The Santiago Times
Chile parliamentarians to visit India, focus on astronomy, women’s issues, tech — Financial Express
Seven Chilean parliamentarians will be visiting India next week, with a focus on trade and investment, astronomy, women’s issues and technology. The trip comes ahead of an India-LAC Conclave that is supposed to happen this June or July in Santiago.

ASEAN & Oceania-LAC

Australia's QBE sees record $1.2 bln loss on catastrophes — Reuters
QBE enlists adviser for potential sale of Latin America operations — The Australian
Australia’s biggest insurer QBE Insurance Group reported an annual loss of $1.2b (USD), thanks to payouts around massive California wildfires, storms in Australia and Hurricane Maria. As a result, it is putting it’s Latin America operations on the auction block.

GCC-LAC

Grandes petroleras participarán en licitación campos en aguas profundas México — Reuters MX
Qatar makes foray into Mexican oil, wins 4 blocks — Financial Times
Qatar Petroleum, the world’s largest producer of liquefied natural gas, took 4 fields together with Shell this week in an auction for crude fields in the deep waters of the Gulf of Mexico. This is Qatar Petroleum’s first investment in Latin America.

Emirates to fly to Santiago via Brazil — Gulf News
Emirates airlines is (almost literally) doubling down on its South America bet. Starting in July, it will add another five flights to its current daily schedule from Dubai to São Paulo. Those additional flights will connect onward to Santiago in Chile.

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