In a surprise to no one, the Chinese Communist Party’s Nineteenth National Congress (the 十九大 or “19th Big”) dominated our conversations this week. The policies and people identified at the meeting will likely have the greatest single impact on the bilateral business relationship over the next five years, as China completes its move from a nontraditional partner to the mainstream. Under President Xi, China’s role in the region has grown significantly and headlines following Wednesday's speech has everyone "betting on expansion in Latin America.”
Across sectors and mechanisms, China is moving to increase engagement with Latin America. The Chinese media did a full court press this week of interviews with experts from Peru, Ecuador, Mexico, and Argentina (among others) all highlighting the potential benefits and “shared destiny” of Latin America - Chinese engagement. Xi, in a message ahead of the Zhuhai conference next month, remains bullish:
“At present, the relations between China and Latin America and Caribbean countries are presented with important opportunities and blessed with better conditions and a more solid foundation for further development.
“China always views its relations with Latin America and the Caribbean countries from a strategic and long-term perspective, and is ready to work hand in hand with Latin American and Caribbean countries to promote the comprehensive and cooperative partnership featuring equality, mutual benefit, and common development between the two sides.”
That bullishness is echoed across the Pacific in Chile, where ECLAC held it’s first High-Level Academic Forum between ECLAC and China, along with its annual China-Latin America Think Tank Forum. The great and good thinkers gathered there see the potential for further integration of the two economies, especially in an era "marked by economic and political uncertainties and dire environmental effects worldwide."
The connection between the two will be driven by exports from Latin America to China. And exporters in the region continue to benefit from China running up commodity prices. But some observers are worried that this “Dutch disease” is keeping Latin American dependent on other markets for growth. The World Bank’s chief economist for Latin America Carlos Végh also notes that the limits of Chinese demand have been reached, and that there won’t be as much export growth from the region to the country, and that FDI from China may be less than expected.
But both sides see the other as a potential solution to a need for raw materials (on China’s side) and growth through exports and receiving FDI (on Latin America’s side). With Xi’s standing promise of $250 billion in FDI to the region by 2025, that role will only expand further. With the Belt and Road Initiative already established in Asia, Africa, and Europe, Latin America should be next.
Chinesa Cofco atrasa projeto portuário de US$20 mi no Brasil, dizem fontes — Ultimoinstante
But it’s not all rosy (1): COFCO’s struggles in Brazil continue. The Chinese ag conglomerate is reported to be late on completing a $20m transshipment facility in the souther state of Rio Grande do Sul. This comes after it’s troubles with regional subsidiaries Nidera and Noble Agri.
Montadora chinesa Chery põe à venda metade da operação no Brasil — Globo
But it’s not all rosy (2): Chinese auto company Chery announced on Monday that it is selling 50% of it’s Brazil subsidiary; per reports, it didn’t bother telling the subsidiary. The company’s $400 million factory in São Paulo opened in 2014 was the first to have a complete production line and is the only Chinese auto plant in Brazil. It has struggled with production issues and strikes.
Chile abre en Japón su primera oficina de promoción de inversiones en Asia — Pulso
En el marco de la gira público-privada por la celebración por los 120 años de relaciones diplomáticas: Chile y Japón firman acuerdo de Working Holiday — Direcon
Chile wants investment, as well as trade. Ex-President Eduardo Frei, seeming the country’s resident Asia expert, led a delagation to Japan this week to open Direcon's (Chile’s General Directorate of International Economic Relations) first Asian Investment Promotions Office in Tokyo. The two countries also agreed to a “Working Holiday” deal allowing young adults to travel, work, and study between the two countries.
Israeli business delegation heading to Cuba, with tacit Jerusalem consent — Times of Israel
Cuba and Israel — Two Weeks Notice
Despite the US’s change in tack under the current administration, is Israel warming to Cuba? The Israel-Latin American Chamber of Commerce is sending a delegation to Havana in December with tacit approval from the Israeli government. Fidel Castro broke relations between the two countries years ago, but as GregWeeks puts it, apparently the US’s thaw "inspired Israeli business leaders to push for their own.”
A Amazon chegou. Mas será o fim do mundo? — Brazil Journal
Recado para a Amazon? MELI diz que venda de eletrônicos subiu mais de 50% — Brazil Journal
Amazon landed in the underserved Brazilian online electronics market this week. The Wednesday launch was not without it’s hiccups, and local leader Mercado Libre has fought back with claims that electronics sales are up over 50%. But the fight ain’t over, with other players (including Alibaba?) expected to move in.
Magic Leap Raises $502 Million, Led by Singapore’s Temasek — Bloomberg
Magic Leap’s Series D of $502 million was led by Temasek Holding, Singapore’s state-owned investment company. Brazil-based Grupo Globo and Janus Henderson Investors also participated, along with Alibaba Group Holding Ltd., Fidelity Investments and other existing investors, Magic Leap said in a statement. This brings total funding for the Florida-based startup to more than $1.8 billion.
An interview with President of Panama Juan Carlos Varela — CGTN America
Panamá suspende visas restringidas a ciudadanos chinos — W Radio
Panama to send immigration envoys to China as visa limits lifted — Reuters
Panama and China continue to get to know each other, ahead of President Varela’s trip to China next month. In addition to Varela’s charm offensive with Chinese media, Chinese visitors to Panama will now need an electronic visa stamped in a consulate instead of a restricted visa obtained through a lawyer to visit.
China Development Bank deve apoiar plano recuperação judicial da Oi, dizem fontes — Infomoney
China Development Bank Is Said to Support Oi's Recovery Plan — Bloomberg
Largest creditor CDB has announced that it plans to vote in favor of Oi’s $19 billion bankruptcy plan on Monday. If a restructuring plan doesn’t win approval at the Oct. 23 meeting the company has set Nov. 27 as a back-up date for a second try. Oi has a confidentiality agreement with state-controlled China Telecom to discuss potential deals. The Chinese phone carrier is teaming up with private equity firm TPG on a proposal to acquire Oi, per Bloomberg.
CAF mulls debut Panda trade — Latin Finance
Latin America Development Bank CAF is in talks with investors over a debut Chinese renminbi-denominated "Panda bond" next year, once a change in regulations allows multilateral lenders to issue RMB debt, per CAF CFO Hugo Sarmiento.
China quiere arrebatarle a México el nopal patentando su producción — Televisa News
Nopalito DOC? Researchers at Universidad Autónoma de Chapingo (UACh) raise concern that growers in Japan, Korea, Thailand, and now China are growing their own nopal (prickly pear, if you’ve never been lucky enough to have some), as the taco staple has found new demand in Asia. To protect their product, Mexican growers are agitating for an appellation.
Avanza trámite para que Agucate hass de Colombia llegue a mercado de China — El Heraldo
Chinese commission arrives in Colombia to inspect avocados — Fresh Plaza
As expected, an AQSIQ team was in Colombia this week to check out the country’s avocados and sanitary production system for approval for export to China.
China's leading province wants to partner with Caribbean — Jamaica Observer
During a briefing with journalists from Latin America and the Caribbean ahead of the Party Congress, Guandong's department of commerce deputy director general, Wang Tao, invited countries in Latin America and the Caribbean to join forces in a partnership as it continues to grow. No doubt the Zhuhai Latin America Trade Zone is a key part to Guangdong’s plans.
Caribbean tourism officials urged to target Chinese market — Jamaica Observer
Addressing a session on the “Who are the New Explorers” during the 2017 State of the Tourism Industry Conference in Grenada, Chris Spring of the US-based China Ni Hao marketing company said that the Caribbean’s tourism industry should target China by having websites and other marketing activities to be the Chinese language. He said presently, the Chinese know little or nothing about the Caribbean.
Seminar on doing business in China carded for GEW — Trinidad Guardian
Youth Business of T&T will be holding a seminar on November 15 for Global Entrepreneurship Week (GEW) on "Sourcing from China: What You Must Know to Ensure Success.” Sounds like they’ve been reading the Observer.
Por qué los mexicanos no estamos preparados para comerciar con China — Alto Nivel
Is Mexico really ready to trade with China? An interview with Enrique Dussel of UNAM’s Center of China-Mexico Studies says maybe not. Best quote: “We only think that China is going to pirate our products; let me remind you that just one Chinese company, Huawei, patents more things than all of Latin America.”
Canaco alista viaje a Expo en China; promocionará la zona — Milenio
Twenty five Chapter Presidents from Mexico’s National Chamber of Commerce (Canaco) are headed to the Zhuhai China-Latin America International Expo next month.
Se for eleito, Bolsonaro admite privatizar Petrobras e quer limites à China — Globo
Brazilian Trump Jair Bolsonaro says China “has no heart,” and that he would like to restrict it’s access to what he defines as strategic sectors in Brazil.
China unveils US$15Bn mega bridge — Trinidad Guardian
The Trinidad Guardian tours the 55 kilometer Hong Kong-Zhuhai-Macao Bridge, soon to open, and wonders if PM Rowley would reverse his position and contemplate something similar connection the 30 kilometers between Trinidad and Tobago.
China supera a países de la CAN y es el primer país de donde Bolivia importa — La Razón
China has surpassed the countries of the Andean Community as the largest source of imports to Bolivia, making up 23% of the country’s imports.
En continua expansión, China impacta en el seno del Mercosur — La Nación
Bosom buddies: a write up of a conference in La Plata on how China has impacted Mercosur, going so far as to call the Asia country the sixth member of the trade pact. However, Chinese companies have had difficulty as government-to-government relations have gotten more complex since Dilma [Rouseff, former President of Brazil] and Cristina [Fernández de Kirchner, former President of Argentina] have left the scene.
Actividad académica en la UNLP — Diario Democracia
If you didn’t get enough, the National University of La Plata will be holding it’s second Iberoamerican Day of Chinese Studies October 26th.
A Corea del Sur le gusta la comida colombiana — El Espectador
Since Colombia’s Constitutional Court ordered Colombia to participate in a free trade agreement with South Korea (participation that was only formally ratified earlier this month), non-mineral/energy exports from Colombia have jumped by a third, with prepared foodstuffs up 189%. That’s a lot of bandeja paisa.
Korea’s CJ Entertainment Targets Global Production — Variety
CJ Entertainment is looking to export it’s “Miss Granny” franchise. The comedy-drama has already been remade several times within Asia, and now 3Pas Studio will make a Spanish-language version for the Hispanic market in the US, and potentially for Latin America.
Argentina, Japón y Corea del Sur lideran el crecimiento de exportaciones chilenas este año — Diario Financiero
Chilean exports are up, driven in part by Japan (3rd largest export market) and Korea (6th), whose receipts of (non-copper) exports are up 27% and 15%, respectively. China — Chile’s second largest export market — is taking in 6% more than last year.
Mitsui to build BHP desalination plant in Chile — Reuters
Mitsui plans to build a desalination plant for BHP Billiton Plc’s Spence copper mine in Chile. Mitsui is building the $800 million plant through a joint operation with Técnicas de Desalinazación de Aguas.
Acceso a tecnología debe ser para todos, plantea NEC México — El Universal
The head of the Mexico affiliate of Japanese IT giant NEC, Yukio Hioki, describes his firm as a Mexican company with Japanese technology. This makes it impervious to the uncertainties of NAFTA, and Mexico a key part of it’s “Shared Web” vision that will make access to technology something for everyone.
Japoneses enloquecen por productos chilenos como el vino, carne de cerdo, salmón y choritos — Publimetro Chile
Chile busca fidelizar al consumidor japonés con los vinos y el salmón — Diario Financiero
The Chilean speciality exports juggernaut continues. Not wanting to be left out, ProChile sees the potential in Japan for Chilean wine and salmon. Exports of goods such as wine, pork, salmon and mussels are up 21% over a year ago.
El plan B de México al TLCAN comienza a dar resultados — Expansión
Mexico’s exports to Japan, Brazil, and the EU are up while those to the US are flat, so Mexico’s Plan B in case NAFTA falls apart. Echoes of Jorge Guajardo’s tweet from earlier this week: "I had dinner with 3 Mexican CEOs last night, big companies, all NAFTA poster boys, they all assumed NAFTA was dead, and they were OK.”
Estrechan relaciones bilaterales Embajador de Japón en México y el Gobernador de Guanajuato — Estado de Guanajuato
La industria automotriz de Guanajuato, fortalecida por acuerdo con Japón — El Economista
Guanajuato Governor Miguel Márquez Márquez (PAN) hosted the Japanese Ambassador Yasushi Takase. No doubt the conversation focused on the Japanese Consulate established in León, Guanajuato’s largest city, in January of last year. But we’d bet the new Toyota plant and a deal by Guanajuato with JICA to help meet the demand for qualified employees in the auto sector of the state also took up a good chunk of conversation.
ASEAN & Oceania-LAC
Argentina seeks to boost air connections to China through NZ — Scoop News
Deputy tourism minister Ramiro Alem, on tour through New Zealand, wants to expand Air New Zealand’s minimum three flights a week to Buenos Aires to daily flights to attract China. Said Alem: "The strategic thinking is that Auckland to Buenos Aires is one of the most seasonal routes for Air New Zealand, so the opportunity is Chinese people flying in the low season. There is an opportunity to work together to build that Asian traffic.