Asia-LAC Business Digest – 26 Oct 2017

Up Front

This past week’s Chinese Communist Party Congress cemented the country's view that it is a global power, and sparked the fear that it will dominate the world, including in Latin America. This is in stark contrast from increased concerns that the US administration is going to tear up NAFTA and further isolate itself from the hemisphere. These two concerns underline the tension that drives strategic thinking in Latin American business.

China sees this interest as an opportunity to strengthen regional interest in its Belt and Road Initiative [aka the Silk Road Project], according to Zhang Run, deputy director general of the Caribbean and Latin America Department of the of the Ministry of Foreign Affairs: “[The] Latin America and the Caribbean region is like an extension of China's Silk Road project, and we are ready… to get more deeply involved."

The recognition of the potential of China is region-wide. ECLAC’s Alicia Bárcena at the close of last week’s Academic Forum on China-LAC talked of the "necessity of working seriously so that Latin America and the Caribbean, along with China, can move forward hand-in-hand.”

Latin American and Caribbean policymakers are taking that opportunity seriously:

Latin Americans are not the only ones looking to rebalance in this new era. Japan is upping it’s game, notes AS/COA’s Eric Farnsworth: "Traditionally, Japan has taken a low-key approach to Latin America... Such an approach may no longer be tenable.”

Even Hugo Chávez’s not-business-friendly guru sees the shift, colorfully lambasting that: “China is going to cyber-communism, the West to neofascism, and Latin America to hell."

Policymakers are beginning to act on the opportunities available in Asia-Latin America relations in the era of Trump. Can business be far behind?

Top Stories

Los once del TPP se reunirán la próxima semana en Japón para su renegociación — El Diario
Relanzarán TPP-11 en reunión de APEC — El Economista
The road to the relaunch of the Trans-Pacific Partnership at APEC in Vietnam next month continues to be surprisingly smooth, with the number of requested changes now down to 50. The 11 member countries hope to get the number of changes to be incorporated to the single digits by next month to facilitate adoption.

China Telecom confirms interest in Brazil's Oi — China Daily
Brazil telecoms regulator rejects Oi's proposed fine-for-investment swap — ET Telecom
Telefónica worried about facing China Telecom in Brazil — BN Americas
China Telecom discovers it’s not easy to get into Brazil. Hopes for an easy solution to the bankruptcy of Oi Telecom (in which it has made an investment) were dashed by regulator Anatel this week. In it's statement, Anatel said the "unsatisfactory" progress of Oi's reorganization raised doubts about the company's ability to honor investment commitments resulting from a fine-for-investment swap. However, incumbents like Telefónica see China Telecom coming.

Embajador chino llega a Panamá — Critica
China presenta embajador en Panamá pensando en inversiones y comercio — El Nuevo Diario
China Already Has Its Ambassador in Panama, after Establishing Diplomatic Tie — Latin America Herald Tribune
Setting the stage for next month’s state visit to China, Panama accepted the credentials of Chinese Ambassador Wei Qiang.

Toyota reducirá planta en México por necesidades de mercado — El Nuevo Herald
Toyota has confirmed it’s scaling back plans for it’s new Guanajuato plant from $1b to $700m. When the plant comes on line, production will be 100,000 a year, half of what was previously planned. Some of the production will move to a US plant, although Toyota says it is not responding to political pressure, but making a market decision.

La pitahaya colombiana se abre paso en Asia — El Espectador
Chinese inspectors visit Ecuadorian dragon fruit farms — Fresh Fruit Portal
News from dragon fruit corner this week has Colombia’s C. I. Dumax Agro - the only exporter of the fruit to Japan and Korea - betting on dehydration to increase exports. Meanwhile, China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) have been in Ecuador this week on a technical visit to inspect dragon fruit farms in anticipation of clearance to export the fruit to China.


María Eugenia Vidal viaja a China en busca de inversiones — Clarín
The Governor of Buenos Aires Province has announced she will visit Beijing, Chengdu, and Hong Kong at the beginning of December to push bonaerense agriculture, infrastructure, and tourism. 

FIESC encerrou nesta quarta-feira (18/10) a missão à China — Portal da Ilha Digital
The Industrial Federation of Santa Caterina (FIESC) wound up a delegation to China last week with a visit to Shenzhen, where they met with Huawei, ZTE, Shekou Terminal, China Merchants, and the Port of Shenzhen.

Argentina pierde posiciones en el comercio de arándanos porque no es competitiva — La Política Online
The Argentine cranberry industry is losing out to Peru, as the latter has access to the Chinese market. The Argentine Cranberry Committee wants to change that: “we support the national policy of openness to the work, and now we should focus on getting cranberries into the Chinese market."

Brasil e China vão ampliar cooperação em pesquisas de bambu — SF Agro
Panda bears rejoice - Brazil’s Agricultural Research Corporation (Embrapa) and the Chinese Academy of Forests are going to strengthen cooperation on bamboo research by increasing the exchange of genetic research material.

ProInversión identifica a 30 potenciales inversionistas globales interesados en APP de Perú — Gestión
Empresas de Japón y Corea del Sur miran con más interés al Tren Macho y el Tren de Cercanías — Gestión
After the roadshows in Mexico, China, Korea, and Japan, Peru’s ProInversión has identified 30 investors for Public-Private Partnerships in the country. In particular, two train projects — the "Tren de Cercanías” connecting the north and south of Lima; and the “Tren Macho” connecting Huancayo and Huancavelica — have garnered interest from the roadshows in Korea and Japan.

Could Mexico Be the Next Panama Canal for Gas? Drillers Think So — Bloomberg
Mexico is exploring the potential to build a pipeline from the shale fracking heartland of Texas to its West coast to provide a quicker trip to South Korea, China, and Japan.

China ranks as world’s most attractive wine market — Shanghai Daily
Chile's CYT to tickle Chinese tastebuds — China Daily
Vina Concha y Toro or CYT, the world's second-largest wine group and Chile's largest wine group, is seeking to expand business in China. This is because “China surpassed the United States to become Chile’s largest export market in 2014, and more than 200 wineries are now exporting products to China,” per Chile’s erstwhile Ambassador.

Group including Chinese firm begins Panama port project — Reuters
A group including China Harbour Engineering Company (CHEC) and Belgian company Jan de Nul has started building a $165 million port in Panama for cruise ships at Perico Island in Panama City.

Palta peruana se convierte en producto estrella en China — El Comercio
According to El Comercio, the latest health fad in Beijing is avocados; Peru is looking to increase it’s 14% share of the market.

México: renegociación de TLCAN debe fortalecer comercio agroalimentario — America Economia
SAGARPA Secretary José Calzada is looking to diversify Mexico’s agriculture away from North America, with China, Japan, and South Korea.

Busca sector lechero en México vender su producto a China — El Sol del Centro
Looking beyond NAFTA, the Mexican dairy industry wants to export to China. 

La biotecnología argentina también se exporta — La Nación
Terragene from Argentina’s Rosario develops chemical and biological cleaners and disinfectants, and  won the first ICBC Foreign Commerce prize for it’s exports to China financed by the bank.

Huawei es la marca con el más alto valor de equipos importados al Perú — Publimetro
Huawei is now the largest importer of equipment to Peru, representing 23% of all imports for the first 9 months of the year, according to customs.

Sinochem chases $4bn stake in Chilean lithium miner SQM — FT
Sinochem denies bidding for US$4b stake in Chilean lithium giant SQM — SCMP
It was a wild 24 hours, with word that Sinochem was looking to take a $4b stake in Chile’s SQM lithium producer, which Sinochem promptly denied.

China, Jamaica partner on 3-year project for sport development — Jamaica Observer
Jamaica's Ministry of Culture, Gender, Entertainment and Sport signed a "Letter of Exchange" with the Embassy of the People's Republic of China for the provision of coaching and sport equipment in six sporting disciplines. A group of about 150 Jamaicans made up of athletes, coaches and officials will visit China for intensive training sessions from January 2018 to December 2020.

Ecuador seeks renegotiation of China oil sales, loans — Reuters
Lenin [Moreno] speaks. Ecuador is seeking to renegotiate oil deals with Chinese firms to get higher prices for its crude exports and reduce the amount it has to send the Asian giant, according to the head of state-owned Petroecuador.

China's Shanghai Electric near deal for Brazil transmission project — NASDAQ
Shanghai Electric Group is looking to take over a  R$3.3b ($1b) power transmission project in Rio Grande do Sul state from Eletrosul. The China-controlled China-Latin America Industrial Fund (CLAI fund) is also expected to take a 25% to 35% stake in the project.

Perú desarrolla una web oficial para el turista chino — Notimerica
Peru: PromPeru launches website to lure Chinese tourists — Andina
PromPeru has launched a website for China tourists with the purpose of expanding its digital marketing strategy across the Asian Giant. 


Korea-LAC Business Summit Kicks Off on October 23 — Business Korea
Korea’s Ministry of Strategy & Finance and the Intern-Maerican Development Bank held the fourth annual Korea-LAC Business Summit. More than 600 South Korean and Latin American government officials, entrepreneurs, and executives representing local financial institutions participated.

Korean Gov’t Increases EDCF’s Syndicate Loan to IDB — Business Korea
On the sidelines of the Korea-LAC Business Summit, the government of Korea agreed to an additional $300m for the Inter-American Development Bank in a syndicated loan from Korea's Economic Development and Cooperation Fund (EDCF). The first syndicated loan was for $100m in 2015.

Eximbank de Corea anuncia apertura de oficina regional en Managua — El 19 Digital
Also on the sidelines of Korea-LAC, Korea’s Export Import Bank (KEXIM)_ announced it is going to open a regional office for Latin America in Managua, Nicaragua.

S. Korea, Central American Countries to Hold Technical Meeting for FTA — KBS
Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama sat down in Seoul this week to review a draft final text of an FTA. The two sides hope to complete the formal signing of the trade deal by the end of this year.

Corea busca un tratado de libre comercio con México — Televisa News
Chun Bee Ho, South Korea’s Ambassador to Mexico, goes on the record that they want to do an FTA.

En Corea del Sur el mango es un fruto de lujo y se paga US$ 9,6 por seis unidades — La Republica
In Korea, Peruvian mangos are going for $10 a half dozen. That’s why Peru exported $213m of them in the year through August.


Fundación Kasuga impulsará vínculos Japón-México — Mundo Ejecutivo
The Kasuga Sakai family of Yakult probiotics fame has launched the Fundación Kasuga dedicated to supporting the health and wellbeing of the Nikkei (Japanese decent) diaspora in the Americas.

IDB approves $150m loan for Ecuador power sector — Clean Technology Business Review
The Inter-American Development Bank (IDB) has approved a $150m loan for Ecuador to help the country expand, strengthen and improve the operational efficiency of its power sector. The Japan International Cooperation Agency (JICA) will provide an additional $70m parallel financing through its Cofinancing for Renewable Energy and Energy Efficiency (CORE) mechanism.

Kitagawa México sigue creciendo en Aguascalientes — Líder Empresarial
Kiatagwa Iron Works has announced that it will build another smelting plant in Aguascalientes beginning next year. The plant is expected to produce 1400 tons of molten iron a month.

Orgullo argentino: La raza Angus se encamina a conquistar nuevos mercados internacionales — Infocielo
Move over Wagyu. The Argentine Angus Association is looking to sell more of it’s beef to Japan through a phytosanitary agreement with the Japanese Embassy to declare areas south of the Rio Colorado free of hoof & mouth by the end of the year.

Así seducirá Chile al consumidor japonés — Vinetur
ProChile has a plan to sell more wine to the Japanese, even as Tokyo signs FTAs with other countries.


India eyes trade deals with Central American, Caribbean countries — Times of India
Not wanting to be left out, India is looking to begin discussions on an FTA with Central America and Caricom. Indian government officials are discussing a plan for Indian logistics centers in Panama in the wake of China’s activity there.

Chile aspira a ampliar acuerdo comercial con la India hasta 7.000 productos — Radio Montecarlo
Chile is looking to expand the Preferential Trade Agreement with India to include up to 7,000 products. Since the initial trade agreement came into force in 2007, Chilean trade to India (ex-copper) has tripled to $178m.


Dubai’s DMCC eyes Latin American expansion — The National
The Dubai Multi Commodities Centre (DMCC) wants to establish a presence in South America, perhaps in Sao Paulo.

UAE, Brazil discuss development of economic relations — Trade Arabia
The Brazilian Ambassador to the UAE, Fernando Luis Lemos Igreja, met with the Ajman Chamber of Commerce. 

UAE Business: Emirates celebrates 10 years of flying to Brazil — GDN Online
In ten years of flights between the UAE and Brazil, Emirates passengers have increased tenfold, benefitting from the addition of flights to Rio de Janeiro, as well as codesharing with GOL.

ASEAN & Oceania-LAC

LATAM's Enrique Cueto makes good on a decades-old vision — Financial Review
A good overview of LATAM’s history reveals that this month LATAM launched the first non-stop flight between Melbourne and South America when it launched its newest route between the Victorian capital and Santiago.

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