Panama's Varela begins state visit to China

Up Front

All the action between Asia and Latin America is in China this week, where two events are defining relations - the state visit of Panamanian President Juan Carlos Varela, and the Zhuhai China-Latin America and the Caribbean International Exposition.

The state visit is still ongoing — with Presidents Varela and Xi set to meet on Friday — so we will have more next week. But the opening of the Panamanian embassy in Beijing will be a “decade-long dream come true.” Panama is also looking to significantly increase Chinese investments, which were $250m last year. China is expected to agree to build a rail line between Panama’s capital and Chiriquí, on the border with Costa Rica (which is the other country that recognizes Beijing in Central America). The meetings in Beijing will be followed by a trip to Shanghai, where Varela will open a consulate.

But the trip is seen in bigger than commercial terms, with Panamanian observers noting that it comes at a moment when the global balance of power seems to be tilting away from an inward-looking US towards a surging China.

Another sign of that tilt was seen at the Zhuhai Exposition. It started off with a bang, with RMB3.2b ($482m) in projects signed, and the inauguration of the 244,000 square meter (2.6m SF), RMB2.5b ($378m) China-Latin America Economic & Trade Cooperation Park. Both sides of the conference recognized that e-commerce is going to be the biggest driver of the relationship going forward, being described as the “Digital Silk Road” between the two areas. Mexico sees the need for closer ties, with the National Confederation of Chambers of Commerce (Concanaco) pushing for e-commerce with China as an alternative to an ever-more tenuous NAFTA. Brazilian observers noted that political instability in their country is seen as an obstacle to investment (although as we discuss below, it hasn’t held everything back).

On the sidelines, the Economic Commission for Latin America and the Caribbean (ECLAC) met with Chinese counterparts in order to foster trade and investment with the region. And we were happy to see Welsh teahouses [and the Peninsula Valdés] get the attention they deserve, with MOUs to promote tourism and commercial exchange.

It was also announced that Zhuhai will host next year’s China-LAC Business Summit.

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ASEAN & Oceania-LAC

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