Asia-Latin America Round-up — 19 May 2017


Real estate buyers from China, elsewhere in Asia increasingly eye Miami — Miami Herald
An overview of where things stand on Asian investment in South Florida, noting recent transactions. Of interest: While speaking on a panel at the AREAA conference, Greg Owens from Miami International Airport affirmed that MIA is ready and eager to finalize a new route agreement with Hong Kong-based Cathay Pacific, and expects it to happen within 24 months.

U.S. Strikes China Trade Deals but Leaves Major Issues Untouched — NYT
Last week the United States reached a set of trade deals with China covering areas like electronic payment services, beef, and poultry, compromising on some Obama administration stances but leaving untouched bigger issues. Under the newly announced deals, China set a deadline for fulfilling its promises to allow American beef and said it would speed up consideration of pending American applications to offer bioengineered seeds in China. It will also allow foreign-owned firms to provide credit-rating services in China, publish guidelines to let American firms offer electronic payment services there, and issue licenses to two American financial institutions to underwrite bonds. In return, the US sent a sub-cabinet level representative to the Belt and Road Forum.

Trump Administration Notifies Congress of Intent to Launch Nafta Talks — WSJ
USTR Robert Lighthizer informed U.S. lawmakers that the administration intends to launch formal negotiations on overhauling the North American Free Trade Agreement. Talks will start in as soon as 90 days, in line with Trade Promotion Authority rules. Currency, rule of origin issues, Mexican sugar, and Canadian softwood lumber will all be areas of discussion, but exact goals will not be known until 30 days before negotiations begin. The administration expects to end negotiations by the end of the year, ahead of the 2018 Mexican presidential elections.

Gov. Jerry Brown heading to China to talk climate change — Los Angeles Times
The first week of June, the Governor Moonbeam plans to attend an international summit on clean energy in Beijing. The summit brings together cities, states and provinces who have signed an international agreement promoted by Brown to reduce emissions at faster rates than called for under the Paris agreement on global warming.

Intermediário de Temer ofereceu a Joesley cargos no BC, Receita, CVM e Cade — O Globo       
Aécio Neves pediu R$ 2 milhões, diz dono da JBS em delação — Estadão
Leaked recordings are trouble for Michel Temer — The Economist
Wednesday night O Globo reported that Brazilian President Michel Temer had been caught on tape talking two months ago with one of the owners of meatpacking giant JBS about bribing the former house speaker, who is currently in jail on (other) bribery charges. While Temer is unpopular and bribery is not a good look, he has refused to resign and his allies have theoretical control of the Congress. How long they remain his allies remains to be seen.

China-Latin America

When China sneezes, LatAm…. — Bloggings by Boz
April data out of China shows the country’s economic growth slowing down. As our friend James Bosworth notes: 

The last time Latin America had an economic boom, it was partially driven by Chinese demand for local products and Chinese economic growth pushing up commodity prices globally. While China is not to blame for the Western Hemisphere’s current lackluster economic growth, the data coming from China also show that Beijing won’t be coming to rescue Latin America’s economies any time soon.

Caribbean Bank Wants Chinese Money No One Else Will Touch — Bloomberg
British Virgin Islands goes after Chinese money — SupChina
A BVI entity known as the Bank of Asia is looking to cater to offshore Chinese companies locked out of the global banking system following the release of the Panama Papers. The bank is set to open up for a soft launch within Q3 2017. As Bloomberg notes, China and Hong Kong-linked firms “accounted for almost a third of the offshore companies created by Mossack Fonseca,” the law firm whose papers were exposed in the leak.

Uruguay hopes to join China’s B&R initiative — Global Times
An interview with Fernando Lugris, the Uruguayan Ambassador to China, highlights the country’s interest in engaging formally with the Belt and Road Initiative, which so far no Latin American country has done.

Las 16 megaobras que China financiará y desarrollará en la Argentina — Ámbito Financiero
Argentina and China signed a “5 Year Infrastructure Cooperation Plan” last month in Beijing.  The plan, backed by China’s NDRC, calls for rail line rehabilitation, nuclear, solar, wind ,and hydro power plants, and electricity transmission lines. The announcement does not identify how these projects will be financed. 

Unit of China's BYD to invest $100 mln in Argentina — Reuters
Automobile manufacturer CTS Auto, a subsidiary of China's BYD Co Ltd,, plans to invest an initial $100 million to build electric buses in Argentina. The deal came on the heels of President Mauricio Macri’s visit to China.

Chile-China MOU will boost mutual trade — Fruitnet
Chile’s domination of the Chinese fruit market continues. Asoex — Chile’s export association — has signed a Memorandum of Understanding with the China’s Association for the Promotion of Quality and Safety of China’s Consumer Products (CPQS), part of AQSIQ, to increase cooperation on trade between the two countries. The signing ceremony took place during an official tour of President Michelle Bachelet to China and Indonesia. The MOU commits both sides to share information in several areas related to the fruit trade such as quality and safety management systems and quarantine and inspection standards.

China Econ/Policy

Wanda Backs Away From London Project as Deal String Slows — Mingtiandi
Dalian Wanda has let a lock-out period expire on talks to acquire a second site in south-central London next to its One Nine Elms project. Wanda failed to reach agreement to purchase the 10.2 acre project after exclusive talks to acquire the residential site expired without a deal.  Wanda already owns the One Nine Elms mixed-use project directly adjacent, but has struggled to make progress on construction on that project, while slackening demand for homes in the neighborhood has led to a decline in prices in the area.

China Minsheng Buys 80% Stake in SF Bayside Project for Reported $100M — Mingtiandi
A real estate developer controlled by China’s Minsheng Investment Group acquired an 80 percent interest in a fully entitled luxury residential site located two blocks away from the Bay Bridge for approximately $100 million. Minsheng is in a joint venture with a fund controlled by New York-based real estate firm Paramount Group and an affiliate of Chicago-based developer The John Buck Company. The joint venture plans to develop the site into a 21-storey, 120-unit luxury condominium project with a ground-floor restaurant, designed by Skidmore, Owings & Merrill (SOM).

Trade pact dumped by Trump could be revived at Asia-Pacific meeting — Reuters
Zombie TPP stumbles forward — Bloggings boy Boz
Trade ministers will talk on the sidelines of this weekend’s APEC meeting in Hanoi about reviving the TPP without the United States. As Boz says: 

TPP-11 would be an important way for Asian and Latin American economies to integrate with each other and increase trade to new markets. It would be a significant counter-weight to the RCEP agreement being promoted by China. RCEP negotiations are supposed to conclude this year but are being held up by several difficult final pieces including some tough negotiation positions by India.

Trump Trade Reboot Spurs U.S. Push by China’s Sovereign-Wealth Fund — WSJ
China Investment Corp. is opening a New York office on Friday, in a sign that relations across the Pacific may not be as bad as some feared. Some key quotes from the head of CIC:

“There is a potential for Chinese companies to make more investments in the U.S. and vice versa,” said President Tu Guangshao in an interview. “We want to build up mutual trust.”

CIC had avoided a U.S. presence for years, frustrated by the investment environment there. “U.S. regulators have been hard on us,” Mr. Tu said. “We can’t even name one symbolic direct investment in America.”

Mr. Tu said CIC is now casting an eager eye at U.S. projects such as highways, rail lines and high-tech manufacturing plants, looking to generate steady, long-term returns.

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