The Chinese Foreign Ministry is flooding the zone in the Caribbean basin this week, consolidating existing relationships - and maybe exploring new ones?
Foreign Minister Wang Yi is visiting Panama this weekend, a quick three months after the two countries established diplomatic relations. The trip is ostensibly to oversee the inauguration of the Chinese embassy in Panama City. But Panama sees the potential for a lot more, with the Minsters of Foreign Affairs, Finance, Commerce and Industry, Defense, and the Maritime and Tourism Authorities expected to meet with Minster Wang after President Juan Carlos Varela. Wang will also visit tourism sites and projects with great potential for participation of Chinese companies with Varela. Varela and representatives from the Ministry for Commerce and Industry (MICI) and Minstry for Agricultural Development (MIDA) will head to China at the end of the year to firm up commercial and export ties.
This follows a visit by State Councillor (and Wang’s predecessor) Yang Jiechi to Jamaica earlier this week. Pushing the vision of the One Belt One Road Initiative, the meetings were light on substantive pronouncements, but no doubt there were discussions related to the concerns some local stakeholders have with the presence of Chinese companies in the country. Going forward, success by Chinese companies will require not only executing on projects, but also engaging in stakeholder outreach; companies like Pan Caribbean Sugar Company (PCSC) have begun to do so, offering Mandarin classes to their local Jamaican staff.
All this action has raised speculation about whether Panama will be the only country in the Western hemisphere to change diplomatic recognition. Currently 11 countries in the hemisphere recognize Taiwan, with the Dominican Republic being the richest and most populous. Bernardo Vega, dominican historian and observer, thinks he sees signs that thinks might change. While his list of indicators belies Taiwanese concerns more than it does mainland Chinese actions, he sees a potential arena for activity at the UN General Assembly later this month. The DR’s efforts to gain a seat on the UN Security Council would benefit from China’s influence on the votes of African and Asian countries. Vega wonders if Santo Domingo wouldn’t be willing to trade recognition for that seat. Later this month Turtle Bay could be the site of new cross-Straits tension.
BRICS: o triunfo da China é a esperança do Brasil — Exame
Anac assina acordo com a China para ampliar serviços aéreos — Portal Brasil
Brasil e China firmam acordo para facilitação de vistos — Ultimoinstante
Sino-Brazil Trade Volume at Canton Fair Expected to Surge after BRICS Summit — Business Insider
RMB round-up: BRICS sets up local currency fund, China’s FX reserves up in August, StanChart adds onshore element to RGI — Global Capital
Further follow-up from Brazil’s participation in the BRICS Summit, and President Michel Temer’s trip to China. The BRICS Development Bank (now officially the New Development Bank or NDB) is considering opening an office in São Paulo. A BRICS Local Currency Bond Fund was established to increase the level of foreign private sector participation in their respective markets. Brazil’s National Civil Aviation Agency (Anac) and the Civil Aviation Administration of China (CAAC) signed an "open skies" agreement between the two countries. Brazil and China also agreed to five year multiple-entry tourists visas to begin October 1st. And Canton Fair, which saw a 41% increase in Brazilian buyers this year, expects the number to surge again this coming year after the BRICS summit.
Los Bulgheroni y BP se unen para conformar la mayor petrolera privada de la Argentina — InfoBAE
Argentina’s Pan American Energy (PAE) and Axion Energy have announced they are going to merge into a new company, Pan American Energy Group (PAEG), which is expected to have annual revenues of $7b. Bridas, which is a joint venture of BP, the Bulgheroni family, and China National Offshore Oil Corporation Limited (CNOOC) will control 50% of the new firm, with BP owning the other 50% outright.
México coopera con Alibaba en comercio electrónico para impulsar desarrollo de pymes — America Economia
ENTREVISTA: Empresas mexicanas accederán a plataforma Alibaba como vínculo con el mercado asiático — Xinhua
Gran demanda en China por productos de México, según alto funcionario mexicano — Xinhua
China y México trabajan para globalizar a Pyme mexicanas — Milenio
Trump may have pushed Mexico into the arms of China's Alibaba — CNBC
Mexican President Enrique Peña Nieto’s visited Alibaba’s headquarters in Hangzhou. EPN signed an MOU with the Chinese internet giant to ease access for Mexican small- and medium-sized enterprises to the platform. Promexico director Paulo Carreño King sees the potential of the platform for the 5 million SMEs that make up 97% of Mexican businesses. Ambassador Qiu Xiaoqi wrote an op-ed talking about the potential of the deal for Mexican SMEs. And CNBC catches on that Mexico’s interest in other markets is driven by Trump’s interest in messing with Mexico.
"There have been a lot more dollar issuers from LatAm coming to Hong Kong and Singapore to market their deals," said Ben Yuen, chief fixed-income investment officer at BOCHK Asset Management, a unit of Bank of China Ltd. "Chinese banks and private banking clients are getting very interested in buying these names" given the premiums offered and the overall economic recovery in emerging markets.
The Mexico City Airport Trust was in Asia this week book-building for a dollar debt issuance. Investors such as DeepBlue Global Investment, Fuh-Hwa Investment Trust, BOCHK Asset Management, China Merchants Securities Investment Management are all increasing their fixed-income exposure to Latin America.
Brazil’s Embraer plans to produce commercial aircraft in China — Macauhub
Embraer Mulls China Return With Factory for Passenger Jets — Bloomberg
Embraer CEO Paulo Cesar de Souza e Silva says that the company is considering a commercial-aircraft factory in China in two years, based on the success of the low-cost E195-E2 jet, expected to launch in 2019. This would be Embraer’s first overseas factory for a full-size jetliner; a troubled executive jet joint-venture plant in Harbin was slated to be phased out a year ago.
Fosun compra 70% da Guide e avalia corretora em R$ 414 milhões — Brazil Journal
Chinese conglomerate Fosun bought 70% of Brazilian boutique brokerage Guide Investimentos from Banco Indusval for R$ 290m ($92.75m). The deal valued Guide at R$414m ($132m); this follows rumors in July that Fosun was looking to buy a stake at a valuation of R$500m ($160m). 20% of Guide remains in Indusval’s hands, with the remaining 10% owned by Guide management.
China investiu R$ 60 bilhões na compra de empresas no Brasil — Veja
China já investiu R$ 60 bilhões na compra de empresas no Brasil desde 2015 — Istoé Independente
3 out of every 10 reais invested in Brazil from outside in the past three years has come from China, totaling R$60b ($19b). Bank analysts expect that flow to only increase. While energy has been the main source of investment (97% of Chinese FDI in Brazil in the first half of 2017, per AT Kearny), analysts see potential for further investment in infrastructure, which has shown down in recent years.
Brasil recebe com otimismo plano da China de usar mais etanol — Bem Paraná
China this week announced that it would push for use of E10 gasoline (that is, retail gasoline that is up to 10% ethanol) across the country by 2020. This announcement has been very well received by Brazil’s Sugarcane Industry Union (Unica).
Lácteos, oportunidad de negocio en China — El Siglo de Torreón
Mexico’s Secretariat of Agriculture (Sagarpa) talks to Torreón, Coahuila, about how there are plenty of opportunities for dairy farmers from the La Laguna region in the Chinese market. Currently three dairies in Mexico can export product to China, but dairies that register with the Federal Commission for the Protection against Sanitary Risk (Cofepris), can get approved quickly by the Chinese authorities.
ENTREVISTA: China puede encontrar enormes atractivos en Zonas Económicas Especiales de México, según el Gobierno — Xinhua
Another interview with Carreño King extolling the virtues of Special Economic Zones of the type China has developed, and their potential for Mexico.
Venezuela's Maduro says will shun U.S. dollar in favor of yuan, others — Reuters
Venezuela publishes oil prices in Chinese currency for first time — Reuters
Make-work for our friends who cover Venezuela.
China's Goldwind seals first deal in 450MW Argentina push — Recharge
China’s energy push in Argentina continues.
China and Brazil should focus on economic synergy — Global Times
Echoing Xinhua’s headline about Mexico last week, Global Times interviews Carlos Eduardo Abijaodi of Brazil’s National Confederation of Industry (CNI). He sees potential for further investment from China in energy & transmission, as well as transportation and logistics with a focus on Brazil’s agriculture exports.
Chilean officials pushing salmon, squid, mussels on China road trip — Seafood Source
A high-profile Chilean delegation led by the Agriculture Minister Claudio Ternicier and Trade Minister Alejandro Buvinic is visiting six cities, including Beijing, Chengdu, Wuhan, and Hong Kong in an effort to engage local chefs and buyers on the merits of Chilean produce. With the Mandarin slogan “zhi wei zhen cang” (‘Enjoy Delicacies from the Far Ends of the Earth’), the campaign stresses Chile’s “pristine” Pacific waters and the freshness of its seafood.
Chilean Walnut Industry Aims to Crack Open Chinese Market — China Fresh Fruit and Produce News
A report from last month’s China International Tree Nuts Conference:
While the volumes reaching China remain relatively low at present, the industry is very optimistic about increasing the demand in the near future, and the half-year figures up to June 2017 already show an 86% increase over those from the previous year. Chilean in-shell walnuts were first granted permission to enter China in 2016, and the free trade agreement between the two countries means that the walnuts can reach China with zero tariffs.
La maca peruana, alimento milenario en crisis por apropiación china — Tiempo
The problem with success - reports are that Chinese tourists are coming into Peru to take out the “super fruit” maca, which it is illegal to export the fresh fruit or seeds of.
Brasil, Perú y Chile experimentan un auge del turismo chino — Portal del Turismo
According to the Chinese firm Ctrip, Chinese tourists can’t get enough of Brazil, Peru, and Chile. They don’t provide numbers, but say that Chinese tourists signed up for their Latin America and South America-Antartica trips are twice what they were last year.
Chile y China ya tienen fecha para firmar el TLC — Noticias Logística y Transporte
Put it in the calendar - Chile and China plan to sign their expanded Free Trade Agreement around the APEC Leader’s Meeting in Danang, Vietnam, the 11-12th of November.
México-China, socios estratégicos del siglo XXI — El Universal
Viable un Acuerdo de Asociación Económica con China, ante incertidumbre por la renegociación del TLCAN — Senado de la República, México
Op-eds by Jorge Nuño Jiménez of the Center for the Economic and Social Studies of the Third World, and the Mexican Senate, in which they say China could be a potential Plan B in case NAFTA falls apart.
Academia busca diálogo propositivo México-China: Dussel — El Economista
“México no se ha tomado en serio la relación con China” — El Economista
Enrique Dussel Peters of UNAM’s China-Mexico Study Center rains on the parade, and says Mexico isn’t taking it’s relationship with China seriously. He says that institutionally and from a private-sector perspective, Mexico is not investing in tourism and exports now in a way that will pay off in the bilateral relationship in 5-10 years. He says that without follow through raising expectations that “the microenterprises that can’t export from Toluca to Mexico City will export to Shanghai [is damaging]. This isn’t serious, and can generate unrealistic expectations.
Will Infrastructure Investments Pay Off in Bolivia? — Latin America Advisor
A colloquium on Chinese investment in Bolivia. Our friend Iván Rebolledo at TerraNova Strategic Partners notes:
"Over the past few years, China has pledged a $10 billion line of credit for government projects, which included nine major roads; the creation of a massive hydroelectric plant; the expansion of the Santa Cruz international airport; and the construction and expansion of the El Mutún steel plant. The issue to consider in this relationship is the exposure it brings to the country through increased indebtedness with China and reliance on foreign capital that serves its creditor’s excessive extraction resources needs.”
Chinese doing well in Barbados — Caribbean Life
Ambassador Wang Ke is stepping down as Chinese Ambassador to Barbados, and notes that China is now the island nation’s fourth largest trading partner. However, as with other cases in the Caribbean, the relationship has received criticism from politicians, including MP and Opposition spokesman on tourism, Ronald Toppin.
Associação do Brasil contrata advogados para enfrentar disputa sobre frango contra China — G1
It’s not all smiles between China and Brazil, as the Chinese government is investigating whether Brazilian exporters are dumping chicken on the Chinese market. The Brazilian Animal Protein Association (ABPA) has hired the law firms MPA Trade Law (Brazil) and HighLand (China) to fight the charges.
Importações de aço chinês na América Latina crescem 11% entre janeiro e julho — Jornal Floripa
In the seven month ending in July, Latin America imported 11% more Chinese steel this year than it did last year, according to The Latin American Steel Organization (Alacero). While Brazil increased it’s purchases, imports by Cuba (-49%) and Venezuela (-44%) plummeted).
China ya compra la mitad de carne que exporta Argentina — Primera Edición
China bought 43,826 tons of beef from Argentina in the first seven months of the year, which represents 44% of the country’s exports. That’s an increase of 60% over the same period last year.
Asia Fruit Logistica 2017: Super Foods Peru concretan negocios por US$ 138 millones — Gestión
Peruvian companies inked $138m in business at last week’s Asia Fruit Logistica event.
Feature: Mexico eyes Asian product supplies, but not much on horizon — Platts
With the shut down of imports and production due to Hurricane Harvey in the Gulf of Mexico, Pemex has looked to Asia for the country’s needed imports of gasoline and products, but distance and a tight Asia market have limited opportunities.
Inauguran en Iquitos Proyecto de Cooperación Perú-Corea — Diario la Region
The Korean and Peruvian governments have sponsored a telemedicine cooperation project connecting four rural health centers with the Regional Hospital in Iquitos. The program is based on a pilot project launched last year in Lima.
Exportaciones a Corea del Sur pueden crecer hasta 100% con el TLC — El Heraldo
Korea Trade-Investment Promotion Agency (KOTRA) expects the Central America-Korea FTA to double Honduras’ exports to Korea from the current $45m annually. The FTA is expected to be signed in October.
Brazil gains improved apple market access to India — Fresh Fruit Portal
A protocol announced by the Indian government will allow Brazilian apples to be exported to India. The new protocol allows for cold treatment pre-shipment and in transit for up to 40 days. This will allow Brazil to increase it’s exports to India, which last year totaled a cool $253,575.
ASEAN & Oceania
Buscan fortalecer relación comercial entre México y Vietnam — El Occidental
At a meeting in Guadalajara,President of the Western branch of the Mexican Business Council of Foreign Trade (COMCE) Miguel Ángel Landeros Volquarts and Ambassador Le Linh La said that Proméxico is looking to open an office in Vietnam. They also noted a recent agreement with a Mexican producer to export chicken feet to Vietnam.
ARGENTINA: Trade With Australia Grows 29% In The First Half Of 2017 — ForexTV
The success was noted at a meeting between Argentina’s Undersecretary for Foreign Affairs, Gustavo Zlauvinen, and by the deputy secretary of the Department of Foreign Affairs and Trade of Australia, Penny Williams. Trade was driven by mining, agriculture, livestock, and fisheries, under an MOU signed in 2015. The two countries explored cooperation on nuclear, space, Antarctica, gender equality, fiscal, sports, and education issues.
Australian government signs technology and science agreement with Brazil — ZDNet
Australian and Brazilian governments have signed an agreement that will enable researchers from both countries to collaborate more closely on technology, innovation, and science projects.
Mexico seeks to bolster ties with UAE, attract investment — Gulf News
Francisca Elizabeth Mendez Escobar, the Mexican Ambassador to the United Arab Emirates in an interview pushes for investment in the Mexican energy sector. Pemex signed an MOU last year with Mubadala Petroleum, and is the Ambassador says the Mexican state-owned firm is in talks with Abu Dhabi National Oil Company (Adnoc).
Op Ed: The growing importance of UAE food security — The National
In an argument for diversifying the UAE's food sources by Tariq Al Wahedi, CEO of food and beverage conglomerate Agthia Group notes that Mexico is looking to quadruple exports of halal beef to the Middle East by the end of 2018.