Latin America papers over trade differences in Santiago

Up Front

Headlines this week predictably focused on the second China-ECLAC Ministerial Forum, and Chinese Foreign Minister Wang Yi’s message that his country wants to invite Latin American and Caribbean countries to join the Belt and Road Initiative. But while the headlines would indicate that Latin America has solved it’s “China Strategy” problem — by signing up with China, Inc. — what the great and good say in Santiago, doesn’t necessarily match up with what they’re doing at home. Latin America’s China Strategy remains as fragmented as ever, and the seams are showing.

One fault line runs right through Mercosur. On the tail end of his trip to South America, Minister Wang stopped in Montevideo, where President Tabaré Vázquez and his team continued their "flirting" with China to sign a deal without Brazil or Argentina. Brazil, traditionally leery of Free Trade deals — its scaled down proposals were one of the reefs that sunk the Free Trade Area of the Americas over a decade ago — has held back Mercosur FTA discussions with China. So the big question remains — is Uruguay going to pursue an FTA with China inside or outside of Mercosur?

The other contradiction in Latin America’s China Strategy will appear in Santiago in early March. This week Japan announced that the 11 remaining members of the Trans-Pacific Partnership — including Chile, Mexico, and Peru — have ironed out their differences and will sign the agreement in Chile in two month’s time (Colombia wasn’t able to join in the initial TPP discussion, but has wanted to join it’s Pacific Alliance partners in the club ASAP). This boon for cross-Pacific free trade is as sensitive an issue for China-Latin America bilateral relations, as the TPP was seen as a counter-balance and effort to contain China’s rise. Will the Pacific Pumas — Mexico in particular — be able to square the proposed China-ECLAC FTA with the TPP?

While Latin America showed a united front at the China-ECLAC Forum this week, but the region remains far from united on how to engage with China.

Top Stories

中拉将共建跨太平洋新丝路 — Sina
Construyendo la comunidad China-América Latina y el Caribe — El Tiempo
China-LAC relations ride rising trade wave — Global Times
Chile praises China's 'constructive role' at Latin American forum — Reuters
智利外长:现在是“一带一路”来拉美的最佳时机 — Xinhua
Juntos Podemos llegar Mas Lejos — El Peruano
China se acerca a América Latina — El Litoral
Explorando nuevos espacios de cooperación entre América Latina y el Caribe y China — La Prensa Gráfica
China-LAC relations ride rising trade wave — Global Times
Juntos Podemos llegar Mas Lejos — El Peruano
China se acerca a América Latina — El Litoral
Explorando nuevos espacios de cooperación entre América Latina y el Caribe y China — La Prensa Gráfica
习近平致中国-拉美和加勒比国家共同体论坛第二届部长级会议的贺信(全文)— Government of the People’s Republic of China
La cooperación entre América Latina, el Caribe y China — El Universal
Chile da bienvenida a China a cumbre regional y elogia "papel constructivo”— Swissinfo
El encuentro bilateral entre los cancilleres de Chile y China — Cooperativa
La Celac y China buscan ahondar lazos en Chile — Cronista
Why China and Latin America are discussing trade now — Al Jazeera
China potenciará influencia en América Latina — El Comercio
Con financiamiento y apertura comercial, China potenciará influencia en América Latina — Ambito
Qué dejó el Foro Ministerial China-Celac celebrado en Chile — Infobae
Cooperación entre China y América Latina no es un desafío para nadie, asegura vocera — Xinhua
As you may have heard, Chile hosted the second China-ECLAC Ministers Forum this week, where Chinese Foreign Minister Wang Yi met with his counterparts from around Latin America and the Caribbean. On the agenda was the China-ECLAC Free Trade Zone proposed by Uruguayan President Tabaré Vázquez — although as our friend Margaret Myers says:

“It’s difficult to imagine how China would achieve a trade agreement at the regional or subregional level, when it’s tried without success on many occasions.”

Other issues of discussion included ‘what to do about Maduro’s Venezuela?’ and ‘what to do about Trump’s America?’

Interview: UN official urges LatAm to make most of China's Belt and Road Initiative — Xinhua
Belt and Road high on CELAC meeting agenda —Global Times
Chinese FM calls for building China-LAC inter-connectivity on Belt and Road — Xinhuanet
China invites Latin America to take part in One Belt, One Road — Reuters
Spotlight: How Latin America fits into China's B&R Initiative — Xinhuanet
Also on the agenda in Chile was Latin American engagement with the Belt and Road Initiative. Minster Wang sees the invitation to work on BRI as “win-win” for both sides.

Uruguay y China firmarán acuerdo para extender las visas de negocios — El Observador
Visita de canciller chino a Uruguay tiene importancia “pragmática" - Xinhuanet
Una visita que abre expectativas para avanzar en un acuerdo con China — La República
Uruguay coquetea con China para firmar acuerdo comercial sin Brasil ni Argentina — BAE Negocios
Uruguay volverá a impulsar TLC Mercosur-China — Swiss Info
On the tail of his visit to the ECLAC Forum, FM Wang swung by Uruguay, where they agreed to grant multiple-entry visas to businesspeople from each other’s country. Wang's trip was played up by Uruguay as showing the symbolic and pragmatic importance of the bilateral relationship, or “showing the consideration this country has for us” per Foreign Minister Rodolfo Nin Novoa. 

冲出亚洲,走向拉美 — Lieyun
Magma Partners lanza aceleradora para startups de América Latina y China — Economía y Negocios
36Kr, headed by Chinese entrepreneur Lui Cheng-Cheng has joined with Magma Partners to launch the Sino-Latin America Accelerator, an effort to encourage Chinese investment in the region. Says Magma partner Nathan Lustig: 

“In addition to helping Chinese entrepreneurs access the Latin American market, there is an opportunity to go back and help regional entrepreneurs, specially from Chile, Colombia, Mexico, and Argentina, to do business with China."

TPP Members strike agreement on blockbuster Asia trade deal — Financial Times
Japón quiere firmar el TPP-11 el proximo marzo en Chile — Opportimes
Los once restantes del TPP buscan en Tokio consenso para la firma del acuerdo — W Radio
Japón dice que se firmará acuerdo comercial transpacífico en marzo en Chile, sin EEUU — Reuters
Japón confirma que nuevo TPP se firmará en Chile en marzo, sin participación de EEUU — Diario Financiero
Pacific Nations Agree to Save TPP Trade Pact After Trump Quit — Bloomberg Politics
The renewed TPP is to be launched in Chile in March; Japan continues to be the driving force behind the renewed TPP.

China's ride-hailing giant DiDi pledges to think big in Brazil — Xinhua
Is Didi exporting it’s Mexico model to Brazil? Following it’s acquisition of 99, Didi plans to expand in South America’s largest country. While it isn’t sending out hiring notices yet, Didi does have big plans for 99 — they are: “going to do bigger things together," according to DiDi's founder and CEO Cheng Wei. More interesting is the view from the competition —  namely the head of Cabify in Brazil, Daniel Bedoya:

”99’s acquisition by a Chinese company breaks Uber's (market) dominance. It represents a consolidation of the sector, providing a more equitable atmosphere for competition and more options for clients."

La creciente influencia de China en la economía de América Latina — El Observador
Trump retrocede, y China avanza en América Latina — El Nuevo Herald
ESPECIAL: Un año de Trump con mal sabor para América Latina — Xinhua
Another round of chin-stroking on the opportunity the current US administration is giving China in Latin America. The Miami Herald’s Andrés Oppenheimer demonizes US President Donald Trump’s protectionism and puts focus on new Latin America shift towards China. More notably, Xinhua says Trump’s protectionism and anti-immigration stances are counterintuitive, and that current US relations with Latin America may deteriorate at this rate.

外交部:中国对拉美政策不针对任何第三方 — Xinhua
China-Latin America cooperation not a challenge to anyone: FM spokesperson — Xinhua
Reading the same articles we do, the Chinese Foreign Ministry says that China’s policy toward Latin America is not targeted at any third party and does not intend to challenge or replace who dominates.  Says a spokeswoman:

"The development of China-Latin America ties does not aim, reject or affect the two sides' relations with other countries."


Panamá y China definirán áreas de acción para iniciativa de Franja y Ruta — Xinhua
China reconoce rol "estratégico" de Panamá en su penetración a América Latina — W Radio
Relaciones entre Panamá y China avanzan de forma satisfactoria — La Prensa
In other Belt and Road news: Following a meeting between Sub-Director of the influential National Development and Reform Commission (NDRC) Wang Xiaotao and vice-Foreign Minister Luis Miguel Hincapié, Panama is sending a technical team to China to discuss potential areas of collaboration in the Belt and Road Initiative framework. Separately, Chinese Ambassador Wei Qiang affirms China’s recognition of Panama’s strategic role as Sino-American cooperation increases, and expresses China’s desire to support Panama in developing its infrastructure, commerce, and logistics.

China investment in Brazil hit seven-year high in 2017 — Reuters
Investimento da China no Brasil em 2017 atingiu máxima de 7 anos — Globo
China invested $20.9 billion in Brazil in 2017 — the most since 2010 — and that’s even without counting last month’s acquisition of 99 by Didi Chuxing. China State Power Investment Corp (SPIC’s) $2.25b deal for the São Simão hydro plant was the largest deal. This October’s election is not expected to discourage interest, according to Jorge Arbache, vice planning minister for international affairs:

“When we talk to the Chinese about it being an election year, a year with a strong political component, the Chinese show each time that they have a longer-term vision for Brazil. It’s unlikely they’ll reduce their presence.”

ENFOQUE DE CHINA: Plan chino, asidero de la cooperación económica entre China y América Latina — Xinhua
Chinese officials see the potential for the Asian Infrastructure Investment Bank (AIIB) to play a role in strengthening China-Latin America cooperation. But our concerns from last week remain unaddressed.

"La Alianza del Pacífico es la apuesta prioritaria del Perú dentro del marco de la integración regional” — Economia y Noticias
Aljovín: Perú y China seguirán profundizando su relación — El Comercio
Peru, China to further strengthen strategic ties — Andina
Comments from new Peruvian Foreign Minister Cayetana Aljovín, in which she reaffirms that the Pacific Alliance remains a priority, and that they will keep pursuing commercial goals with China.

Chinese technology brings falling crime rate to Ecuador — Xinhua
Ecuador is fighting crime using Chinese surveillance technology — SCMP
Ecuador has introduced a security system using monitoring technology from China, including facial recognition. Called ECU911, the system is based on $14m in equipment donated by China to Ecuador in 2016. Deputy Director of the program Sixto Heras claims that it has caused a 24% decline in crime since introduction. State-owned China National Electronics Import and Export Corporation (CEIEC) was involved in setting up the laboratory. CEIEC is a subsidiary of China Electronics Corporation (CEC), one of the China’s largest defense contractors.

Uruguay seeks to boost technology ties with China — Latin America Herald Tribune
Carolina Cosse, Uruguay’s minister of industry, energy and mining will lead a delegation to Shenzhen and Beijing next week to increase cooperation in information and communications technology. They are to meet with companies such as with companies such as Huawei, Tencent, DJI and Baidu.

Chinese truck maker eyes expanding LatAm market — Xinhuanet
Fabricante chino de camiones lanza operación en Panamá como plataforma para América Latina — Xinhua
Chinese truck maker eyes expanding LatAm market — China Go Abroad
Chinese heavy truck producer Shacman participated in this week’s Expo Maquina 2018 in Panama, which they see as a starting point for an ongoing relationship w the region.

Brasil está mais perto de investimento chinês em refino, diz secretário de óleo e gás — Extra Globo
Fernando Coelho Filho, Brazilian Minister of Mines and Energy, met with Chinese energy companies, CNPC, Petrochina, and Sinopec in Beijing to discuss further refinery investments. Following the meeting, Secretary Marcio Felix said “Minister Fernando Coelho Filho’s meeting today in Beijing puts Brazil closer to getting investments from Chinese refineries”.

China is investing seriously in Latin America. Should you worry? — The Washington Post
Stephen Kaplan at the Wilson Center posits that China’s involvement in Latin America as a force for liberal economics, as opposed to seeking to establish geopolitical dominance. Kaplan praises China for balancing its investment risks “by diversifying its investments to include market-based instruments,” but might benefit from looking beyond the flowery words.

Small sugar producers find sweet spot in China after Brazil tariffs — Reuters
China’s May announcement that it is imposing extra tariffs on out-of-quota sugar imports through 2020 has hit Brazil hard - the country exported no sugar to China in December, and overall sugar sales to China are down 60.3%. This is sweet for smaller countries exempt from the tariff, like Nicaragua, El Salvador, and Costa Rica, which all either sold sugar to China for the first time or returned after a long absence.

Importação de soja da China sobe 13,84% em 2017 — Dinheiro Rural
Soy source: Brazil's share of soybean exports to China hits record — Reuters
Chinese imports of soy were up 14% last year, driven by a 33.3% increase in exports from it’s largest supplier — Brazil — which provided 50.9m tons, or 53.3% of total purchases.

Aseguran que el acuerdo con China es una oportunidad para la carne certificada argentina — Infocampo
Guelar afirmo que el acuerdo con China permite a Argentina “ocupar un mercado ávido” — Télam
Embajador argentino en China: “El acuerdo nos habilita a colocar nuestra carne de todas las formas” — Radio Mitre
La industria frigorífica argentina se prepara para desembarcar fuerte en China — Infocielo
Mientras se espera el despegue de la ganadería, los ingresos por los granos seguirían deprimidos — El Día
Argentina remains excited about exporting refrigerated and bone-in beef to China, expecting exports to grow 15% to 35%. And Argentine Ambassador to China Diego Guelar says this is only the beginning:

"We have opened a market for blueberries, peas; we are opening this year cherry and honey; We are generating an opening, we have all the doors open in China to place our products."

Mexican plantain hopes to reach China this year — Fresh Plaza
Mexico’s National Service of Health, Safety and Agri-Food Quality (Senasica) and China’s General Administration of Quality Supervision, Inspection and Quarantine (AQISQ) are working on a phytosanitary protocol for plantains from Colima, Michoacán, Jalisco, Chiapas and Tabasco, and Mexican growers hope to be able to export two million boxes to China this year.

China rushes to replenish gas supplies ahead of icy blast, holiday — Reuters
60 LNG carriers bound for China ahead of public holiday — Interfax
Cold weather ahead of the Chinese New Year have forced China to look for additional sources of Liquid Natural Gas — 60 vessels from sources including from Peru and Trinidad and Tobago.

Chile sigue en conversaciones con China para concretar conexión de fibra óptica transoceánica — Economía y Negocios
Chile continues conversations with China in regards to the development of a transoceanic fiber optic network to facilitate communication between the two nations. “In 5 or 10 years this could be a great development,” added Paulina Nazal, Director General of International Economic Relations.

Perú: Proyecto de Puerto Eten tiene cuatro consorcios extranjeros interesados — Portal Portuario
Peru’s $577m multimodal Puerto Eten project proposal has gotten offers from an American, English, and two Chinese firms.

Antigua Wants China To Partner On State-Funded Projects — The Gleaner
Prime Minister Gaston Browne of Antigua and Barbuda has invited the China Civil Engineering Construction Corporation (CCECC) to invest in projects such as the dredging of St John’s Harbor and the development of a small coastal hotel as “ideal opportunities” for investment.

Government takes ferry delivery February 9 — Newsday
Ferry from China — Trinidad Express
Trinidad and Tobago has purchased a $17.4m ferry from China — built at the Nansha Shipyard in Guangzhou — to ply the Galleons Passage.

China, key partner in Cuba’s tourism development — Brinkwire
China remains a vital investor for Cuba’s tourism sector, with $500m going towards the Bello Monte golf course from Beijing Enterprises.

Perú fue elegido el mejor destino turístico cultural en China — Gestión
Another gong for the Promperú office wall — Peru wins China’s Tourism Media "National Tourism Award" for 2017.


S. Korea seeks to join multilateral development bank in Central America — Yonhap
South Korea is joining the Central American Bank for Economic Integration (CABEI). Seoul will chip in $450m for a 7.6% stake, the second-largest from a non-regional member after Taiwan's 11.62%.

Encuentros con embajadores latinoamericanos I: Costa Rica — KBS
In a series of profiles of Latin American ambassadors, a radio interview with Rodolfo Solano Quirós, Costa Rican Ambassador to South Korea.


Haiti - Japan : $34M donation for the Croix des Missions and the Route Neuve bridges — Haiti Libre
Japan International Cooperation Agency (JIPA) is donating $34m to build the Croix des Missions and Route Neuve bridges connecting Port-au-Prince to the north of the country.

Japón incrementará sus inversiones en México — El Sol del Centro
Prepara Japón inversiones en México — Diario Basta
Estrechan lazos Jalisco y Japón — Debate
Japanese Ambassador to Mexico Yasushi Takase visited Aguascalientes and Jalisco this week to underline continued Japanese interest in investing in the Bajío region’s automotive sector, as well as in renewable energy and pharmaceuticals.

Produtos lácteos Made in Brazil no Japão — Portal Mie
Looking to grow off of last year’s $50,000 in exports, Brazil’s Ministry of Agriculture has established a 4 year contract for the exportation of its dairy products with Japan.


India sees good potential for growth in Mexico — Plastics News
Bilateral trade between Mexico and India has increased, particularly in plastics products having seen a growth of 32.5% every year during the last decade. "We see very good potential for the Indian plastics industry in Mexico," said Indian Ambassador to Mexico, Muktesh K. Pardeshi.

ASEAN & Oceania-LAC

Keppel Corp reports fourth-quarter loss after $619m penalty — Straits Times
Following last month’s Lava Jato penalty announcement for Keppel Offshore & Marine's (Keppel O&M), the parent company’s fourth quarter results were as grim as expected, with 2017 net profit down 72.4%.


Fotowatio closes financing for 342 MW of solar in Mexico — PV Magazine
Saudis Have Their Eyes Set on Latin America in a Big Clean-Energy Push — Bloomberg
The solar unit of Abdul Latif Jameel Energy will build a 342 MW solar farm in San Luis de Potosí. The project will be financed by Germany’s KFW, Bancomext, and ING. Abdul Latif Jameel is already developing renewable energy projects in Uruguay and Chile, and energy unit CEO Roberto de Diego Arozamena is bullish:

“Latin America is an important market, where costs of renewables are declining and governments are giving support. We are eager to grow in the region.”

UAE delegation visits Paraná state — Anba
A delegation led by UAE Ambassador in Brasília Hafsa Al Ulama met with Paraná Governor Beto Richa. Discussion focused around the main tradeables: poultry, sugar, and urea fertilizer.

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