In a news cycle dominated by China, it can be easy to miss that Latin America's commercial relationship is growing across all of Asia. As China pauses for the New Year celebration, we're taking the opportunity to highlight the role that the Gulf States that make up the Gulf Cooperation Council (GCC) are playing across Latin America.
Like China, this relationship was in many ways jumpstarted by the 2008 global financial crisis. The disappearance of traditional capital sources in the US and EU sent Latin America not only China but to the Doha, Dubai, Abu Dabi, and Riyhad. In 2010 Abu Dhabi Investment Corporation bought into the Brazil hype with a $1.3 billion investment in then high-flying André Esteves' BTG Pactual. Just over a year later, ADIC's sister fund, Mubadala, got in on the game with a $2 billion investment in Eike Batista's EBX. While ADIC and Mubadala were ultimately left shortchanged by Messrs Esteves and Batista — with only a faded hotel to show for the latter investment — their counterparts at DP World have found success in Peru, Argentina, Brazil, Suriname, and the Dominican Republic.
Recently, we've seen an uptick in activity between the two regions. The UAE has sent several high profile missions to Latin America. In the private sector, Saudi Arabia’s Abdul Latif Jameel Energy has agreed to build a 342 MW solar farm in San Luis de Potosí, and DP World consolidated it’s ownership of Brazilian's private multi-modal port terminal, Embraport, while also breaking ground on a $1 billion port in Ecuador. Elsewhere perennial global private equity player Abraaj Group has looked past recent troubles to buy a stake in Chilean home design and decorator Casaideas for an undisclosed amount and Kuwait stepped in to finance threescore hydropower projects for Havana.
At the end of this month, Dubai will be hosting the second Global Business Forum on Latin America. The gathering aims to bring together regional power players — including man of the hour President Juan Carlos Varela of Panama — to discuss the relationship. This month's Forum indicates that Dubai — and the Gulf more broadly — wants to become a serious player in Latin America. But with China clamoring joining traditional sources of investment looking at Latin America, it’s hard for the Gulf to be heard above all the noise. Latin America has barely enough capacity to handle China’s growing presence, much less also engage productively with investors from the GCC.
Rather than claiming to want to remake the world, and then have surprisingly little to show for it, investors from the Gulf would be wise to focus on areas where they can make the most impact. Where their interests overlap or complement those of Latin America. Food security is an obvious one, where Latin America already provides almost 50% of the meat that the GCC imports, according to the Economist Intelligence Unit. Aviation is another one, with Emirate’s plans to increase flights to São Paulo and onwards to Santiago a good sign.
Overall the goal for the GCC should be diversification of investments away from energy, not doubling down — we’re looking at you, Qatar Petroleum.
Perú y Australia firmaron Tratado de Libre Comercio — RPP
Australia and Peru sign FTA — Fruitnet
Perú accederá a un mercado deUS$ 200,000 mllns. en Australia — El Peruano
Peru opens trade office in Australia — Andina
Seven months in the works, Peru and Australia finally signed their Free Trade Agreement this week. Once ratified, most Australian horticultural exports will be rid of tariffs and in 5 years time, once PAFTA us fully implemented, more than 90% of each country’s exports will be duty free.
Usina a carvão busca crédito na China — Istoé Dinheiro
BNDES’ noble plan to limit coal financing, is opening up room for foreign investment to undercut those goals. After BNDES declared it will be prioritizing alternative energy solutions, Brazil’s Eletrobrás went to China’s Development Bank (CDB) for financing of its coal plant in Rio Grande do Sul. Coincidentally, Eletrobrás gave a R$230m ($80m) sole source contract to Citic Guo Hua International for an overhaul of the plant.
Empresas chinas invertirán u$s 150 millones para parque eólico en Argentina — Cronista
Eólica en Argentina: Empresas chinas invertirán u$s 150 millones para parque eólico en Tres Arroyos — Ev Wind
However there’s better renewables investment news. The Inter-American Bank’s China LAC Cooperation Fund, China Energy Engineering Corporation, and Golden Peaks Capital have agreed to finance $150M for the 100 MV Viento Reta wind farm in Tres Arroyos, Argentina.
拉美外交官驳蒂勒森“中国威胁论”：非常看好与中国合作 — 参考消息 (Cankaoxiaoxi)
拉美缘何不买“门罗主义”的帐 — Xinhua
Economic Watch: Is China's development threatening Latin America? — Xinhua
ESPECIAL: ¿Desarrollo de China "amenaza" a América Latina? — Xinhua
While Trump eyes Latin America with malign neglect, China sees opportunity — The Guardian
Cooperación económica y comercial entre China y América Latina y el Caribe no implica condiciones adicionales — Xinhuanet
China compite con Estados Unidos en América Latina — 14 y Medio
China en América Latina — El Heraldo De México
LatAm in Focus: Latin America Has One Foot in China's Belt and Road — Americas Society / Council of the Americas
¿Desarrollo de China 'amenaza' a América Latina? — La Estrella de Panamá
EEUU y China se enfrentan abiertamente para dominar Latinoamérica — HispanTV
China se aprovecha del desprecio de Trump por América Latina — El Diario
China’s ‘New Silk Roads’ reach Latin America — Asia Times
La China en Latinoamérica — El Heraldo de México
ESPECIAL: China ha sido un socio clave en la mejora de América Latina en buenos y malos tiempos — Xinhuanet
US Secretary of State Rex Tillerson’s remarks, or what Chinese media is calling Tillerson's “threat of China theory” (“中国威胁论”), have spilt a lot of ink. Stanford's Harold Trinkunas and our friend Carnegie-Tsinghua scholar Matt Ferchen argue it is “largely motivated by economic rather than strategic interests,” with China’s “illiberal influence” being exaggerated. In an official response, Chinese spokesperson for the Ministry of Trade, Gao Feng, says Tillerson has got China all wrong, and that they want what’s best for everyone. Ángel Melguizo, head of the OECD’s LAC unit, said “it’s not up to China to respond to all of Latin America’s demands, wishes, and needs” and that a win-win situation can be achieved by establishing trade relations “as a coordinated bloc of countries rather than on a bilateral basis.”
美国与其甩锅不如自省 — People.cn
We don’t want to dwell on Tillerson’s remarks, as we think they will blow over in the short term. But this op-ed from China’s biggest newspaper group, the People's Daily, is insightful into how Tillerson’s remarks have really been received in China. The piece drips with sarcasm as it attempts to provide advice to Tillerson and the US. It criticizes the US for hypocrisy, asking why the US cares so much about Latin America when the US has always considered Latin America “its own backyard” (向来视拉美为自己的战略“后院”). It asks why the US says that China is “a new imperialist power,” smearing China after the U.S has called China an equal “competitor” (一个新帝国主义的典型，竟然给别国扣上“新帝国主义列强”的大帽子，呵呵，我也是醉了！) The piece closes with two traditional pieces of advice for the US to layoff the hypocrisy and treat China with the respect it wants. First from poet Xin Qiji: “青山遮不住，毕竟东流去”(“Blue hills can’t stop water flowing; eastward the river keeps going” — you can’t stop the river); secondly a classic from The Analects of Confucius:
I daily examine myself on three points:
Whether, in transacting business for others, I may have been not faithful;
Whether, in intercourse with friends, I may have been not sincere;
Whether I may have not mastered and practiced the instructions of my teacher.
China becomes largest importer of Peru in 2017 — Xinhuanet
China alaba cooperación con Perú y dice que ambos encaran mismos retos — El Economista
RESUMEN: Perú defiende a China como buen socio comercial ante advertencias de EEUU — Xinhuanet
Perú defiende a China como buen socio comercial ante advertencias de EEUU —Marco Trade News
Latinoamérica y China, un beneficio mutuo alejado del imperialismo y el abuso — La Republica
Following Secretary of State Rex Tillerson’s negative remarks about China in LatAm, Peruvian Minister of Foreign Trade and Tourism, Eduardo Ferreyros, has come out and emphasized China’s satisfactory results as a trading partner. The Minister was also outspoken about increased American investments during Tillerson’s stop in Lima as part of his Latin American tour, saying “Peru is an open economy and has trade relations with most countries and will continue like this”. Other countries have also shown support for China, such as Argentinian ambassador in China, Diego Guelar, noting “we have nothing to fear as long as relations respect sovereignty and have clear advantages for all parties”. China saw a 36% increase in imports from Peru in 2017 — for a total of $11.5b — with fish and minerals cover the bulk of imports. Spokesperson for the Chinese Ministry of Foreign Affairs, Geng Shuang, added “the relationship between China and Peru is a very important part of our relations with Latin America”.
Ofo与膜拜单车准备首度骑进拉美 墨西哥成为第一站 Reuters
Mobike, la gigante china de arriendo de bicicletas está afinando su arribo a Chile — La Republica
Gigante china de arriendo de bicicletas llega a Chile y comenzará a operar en marzo — Play FM
Dockless bike pioneers Ofo and Mobike is expanding their presence in Latin America. Both are set to launch in Mexico. And Mobike is ready to hit Chile in March, with a 15 year contract with the La Reina neighborhood of Santiago.
Magma Partners teams up with Kr Space for first China-Latin America Accelerator — Deal Street Asia
Buscan acercar a emprendedores de Latinoamérica y China — 20 Minutos
Sino-Latin America Accelerator launches to bolster LatAm, China entrepreneurship — The Sociable
Further news on Magma Partners and China's Kr Space's Sino-Latin America Accelerator. They plan to invest in 60 LatAm startup companies over the next 3 years. We wish them happy hunting.
Mexico denies favouring Chinese consortium in bidding for high-speed rail project — South China Morning Post
Videgaray asesoró a empresa china en licitación del tren México-Querétaro, reporta Aristegui Noticias — Animal Politico
The ongoing debacle between China and Mexico over the ill-fated Querétaro High Speed Rail project continues. Mexican Foreign Minister Luis Videgaray has come under heat after allegations that the ministry gave the China Railway Construction Company a helping hand leading up to the contract auction. The foreign ministry denies wrongdoing and claims business was carried “in an open and transparent fashion.”
The Belt and Road Initiative Didn't Quite Live up to its Hype in 2017 — Council on Foreign Relations
The CFR’s Brad Setzer thinks the Belt and Road Initiative (BRI) isn’t living up to the hype, and is just the repackaging of old projects under a new label.
Argentina desafía a EEUU y avanza en relaciones con Rusia y China — HispanTV
China y Rusia podrían ser principales socios económicos de México — Contramuro
Argentinian Ministry of Foreign Affairs has announced “concrete advances” in bilateral trade with Moscow, and Ambassador Guelar has noted the new “multipolar equation” that has erased external imperialist interests. Mexico has also noted a particular increase in Chinese and Russian imports.
Railway project connecting Pacific, Atlantic still on track: Chinese embassy in Brazil — Global Times
The Chinese Embassy in Brasília says we got it all wrong last week, and that the proposed Peru-Brazil Bioceanic Railway is still very much on track.
Costa Rica to deepen links with China — Shanghai Daily
Costa Rica foreign trade Minister Alexander Mora heads on a 3-day visit to China to speak with Chinese custom and trade authorities, e-commerce companies, and attend conferences. Mora wants to propose Costa Rica as a hub for the BRI project in the Caribbean, welcoming firms to settle in the lush country.
El dilema de la huella ambiental — Clarín
An op-ed from Eduardo Trigo of Austral University’s Agribusiness Center arguing that as China takes greater account for it’s environmental footprint, countries such as Argentina can benefit by providing environmentally-friendly meat and produce.
US 6 Billion Dollar Chinese Investment Project….A Game Changer For Jamaica. — Jamaica Information Service
Vice-Governor of Gansu Huang Qiang says that his Province is looking to invest $6b to develop an industrial park in St Elizabeth, Jamaica.
CEO global de Yokogawa visita Chile — Portal Minero
Potencial minero de Chile recibirá inversión de Japón — Minería Sustentable
Takashi Nishijima, CEO of Japanese industrial automatization expert Yokogawa, visited its affiliate in Chile, remarking the country’s mining potential.
Con el ingreso de Didi, la Uber china, en Latinoamérica se acrecienta el comercio de servicios — Marco Trade News
Following Didi’s high profile merger with Brazilian equivalent 99 last month, Didi Chuxing's Vice President Gu Tao has asserted they are now “studying and looking for new local partners in other Latin American markets”. Experts say Didi’s presence in the continent will further promote Sino-Latin American relations and showcase the region’s prowess.
Didi Chuxing took on Uber and won. Now it's taking on the world — WIRED
In a feature edition focused on China’s tech dominance, WIRED’s long read highlights Didi Chuxing, the car-hailing app that has beat Uber in China, and its president Jean Lui. Valued at $56B, delivering roughly twice as many rides as all global sharing apps combined, Didi could soon take over the world (possibly with self driving cars).
Air China seeks approval for Houston-Panama route. — Air Transport World
Air China will apply next month for a Beijing-Panama route (via Houston), helping Panama in it’s argument to be a regional hub.
Interview: Chinese investments could boost Panama's agricultural sector — Xinhua
Esteban Giron, Panama’s Deputy Minister of Agricultural Development, says the country’s bilateral relations with China could be a big help to the agricultural sector due to increasing transfers of technology and capital.
Axios maps out China’s unprecedented export global takeover, which was the size of the Netherlands' only two decades ago.
Cadena china de hoteles de lujo operará hotel en borde costero de Viña del Mar —Biobiochile
Luxury Chinese hotel group Mandarin Oriental sets sail for South America for the first time, investing $70M for the development of a hotel in Chile’s costal resort Viña del Mar.
Para China, 50% del superávit de México con EU — 24 Horas
Simón Levy-Dabbah from Agendasia notes that 50% of the $71.5b trade surplus that Mexico has with the US gets recycled into the trade deficit the country has with China. This will fuel the arguments of those in the US who see NAFTA as zero sum.
Chile pierde participación en mercado del cobre por noveno año consecutivo — La Tercera
Chile’s copper production fell for the ninth year in a row, to Peru’s benefit. Chile has struggled due to a lack of new mines However, Jorge Cantallopts of Chile’s Copper Commission (Cochilco) says Peru’s success will not lead to increased competition with Chile but rather become complementary to its souther neighbor.
Facultad de Economía UNAM anuncia cuarta edición de cátedra México-China — La Jornada
The National Autonomous University of Mexico (UNAM) will be hosting its fourth conference on Mexico-China relations next week. NAFTA renegotiation and trade with China will overshadow the discussion.
Brexit, China and the future of global trade — World Economic Forum
Former Trade Minister of Costa Rica, Anabel Gonzales, tackles a post-Brexit world and the future of international trade. While Brexit, TPP and NAFTA renegotiations shook the world system, regional integration has seen a boom in recent years through diverse PTAs, encompassing almost all corners of the globe. There has been a rise in protectionism in the West, but the rest of the globe is actively increasing interdependency and, hopefully, encouraging others to do the same.
Brasil compensa embargo da Rússia em carne suína com vendas na China e Hong Kong — Info Money
China helps Brazil compensate export losses following Russian embargo on pork meat. Last month alone, China increased imports by 122% and Hong Kong by 23%.
En riesgo venta de Odebrecht a estatal china de hidroeléctrica peruana Chaglla por US$1.400M — América Economía
Last year’s announced $1.4b sale of the Chaglla Hydroelectric plant by Odebrecht to China’s Three Gorges is at risk. The sale agreement expires on February 23, and Peru’s Ministry of Justice still hasn’t signed off. Odebrecht’s creditors are waiting with baited breath.
Comercio electrónico contribuye a cooperación económica sino-latinoamericana — Xinhua
Zhao Ping, director of the international commerce department of the China Council for the Promotion of International Trade (CCPIT), talks about e-commerce as the next step in solidifying China-Latin America relations, in particular in consumer goods.
Latinoamérica importó 7,0 millones de toneladas de acero a China en 2017 — Mundo Marítimo
China exported less steel in 2017 than the previous year, but Latin America imported 7m tones more, 2.4% up, and at a lower price than the rest of the world, at $634 per ton.
Chinese ODI and M&A in Latin America: new features of a current trend — Financier Worldwide
The folks at Financier Worldwide recognize the changes in Chinese interest in LatAm, shifting from predominantly federal extractive ODI’s to including M&A’s in the service sector throughout the continent. As China’s interest exponentially increases, we should see its annual figure of $10B in LatAm investments rise over the next few years.
Japón dona vehículos y equipos a la Defensa Civil de Perú — InfoDefensa
The Japanese government has donated vehicles, materials, and equipment to the Peruvian National Institute of Civil Defense (Indeci), worth around $4.5M.
Visto eletrônico pode atrair 25% mais japoneses ao Brasil — Gazeta do Povo
Brazil’s new e-visa program is expected to increase Japanese tourists to the country by 25%.
Durango fortalece lazos con Japón — Laguna
Durango’s governor, José Rosas Aispuro Torres, met with Japan’s ambassador in Mexico, Yasushi Takase, to welcome investments in the state.
Meiji to support Mexico with white cacao saplings — The Japan News
Japan’s Meiji Holdings Co is sweet on Mexico, saying it will provide Mexican farmers with 10 thousand saplings of rare white cacao in an effort to revitalize the Tapachula region. Supposedly the birthplace of cacao farming, Meiji also opened a 100ha (247 acre) plantation in Tapachula in 2016.
Por estrategia, Argentina reduce frecuencias aéreas a Cancún — SIPSE
Aerolineas Argentinas has announced it will reduce flights to Cancún, as it focuses on increased flights to countries including Korea, China, and Japan. Sorry spring breakers.
Mexico Wants 200,000 Indian Tourists by 2022 — Travel Pulse
The world’s eighth most popular destination wants more visitors: Mexico hopes to attract 200,000 (2 lakh) Indian tourists by 2022, hoping to catch 4% of India’s expected outbound tourism.
Oceania - LAC
These ten Australian tech companies have won places on Latin American accelerator — Anthill
Ten Australian tech companies are in the LatAm Market Entry Acclerator shortlist for 2018. Sponsored by the Australian Department of Foreign Affairs and Trade, the accelerator program provides an opportunity for Australian businesses to reach Latin America, focusing on agricultural, energy, mining, and water technologies.
India wants to collaborate with UAE on exports to 'Africa, Central America and Central Asia' — The National
Are India and the UAE teaming up? Following meetings between Suresh Prabhu, India’s Commerce and Industry minister, with the Abu Dhabi Investment Authority and the Mubadala Development Company, the minister has noted the countries would like to expand their strong bilateral relationship and seek investment in third countries. We’d double check on investing with Brazilian billionaires.