What Do 130 Million Chinese Tourists Mean for LAC?

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Between 2005 and 2017, the number of Chinese tourists taking international trips jumped from 31 million to 122 million.  Emblematic of the country's rapid economic ascension and growing middle class, Chinese tourists are reshaping the landscape of global tourism.
 
Like the expansion of commercial interests in the region, growing Chinese tourism in Latin America is a priority for Beijing. This week Cheng Hong (拉丁美洲:世界旅游的新兴力量), EVP of the World Tourism City Federation (full presentation here: 2018世界旅游城市联合会拉丁美洲旅游会议在波哥大举行) said that the Belt & Road Initiative is an opportunity to increase the tourism profile of Latin America in China.
 
This echoes the 2017 Policy Paper on Latin America and the Caribbean, which singles out Tourism Cooperation as one of the points of focus for engagement, stating: 

China will encourage tourism authorities and enterprises on both sides to introduce tourism resources and products to each other and expand tourism cooperation. China will explore and issue more facilitation policies to promote two-way tourism and support the negotiation for more direct flights between aviation authorities of the two sides. China will strengthen dialogue and cooperation with consumer protection departments of Latin American and Caribbean countries, with priority given to the protection of consumer rights of international travelers.

 
That’s not only a significant number of tourists, that’s also a significant amount of money - those tourists spent $261b. And that money is not just big in aggregate, it’s also big compared to other countries: travelers from the US, the second outbound tourist market according to the UNWTO, spent $122b, or less than half. 
 
Countries across Latin America have taken notice and made considerable efforts to engage with the opportunity. In 2016 Colombia, through ProColombia, opened an official WeChat account to promote the country's tourism sector; in late 2017 Promperu launched a Chinese language website with the goal of increasing tourism; last month Argentina's Nacional de Promoción Turística (Inprotur) partnered with Alibaba's Fliggy; and in a rare show of solidarity, Argentina and Brazil have banded together to promote Iguazu Falls during a roadshow in China this May. Just this week, ITB China, one of the largest industry gatherings, noted “a rising interest in China on both American continents” demonstrated by Argentina, Brazil, Chile, Colombia, Dominican Republic, Mexico, Panama, and Peru attending for the first time.
 
And this is to say nothing of the large Caribbean projects we have talked about. While Bahamar was developed with the U.S. and European population in mind, future projects like the Pearl of the Caribbean in St. Lucia, may end up being a true barometer of Chinese tourism in the region.
 
Stumbling blocks like distance, connectivity, and language are omnipresent. Currently, the only non-stop flight between China and Latin America is the newly establish Hainan Airlines Beijing to Mexico City which stops to refuel in Tijuana (a connection that was strengthened by HNA’s alliance with Interjet). Beyond that, there are a hand full of "direct flights" including the Aeromexico CDMX-Shanghai route with a stop in Tokyo, the China Southern Airlines CDMX-Guangzhou route with a stopover in Vancouver, Canada, the newly established Beijing-Panama City route with a stopover in Houston, and a handful of more established flights between China and Cuba with stopovers in Canada. Nevertheless, flight times that range from a best-case of 14 hours to an average of 28 hours, present a major hurdle that will only be overcome with advances in technology.
 
As Latin America works to court Chinese tourism, understanding consumption trends of the population they're looking to engage is critical. For example a survey conducted by Neilsen shows that that 65% of Chinese tourists paid for travel expenses via mobile payment during their most recent trip, compared to 11% only of non-Chinese counterparts; and 77% of Chinese tourists spent more via mobile payments than they had on previous trips taken over the past two years. Therefore, engagement of platforms like Alipay and WeChat pay are critical components in the overall strategy.
 
At present the number of Chinese tourists to Latin America and the Caribbean remain low — about one percent of that 122 million come to the region. Most Chinese tourists visit destinations in Asia, Europe and North America. But even a small increase of those China tourists to consider Latin America, will have an outsized impact on the sector in the region. Especially for places in the Caribbean that are disproportionately dependent on the sector for their livelihood.

Top Stories

El embajador de China advierte: “Bitran ha convertido el proceso de Tianqi en un asunto político y puede dejar influencias negativas en las relaciones comerciales” — Pulso
Chinese Lithium Acquisition Spree Shifts from Chile to Argentina — PR Newswire
Camus y polémicos dichos de embajador de China: “No hay una política ni prejuicios respecto de ninguna actividad o país” — Pulso
Embajador de China en Chile se mete en polémica por posible ingreso de Tianqi a SQM y pide no politizar el tema — El Mostrador
China warns Chile against blocking $5bn SQM lithium deal – Financial Times
In his first interview in Chilean media, Chinese Ambassador Xu Bu expressed his grievances over former Chilean Public Works Minister Eduardo Bitrán’s criticism of Tianqi’s interest in acquiring part of SQM. Xu says Bitrán “shifted this purely commercial action into a political matter and could leave negative influences on the development of economic and commercial relations between both countries.” In response, Juan Andrés Camus, president of the Santiago stock exchange, tried to appease things by saying: “you need to look at each investment in its own merit.” While in Chile thing remain up in the air, moves are afoot next door in Argentina. China’s Nextview New Energy Lion Hong Kong Ltd. has just snagged an all-cash deal worth $265m for a stake in reserves in Salta. 

Desembarco chino para fabricar buses eléctricos que no contaminan — Clarín
La automotriz china ByD finalmente elige la provincia de Buenos Aires para la fabricación de buses eléctricos — iProfesional
Relatedly, Chinese bus manufacturer BYD (fun fact: stands for 'Build Your Dreams') is investing $75m to build an electric bus manufacturing plant in Buenos Aires Province. Is BYD eye ing Argentina’s lithium reserves?

China Didi Chuxing lanza servicio de transporte en México — Reuters
¡Cuidado, Uber! La china Didi Chuxing arranca prueba piloto en México — CNET
Didi Chuxing has launched ridesharing services in the Mexican city of Toluca, head to head with Uber in its first venture outside of Asia. It plans to expand to the rest of  Mexico this year.

Cómo pueden beneficiarse los países de América Latina de la disputa comercial entre China y Estados Unidos — La Nación
América Latina puede beneficiarse de la disputa comercial entre China y Estados Unidos — La Opinión
País pode fortalecer parcerias com ‘isolacionismo’ dos EUA — Diário Comércio
Latin America and the US-China trade spat – Global Times
Who benefits from the brewing trade war between China and the US? In Latin America, soy and pork meat producers, overall Mexican exports, and potentially the aerospace industry. Professor Fernanda Magnotta at the Fundação Armando Alvares Penteado (FAAP) says that Brazil cannot rely on the US and should take the opportunity to strengthen and expand its commercial relations, noting Mercosur is already in talks with Europe and Canada.

To Professor Lucas Leite, however, improving trade relations only goes so far and Brazil should focus on gaining competitive advantage by reducing bureaucracy, increasing juridic security, and massively investing in infrastructure.

Senado de México ratifica acuerdo comercial con región Asia-Pacífico — Reuters
Mexico's senate ratifies sweeping Asia-Pacific trade deal — Reuters
Mexico’s Senate has ratified the TPP — becoming the first country to do so —  despite opposition from the domestic textile and footwear industries, claiming 250,000 jobs will be lost.

El Ejecutivo busca abrir más mercados para productos agrícolas — MDZ
Argentina’s Ministry of Agroindustry is trying to open the American, Chinese, Japanese, and Mexican markets to its production of meats, lemons, and sorghum — the latter based on increased Chinese demand derived from its squabble with the US.

CHINA-LAC


La automotriz china Baic Prepara 2,000 MDD para su primera planta en México — Expansión
BAIC is close to announcing a $2b investment for the construction of a plant in Mexico, to avoid a 21% tariff on each imported unit. Samuel Echeverría, director of operations for the Picacho group, a BAIC distributer, expects they will be able to reach 4% market share in key segments with a local plant.

中国跨境电商交易今年有望突破9万亿 拉美成最受欢迎新兴市场 — nbd.com.cn
According to the China Institute of International Electronic Commerce’s “World E-Commerce Report 2017” Latin America is the most popular e-commerce emerging market.

'China is just as important to South America as the US’: why Argentina is keen to start talks on free-trade agreement — South China Morning Post
Diego Guelar, Argentina’s ambassador to China, defends the scope of the Asian giant’s ambitions in Latin America, especially as critics question the long term viability and success of its projects: 
“Infrastructure or construction companies in China want to do business in the world, that’s not charity … China is not doing us a favor. It is doing business and they want to do business with us and we are happy with that.”

Los países de la Alianza del Pacífico buscan en China su "gran oportunidad" — La Vanguardia
The Pacific Alliance (Mexico, Colombia, Peru, and Chile) is eager to make China a strong and lasting partner. The bloc’s promotion agencies celebrated the 7th Pacific Alliance Investment Forum in Nanjing this week. “We need to make our countries aware of the great opportunity China gives us in term of market growth,” said José Luis Bernal, Mexican ambassador to China, who also added “we will never see China as a threat” in response to recent rhetoric from the US.

China llama a México a atreverse a cerrar un tratado comercial — Sexenio
China pide negociar un Tratado de Libre  Comercio con México — El Universal
“I don’t understand why Mexico doesn’t propel itself to get a commercial agreement with China,” said Qiu Xiaoqi, Chinese Ambassador to Mexico.

China's Ambassador visits San Fernando — Daily Express
Chinese Ambassador to Trinidad and Tobago, Song Yumin, visited the city of San Fernando to inspect a building planned to be restored, potentially by a Chinese company.

China Comemora Exportação de 197 Milhões de Pneus Em 2017 — Transporte Express
China exported 197 million car tires in 2017, a 9.4% increase from the previous year, worth around $3.1b. We’re rolling in excitement.

China pisa fuerte en Argentina: una empresa oriental vestirá a Lanús — Doble Amarilla
China is trying to reach the hearts of Latin Americans as it focuses on one common passion: soccer. It recently made an agreement with the Argentine Football Association (AFA) for training programs for Chinese youth in Argentina, and, just recently, Chinese sportswear company Peak Sport has announced providing the kit Buenos Aires-based soccer club Lanús.

Cochilco mantiene proyección del precio del cobre de US$3,06 la libra para 2018 — Mundo Marítimo
The Chilean Copper Commission (Cochilco)’s Trends Report on the International Copper Market sees price support and low deficits on stable demand, especially from China — barring any complications risen from international trade and ensuing Chilean and Peruvian contracts.

China sigue siendo el primer destino de vino chilenos — Xinhua
Wines of Chile announced China continues to be its biggest destination, with the $263m in exports over the past 12 months, 30% higher than the previous year.

Agenda entre China y Panamá seguirá acelerándose — Panamá América
Panama isn’t holding back. Panamanian Foreign Affairs Vice-Minister Luis Miguel Hincapié highlighted the results from a FTA viability study that showed both countries could benefit from further cooperation. Minister of Commerce Augusto Arosemena is expected to start negotiations this year.

Detienen en el AICM a ciudadano chino que transportaría 408 buches de totoaba a Corea del Sur — Animal Politico
A Chinese citizen was caught by Mexico’s Federal Police trying to travel to South Korea while carrying 408 dehydrated innards of Totoaba, a drum fish that can fetch $10,000 per kilo in Asia that Mexico, China, and the US agreed to protect last August.

China impulsará en argentina el Corredor Bioceánico Ferroviario NOA – Centro — Segundo Enfoque
China tendría interés en corredor ferroviario bioceánico entre Argentina y Chile —Portal Portuario
Argentine and Chilean provincial representatives and Chinese authorities from the state of Hunan signed a MoU on a bi-oceanic corridor, a project connecting Argentina to ports on the Pacific through Chile. Representatives from the Argentina provinces of  Santa Fe, Córdoba, Entre Ríos, Tucumán, Santiago del Estero, La Rioja, Catamarca and the Chilean region of Atacama signed a deal which would allow China Railway Group Limited (CREC) to build, and coordinate the project’s financing on behalf of China’s Ministry of Commerce and Export-Import Bank of China. Bi-oceanic trains have had trouble elsewhere - will this one gain traction?

中国与拉美国家关系日益紧密 西媒:激发中国人学西语热情 — Cankaoxiaoxi
Next semester, 126 secondary schools in China will start Spanish courses, and it will also begin to be included in middle and primary school course schedules. 

Los autos chinos se imponen en la Argentina: hay 11 marcas activas que ya venden más que las premium — iProfessional
Argentina is already home to 11 Chinese car firms, who collectively increased sales by 90% compared to last year.

China Expands Brazil Frontier as Investment Grows During Crisis — Bloomberg
Brazil is rolling out the red carpet for China, with FDI reaching a 7-year level high at $24.7b last year. Before Lava Jato, China couldn’t compete in the construction and services industries — now, things are different.  China Communications Construction Co. (CCCC) has already begun work on a port in the state of Maranhão for an investment of $520m, and is expected to purchase an infrastructure investment fund to build a second in the state of Santa Catarina. Unclear if this will continue after October’s presidential elections.

Más de 40 fabricantes chinos de mecánica y autopartes en feria — Perú21
A Chinese commercial delegation of 43 auto manufacturers will be joining the 6th International Show of Autoparts, Mechanical Implements and Automotive Service in Peru next month.

Sunday arrival of Galleons Passage in Mexico – T&T Newsday
In the latest installment of what seems like the never-ending voyage of the Galleons, the ship is scheduled to arrive on Mexico’s Pacific port city of Acapulco this Saturday.
 
Guyanese businesses urged to sell more food, tourism to China as exports recover– Demerara Waves
As a Guyanese delegation gears up to attend the inaugural China Import Expo in Shanghai later this year, the country is being encouraged to attract Chinese tourists and sell food into the Chinese market.
 
Chile hails success of Chinese cherry campaign – Fruitnet.com
The Chilean Cherry Committee outlines the success of their recent “Enjoy your red moment” campaign in China. The 2017/18 campaign was extended from 35 to 64 cities.

KOREA-LAC

Vacuna argentina para una emergencia sanitaria en Corea de Sur — Agritotal
The company Biogénesis Bagó, Argentine leader in the manufacturing of vaccines for swine foot-and-mouth disease, has received a temporary license to sell products into South Korea in response to an outbreak there.

Corea del Sur y el BID firman un MOU sobre proyectos energéticos en América Latina — Yonhap News
South Korea and the Inter-American Development Bank (IDB) signed a memorandum of understanding to cooperate in the construction of a more refined energy infrastructure in Latin America and the Caribbean.

Para Corea, un acuerdo con el Mercosur potenciará su relación con Argentina — Télam
Firmas coreanas ya preparan sus inversiones — El Cronista
Lim Ki-mo, South Korean Ambassador to Argentina, expects the conclusion of a trade deal with Mercosur “possibly in May." Bilateral trade between Argentina and Korea peaked at $2.4b in 2012.

“Perú es el ingreso para inversiones de Corea del Sur a Sudamérica” — El Peruano
South Korean Ambassador June-Huck Cho sees a lot of potential for collaboration between his country and Peru on information technology and communications.

JAPAN-LAC

Colombia: Compas Aguadulce concreta embarque récord de carbón destinado a Japón— Portal Portuario
The Compas Aguadulce maritime terminal on Colombia’s pacific coast recorded a record number of 70,684 tonnes of metallurgic coal sent to Japan.

INDIA-LAC

Aeromexico and Jet Airways connect Mexico and India – Traveldailynews.com
Aeromexico and Jet Airways, India’s premier international airline, will enable their codeshare sales today, which will allow passengers to travel to and from both countries by connecting via London to Mexico City, Delhi or Mumbai, as of May 1.
 
Antigua seeks India's assistance in developing health, other sectors  - Jamaica Observer
As part of a visit by an Indian delegation headed by the Minister of State for Consumer Affairs, Food and Public Distribution, C R Chaudhary; Antiguan and Barbuda’s Investment and Trade Minister, Asot Michael, requested that India help the island nation develop a FTZ and train doctors.

GCC-LAC


Masdar and Costa Rican Electricity Institute to Advance Renewable Energy Development — Albawaba
Masdar (the Abu Dhabi Future Energy Company) and the Costa Rican Electricity Institute (ICE) signed a memorandum of understanding to share technical knowledge and project experience on renewable energy development, yielding “a number of promising clean energy opportunities,” said Mohammed Jameel Al Ramahi, CEO of Masdar.

United Arab Emirates, Mexico to increase cooperation in tourism – The Gulf Today
The UAE Ambassador to Mexico Ahmed Hatem Al Menhali on Tuesday met with Mexico's Secretary of Tourism Enrique de la Madrid Cordero to discuss ways enhance relations, namely boosting bilateral tourism between the UAE and Mexico and economic and cultural cooperation. The officials also looked at ways to accelerate plans that will see the opening of a new airline route from Dubai to Mexico City via Barcelona, in addition to proposals on reciprocal visa-free travel for the citizens of both countries.
 
Dubai AI tech firm Flytxt expands in Latin America – GDB Online
Mexico’s America Movil has partnered with Dubai-based Flytxt’s flagship artificial intelligence, analytics and marketing automation product NEON-dX in six markets across Central America to analyse customer data in real-time.

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