When we talk about trade between Asia and Latin America, the conversation almost always starts with agricultural commodities. China’s agriculture imports have tripled over the last decade, and are now a main driver of many bilateral relationship. Uruguay's exports to China are 70% agriculture, and Argentina’s are over 85% agriculture, and Latin America as a whole is the main source for key foodstuffs like soy (55% of China’s imports) or speciality items like avocados (all of China’s avocado imports last year came from Latin America).
It would seem that agriculture exports from Latin America to China is a fully mature product segment. But there is still a long ways to go in the relationship, as we’ve seen from the moves of Latin American ministers over the past two weeks. Keyed around SIAL China, the country’s largest food fair, Brazilian Agriculture Minister Blairo Maggi, Argentine Agroindustry Minister Luis Miguel Etchevehere, Colombian Agriculture Minister Juan Guillermo Zuluaga, and Uruguayan Farming, Fishing & Agriculture Minister Enzo Benech all traveled to China, Japan, and/or South Korea to promote their foodstuffs.
And they were successful. Brazil announced it will begin exporting rice, dairy products, flour for the production of animal feed and fertilised eggs to China, and pork to South Korea. Argentina announced it will begin exporting blueberries, lentils, peas and barley to South Korea and Thailand; as well as beef to China and Japan by the middle of this year. Colombia has made progress on opening the Chinese market to its beef and avocados, and is ramping up exports of those goods to South Korea. Uruguay also opened up the Chinese market to its exports of cattle on the hoof and blueberries. And ProChile — always ahead of the curve — is opening an office in Chengdu, China’s agriculture distribution hub.
“China is today the number one importer in the world of beef, and it’s a market that looks limitless in terms of quantity or quality” says head of the Argentina Beef Exporters Council Mario Ravettino, summing up the potential many exporters see.
There is still more work to be done. Brazil wants to add pigs and cattle, meat and processed meats to its exports to China, and is hosting a Chinese veterinary mission this week to inspect slaughterhouses. And Argentina is looking to move up the value chain by exporting soy flour, oil, and other processed products to China.
The biggest obstacle to increasing Latin American exports is not Chinese hesitation, but the lack of capacity in the region. Latin America has always lagged on infrastructure spending, and these days the key component of a successful export-oriented economy is supply chains. Whether its in agriculture or manufacturing, being able to connect with other markets is vital. As our friend Shannon O’Neil says:
Excluded from the most dynamic parts of international manufacturing chains, Latin American companies and workers are less likely to gain access to new technologies, to develop new skills and to move up the value-added ladder to higher-margin products and better-paying jobs. This isolation leaves the region less able to compete vis-a-vis other parts of the world in the making of things — not least because of the rise of other more successful regional hubs — and less able to attract global consumers to its homegrown brands.
While Argentine beef may soon be as well known in China and Japan as it is in the rest of the world, without focusing on infrastructure and homegrown supply chains, the potential of trade to boost Latin America will definitely have a limit.
Latin America’s Digital Crossroads: Why the Opportunities Are Huge — Knowledge@Wharton
Investidor quer aproximar Japão de startups brasileiras — Terra
Is tech in Latin America heating up? An interesting discussion with Felipe Monterio, author of “Digital Transformation in Latin America: a Leapfrogging Opportunity?” outlines how FinTech and e-commerce can use mobile phones to finally tackle the Latin American market. That pairs with a profile of Brazil Venture Capital (BVC) founder Mitsuru Nakamaya, who sees an opportunity for Japanese private equity investors.
Bank of China busca penetrar el mercado mexicano con servicios a grandes firmas chinas — Reuters
Bank of China quiere impulsar a empresas de su país en México — Forbes México
Bank of China plans to go 'local' in Mexico — Nasdaq
In an interview with Reuters, deputy chief executive of Bank of China Mexico Diego Folino says his bank is looking to expand in the country to support Chinese firms doing business there. BoC is looking to launch several loan products, wire transfers and treasury services.
El Gobierno suspendió un acuerdo nuclear con China para ahorrar USD 9.000 millones — Infobae
China has gotten Argentina to forgo a Canadian model for the Atucha III nuclear plant in exchange for a Chinese one, and a price tag purported to be $9b cheaper.
Processo multibilionário coloca em risco a Operação da Hyundai na América Latina — Jovem Pan
Hyundai’s relationship with Brazil dealership company Caoa has turned ugly, with a preliminary judgement that could force Hyundai to stay in the contract with Caoa that it wants out of for another ten years. Hyundai wants out because Caoa recently bought 50% of Chery’s operations in Brazil, and it also wants to begin building cars in Argentina that are currently imported from outside Mercosur by Caoa. Unless they are able to settle, the dispute is likely to go to international arbitration, and observers think it could put Hyundai’s Latin American operations in jeopardy.
BRICS New Development Bank plans to launch Americas Regional Office in Brazil — Xinhua
Following on the AIIB’s visit to Mendoza in March, the BRICS New Development Bank (aka the BRICS Bank) is planning to launch an Americas Regional Office in Brazil this year.
China — LAC
比亚迪斩获拉美地区最大纯电动卡车订单 — EVHui
Electric vehicle company BYD is selling 200 electric trucks to Brazil’s Corpus Saneamento e Obras Ltda.
China investment important to T&T — T&T Guardian
Dr Rowley goes to Shenzhen, invites Chinese investors to T&T — Daily Express
CAL optimistic about alliance with Air China — T&T Newsday
Chinese tourists are welcome — T&T Newsday
Trinidad and Tobago Prime Minister Keith Rowley wound up his trip to China emphasizing that Chinese investment is important to the island country, and inviting Mayor of Shenzhen Chen Rugui to lead a fact-finding mission to his country. State-owned Caribbean Airlines (CAL) also trumpeted the potential of partnerships with HNA and Air China.
Galleons Passage yet to pass through Panama Canal — T&T Newsday
PM Rowley doesn’t seem to have mentioned the words “Galleons” or “ferry” to the press in China, but we’ll bet it was discussed — the star-crossed Galleons Passage ferry is held up by paperwork at the Panama Canal.
Argentina: Macri llama a "profundizar" relaciones con China — El Comercio
Cancilleres de China y Chile celebran conversaciones para profundizar cooperación bilateral — People’s Daily
Wang Yi se reúne com chanceler do Chile em Bueno Aires — China Radio International
Cancilleres de Argentina y China se comprometen a impulsar la cooperación — Xinhua
Chinese, Chilean FMs hold talks to deepen bilateral cooperation — Xinhua
On the sidelines of the G20 Foreign Minister’s Meeting this week in Buenos Aires, Chinese Foreign Minister Wang Yi met with the Chilean and Argentine foreign ministers to deepen relations with the two countries.
China y Chile: Intereses en el litio que no convergen — El Mostrador
Compra de acciones de SQM por empresa china hipoteca los beneficios del litio para Chile, advierte académico — Estrategia
Wang and his Chilean counterpart Roberto Ampuero don’t seem to have mentioned the words “Tianqi” or “lithium” to the press, but expect it to be discussed behind closed doors. Dueling Chilean energy academics discuss whether the goals of the two countries can be reconciled. Domingo Ruiz of the University of Santiago says yes; Cristián Marcelo Muñoz of la Católica says no.
Acuerdo de EE. UU. y China: Colombia espera fin de aranceles al acero — El Tiempo
U.S. soybean exports scrapped as China shifts to Brazilian beans — Reuters
Trump Balks Over Billions in Secret Chinese Loans to Poor Nations — Bloomberg
Exportações de soja dos EUA são canceladas com mudança da China para grãos do Brasil — Globo
Like everyone else — and many in the White House, we suspect — we do not know what the end goal of the US government’s trade war with China is. While Colombia hopes the steel tariffs will be scrapped, and Brazilian soy exporters hope US tariffs stay up, our sympathies are with the shipping companies trying to make sense of all this.
Todavía no está claro qué queremos hacer con China — Ámbito
Precisamos falar da China — Brasil 24/7
Two pieces from the Argentina and Brazil angle discussing that they still need a China Strategy, but not suggesting they talk to each other about it.
Miniso: la expansión del fast fashion chino de diseño que aterrizó en Chile — La Tercera
China’s fast fashion brand Miniso has hit the ground running in Chile. In two months it has opened three stores, and is expecting to open 15 more in Santiago before the end of the year, and 52 total in three years. Miniso already has stores in Mexico, Panama, Venezuela, and Argentina; two weeks ago it opened its first store in Peru, and Colombia is next.
Llegaría a mil el número de empresas chinas asentadas en México — AM Querétaro
The number of Chinese firms in Mexico is about to reach 1,000, according to Karla Loyo at the Mexico-China Chamber of Commerce. Those firms have invested almost half a billion dollars, and that figure is expected to grow quickly in the coming years.
The Dominican Republic ditched Taiwan for China. Is Haiti next to cut diplomatic ties? — Miami Herald
Chinese investment in Dominican Republic set to grow — CGTN America
The view from Europe: China’s rapidly advancing Caribbean role — The Barbados Advocate
Continued reaction on the announcement of bilateral diplomatic recognition between Beijing and Santo Domingo, which is expected to drive Chinese investment in the Dominican Republic. Belize, St. Lucia, St. Kitts, Haiti and St. Vincent and the Grenadines are all considered as potential next in line in the Caribbean.
China stays on the sidelines as Venezuela spirals downwards — The Business Times
"CHINA is likely to extend an agreement providing crisis-stricken Venezuela with favourable loan repayment terms but will not lend fresh funds to President Nicolas Maduro's government, according to sources in Caracas and Beijing familiar with the situation."
Alibaba opens up trade opportunities with Argentina — CGTN America / YouTube
A video discussing how Alibaba’s platforms are providing Argentine SMEs with new markets.
No apareció China — Dinero en Imagen
In the second debate between Mexican presidential candidates, China was notable for its absence.
Bahamas and China sign housing MOU — Jamaica Observer
The Bahamas and China have signed an MOU on modular housing cooperation.
First container of Chilean Sweeki kiwifruit arrives in China — Fresh Fruit Portal
Another specialty fruit for the Chinese market from Chile.
Brief: Mexico and China sign hydroelectric agreement — BNamericas
Mexico and China signed a cooperation agreement on innovation of “minihydro” electric stations.
Korea — LAC
México va por más negocios a Corea del Sur — Economía Hoy
Samsong Industries invertirá 15 mdd en planta en Coahuila — La Jornada
ProMéxico head Paulo Carreño King was in South Korea this week, drumming up interest in Mexico. Samsung Industries is interested, and announced it was building a $15m seatbelt factory in Coahuila.
Comienza la negociación por el TLC entre Mercosur y Corea del Sur — BAE Negocios
South Korea and Mercosur kick off negotiations on a Free Trade Agreement this week.
Japan — LAC
JAPÓN espera tras TLCAN que dinamismo comercial en vehículos siga — iForex
Japanese auto firms with large operations in Mexico — like Toyota, Nissan, and Honda — are watching the ongoing NAFTA negotiations expectantly. They hope the revamped agreement keeps auto tariffs low, an issue that has become a sticking point between the governments of the US and of Mexico.
Japón sobre la relación con Argentina: "Tenemos confianza en que rendirá fruto económicamente” — Ámbito
Ministro das Relações Exteriores do Japão visitará a América Latina e os EUA — IPC
Taro Kono: Japão e Brasil, parceiros estratégicos e globais — Folha
Em viagem pela América Latina, Ministro das Relações Exteriores do Japão visita São Paulo — IPC
Japan foreign minister to visit Latin America, US — The Mainichi
Japan urges more of Latin America to join TPP — Nikkei Asian Review
Japanese Foreign Minister Taro Kono visits Argentina, Brazil, and Mexico as part of his visit to the G20 Foreign Minister’s Meeting this week. He highlighted growing trade links with Latin America as an alternative for Japanese dependence on China and there US. In particular, he encouraged Latin American countries to trancend it’s geographic name and join the Trans-Pacific Partnership.
Japão e Brasil buscam promover comércio e investimentos em infraestruturas — Exame
Brazil calls for Japan-South America economic partnership — Nikkei Asian Review
Mercosul quer iniciar negociações de parceria econômica com o Japão — Agencia Brasil
Returning the favor, Brazilian Foreign Minister Aloysio Nunes wound up his trip to Japan encouraging greater bilateral commercial ties and infrastructure investment, as well as a broader engagement between Mercosur and Japan that may be announced at the G20 Summit in Argentina in November.
India — LAC
Sterlite Power eyes USD 4 bn investment in Brazil by 2022 — India.com
Sterlite, which won an auction for an $800m transmission project in Brazil at the end of last year says it wants to invest up to $4b in the country over the next four years.
ASEAN & Oceania — LAC
WA signs co-op agreement with Argentina — Mining Weekly
Julie Bishop goes in to bat for Aussie miners in Argentina — Stockhead
Around the G20 Foreign Minister’s Meeting, the Aussies have focused on closer ties in mining and resources.
Singapore wine market to reach $1billion by 2021 — The Drinks Business
Chilean winegrowers can cheer the expansion of the Singapore wine market, driven by the country’s hospitality industry.