And then there were 10...
Ok, it sounds a little dramatic when you put it like that, but the news Tuesday night that the Dominican Republic (DR) is switching bilateral diplomatic recognition from Taiwan to China (中华人民共和国和多米尼加共和国关于建立外交关系的联合公报) certainly caught many (but not all, including readers of this digest) China-LAC watchers by surprise. That is not to say that the Dominican Republic wasn't on the shortlist. Prior to Tuesday, of the 11 (now 10) countries in the Americas with diplomatic ties to Taiwan, the DR represented the nation with the largest GDP, second largest population, and China's second most important trade partner in the Caribbean.
Details on what caused the change of heart are still unclear. Taiwan is crying foul, saying that Santo Domingo was offered a $3.1 billion package of investments and loans to secure the switch. Beijing vehemently denies the claim, saying the move was “natural, perfectly justified, and fair." (理所当然，天经地义，光明正大). The move has received wide support from the Dominican business community, as well as from experts in Latin America, and a tepid response from the US government.
With 10 countries in Latin America and the Caribbean with ties to Taiwan remaining, the question is not if others may switch, but who will be next? As China dangles the carrot of the Belt & Road Initiative in Latin America with increased frequency, expect the diplomatic tit-for-tat between China and Taiwan to continue, driven by two priorities: securing economic and commercial relations, and diplomatic strength on the global stage (such as at the United Nations).
Looked at from a commercial and economic standpoint, Paraguay remains one of the frontrunners. Surrounded on all sides (literally) by countries with strong formal ties with China, Paraguay is somewhat of an anomaly. China ranks as its largest source of imports, ahead of both Brazil and Argentina. And while exports have lagged behind, Paraguay is the world's fourth-largest exporter of soybeans, a longtime priority for a China that is looking for other sources now that it has cut back purchases from the US. Incoming Minister of Foreign Affairs Luis Alberto Castiglioni says that the new government will try to have its cake and eat it, too, by establishing relations with China through the World Trade Organization, while maintaining diplomatic relations with Taiwan.
An often overlooked contender is Guatemala. By far the largest population and GDP in Central America — and larger in population and GDP than Paraguay — Guatemala shifting diplomatic recognition would be a bell weather that the other countries of Central America (Belize, El Salvador, Honduras, and Nicaragua) might soon follow, and that China was more concerned about compromising Taiwan’s influence at the UN. As China dangles the carrot of the Belt & Road Initiative in Latin America with increased frequency, the ability to resist the call of the world's second-largest economy presumably will be harder and harder.
From our standpoint, one of the biggest questions in the short to medium term is: How will this impact on Panama-China relations? For the last twelve months, Panama has been the darling of China, receiving a level of attention that far outweighs countries of similar size. Granted, Panama is home to one of the most important pieces of trade infrastructure on the planet, which gives it a strategic economic importance that outweighs its direct economic value. Is Panama the new norm? Or the exception to the rule?
But maybe the real question is, will the Pope beat Paraguay, Guatemala, and the rest to the punch?
Chile hails success of Chinese cherry campaign — Fruit Net
Chile launches first ever kiwifruit campaign in India — Eurofruit
Chile’s $5m cherry marketing campaign in China yields results: not only did Chinese imports increased by 108% compared to last season, but global exports also increased by 96%. Consequently, in light of increased demand for kiwis, Chile’s fruit industry will launch its first promotional campaign in India.
综述：拉美国家期待中国国际进口博览会成为中拉贸易纽带 — Xinhua
Apertura de China, exigencia para empresas que se aventuren — El Cronista
Guyanese businesses urged to sell more food, tourism to China as exports recover — Demerara Waves
China Int'l Import Expo to boost free trade, says embassador [sic] — Xinhua
As part of its charm offensive in highlighting how it can be a great export market, as well, China is drumming up interest from Latin America in the first China International Import Expo, to be held in November in Shanghai. More than 30 Mexican companies in technology to agriculture have confirmed their participation. The Chinese Ambassador to Argentina calls it: "an unrivaled initiative in the history of international trade."
Bitran responde a embajador de China: “Nosotros no politizamos, simplemente lo que hicimos es preocuparnos de que se respeten la leyes en Chile” — Pulso
Embajada china en Argentina presenta Exposición Internacional de Importación de China — Xinhua
The Chile-China lithium contretemps continues: former Chile’s Economic Development Agency CORFO) chief Eduardo Bitran, responds to Ambassador Xu Bu’s statements about the politicalization of Tianqi’s interest in SQM: “we are not politicizing, all we did was become concerned about how Chile’s laws are being respected.” The dispute is expected to continue, but will China escalate?
中国大工程打脸 “掠夺拉美”谬论 未来的生意在中国 — Huanqiu
Is China “plundering” (掠夺) Latin America? An article that looks at China Gezhouba’s work on the $4.7b Néstor Kirchner and Jorge Cepernic dams in the Argentine province of Santa Cruz tries to argue that despite pause due to environmental concerns, there are benefits for Argentina. The project — 85% funded by Chinese banks — is projected to create 5,000 direct and 15,000 indirect jobs, promote the development of local technology and other related industries (steel, concrete transportation, etc.). We’ll see.
U.S. postpones steel tariff decision for U.S. allies until June 1 — Reuters
Dispatches from the coming trade war 1: US President Donald Trump postponed imposing steel and aluminum tariffs on Mexico, Brazil, and Argentina, among others, for a month.
China Shunning U.S. Soybeans on Trade Tensions, Bunge CEO Says — Bloomberg
Dispatches from the coming trade war 2: Bunge CEO Soren Schroder says China is looking elsewhere for soy: "“Whatever they’re buying is non-U.S. They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the U.S.” The numbers are stark:
In the two weeks ended April 19, China canceled a net 62,690 metric tons of U.S. soybean purchases for the marketing year that ends Aug. 31, U.S. Department of Agriculture data show. At this time of year, South American countries typically complete their harvests and become the dominant shippers for several months. Brazil’s lead on global exports is expected to widen to a record in the 2017-2018 season as it sells 73.1 million tons abroad versus 56.2 million from the U.S., the USDA estimates.
The Asian Infrastructure Investment Bank comes knocking on Latin America’s door: is anyone home? — The London School of Economics and Political Science
LSE Global South Unit’s Álvaro Méndez writes on the Asian Infrastructure Investment Bank (AIIB) and its growing relationship with the Inter-American Development Bank (IDB), saying it’s an ideal match for Latin America’s needs. Seven countries in the region have been accepted as prospective members; only Chile has become a full member of the AIIB.
China busca inversiones extranjeras para ser el 'rey de la tecnología' — El Financiero
The Chinese government has established the China Integrated Circuit Industry Investment fund to attract foreign investment for their efforts in the semiconductor industry.
Asia ranks as one of Bolivia's top minerals markets — Xinhua
Asia leads in mineral imports from Bolivia, importing over 60% of the country’s mineral exports last year. Mining is Bolivia’s fastest growing sector.
China — LAC
Empresarios chinos exploran abrir planta de autos eléctricos en México — Xinhua
José Manuel López, president of the Confederation of Chambers of Commerce, Services, and Tourism (Concanaco-Servytur) says a group of Chinese investors will be heading to Mexico this month to evaluate options for an electric vehicle plant. The Confederation has also signed an agreement with Shanghai International Automobile City (SIAC) to expand collaboration.
Spotlight: Chinese hi-tech security firms eager to explore Mexico market — Xinhua
The 2018 Mexico Security Expo in Mexico City attracted several Chinese manufacturers of hi-tech security systems hoping to capitalize on the nation’s dangerous environment. Hikvision Digital Technology, responsible for over $6b in sales, opened several offices in Mexico and Latin America last year.
Luis Torres (Promperú): “La moda peruana tiene grandes expectativas con el mercado chino” — Modaes
Luis Torres, Director of Peru’s export promotion agency PromPerú, notes Chinese demand for Peruvian fashion has grown 50% over the past year, especially in Alpaca-made garments.
Sunday arrival of Galleons Passage in Mexico — Newsday TT
The Galleons Passage was expected to arrive in Acapulco on April 29 where it will remain docked for 5 days until it continues to make its way to Port of Spain.
Venezuela’s oil decline reaches new depths — Financial Times
Venezuela’s oil production reached 30-year lows, slashing government revenue, and is predicted to continue faltering. The country remains heavily indebted to China and Russia.
Increase in the number of Chinese tourists in Brazil under analysis in Brasilia — Macau Hub
Marcelo Lima Costa, President of the Brazilian Tourism Institute (Embratur), met with Chinese ambassador to Brazil, Li Jinzhang, to discuss increasing Chinese tourism in the country, through visa-free travel, increase in investments, and air travel.
Argentina profundiza el rojo comercial con sus dos socios estratégicos: Brasil y China — Clarín
Argentina has increased its deficit with both China and Brazil this first quarter. Bilateral trade with China increased by 94% compared to last year.
CRRC de China producirá 200 vagones de tren para Argentina — People Daily
CRRC will be producing 200 train wagons for the Argentine government in its third request, and are expected to be delivered next year.
Inauguran parques fotovoltaicos con colaboración de China — Bohemia
Two China-financed solar farms were inaugurated in Cuba.
China aproveita crise para investir e ganhar força no Brasil — Exame
Exame takes the opportunity to highlight recent Chinese investments in Brazil, which peak last year at a 7 year high.
Balance comercial China-Colombia — La Republica
A columnist highlights Colombia’s dire need to improve its logistical infrastructure to be able to support commercial activity with countries like China and the US.
Campaña de marketing digital promueve el aguacate mexicano en China — Marketing 4 eCommerce
Mexico’s national avocado producer association (APEAM) has launched its Avocados from Mexico (AFM)) campaign on Chinese social media sites Weibo and WeChat to attract consumers. China is now the fifth largest avocado market.
Perú tendrá por primera vez un pabellón en la feria tecnológica más grande de China — El Economista America
Peru will take part in the China Hi-Tech Fair — China’s largest — in November.
Panamá seduce a China y EEUU ante caída del turismo con Colombia y Venezuela
The Panamanian Tourism Authority (ATP) is having to look elsewhere now that Venezuela's strife has stifled tourism to Panama. Because of this, the ATP has launched a campaign to attract Chinese, European, and North American tourists.
ITB China sells out ahead of 2018 show in Shanghai — Breaking Travel News
ITB China, a 3-day travel fair held in Shanghai, is fully booked one month ahead of the show; participating countries include Argentina, Brazil, Chile, Columbia, Dominican Republic, Mexico, Panama and Peru.
Japan — LAC
Japan-bound VLCC laden with Brazilian crude likely looking for home: sources — Platts
Whither the VLCC Baltic Glory? The BP cargo ship holding 100,000 mt of crude oil in Qingdao,is now on its way to Nagasaki, due to an oversupply of crude in China. If the shipment is received by the Japanese — which many refiners have denied purchasing — it will be Japan’s first receipt of Brazilian crude since 2010.
Brazil ethanol sales to Japan to sputter as Tokyo woos Trump — Reuters
Japan has loosened emissions requirements after negotiations with the US, affecting Brazil’s sugar cane-based ethanol producers who used to have most of Japan’s market share. Sugar cane based ethanol releases less greenhouse gases, making them a greener option.
Áreas industriais do Brasil estão na mira de japoneses e árabes — Diário de Comércio, Indústria & Serviços
Thaíse Dutra, Executive Secretary of the National Council on Free Trade Zones of Brazil, says attracting foreign investors to invest in such zones is the order of the day. In the past year, the most productive conversations have been with Japanese and Arab firms.
Korea — LAC
Samsung to Supply Onyx Cinema LED Solution to Latin America — Korea Biz Wire
Korea’s Samsung will begin supplying Mexican cinema chain Cinemex with new LED display solutions.
GCC — LAC
United Arab Emirates, Mexico to increase cooperation in tourism — The Gulf Today
The UAE Ambassador to Mexico, Ahmed Hatem Al Menhali, met with Mexico's Secretary of Tourism, Enrique de la Madrid Cordero, to discuss improving bilateral relations, including a new airline route connecting Dubai and Mexico City and reciprocal visa-free travel.
India — LAC
Venezuela offers India 30% discount on crude but with cryptocurrency rider — Business Standard
Cryptocurrency fever hits India? Venezuela has offerred India a 30% discount on crude oil purchases, as long as India uses the country’s new blockchain tech-based currency Petro.
India signs deals with 8 countries for farm exports, looks for more markets — Hindustan Times
India has come to new agreements over agricultural exports with Chile and Ecuador.
Bolivia wants India to ink pact for gaining access to its lithium — LiveMint
Bolivia’s ambassador to India, Sergio Dario Arispe Barrientos, said Bolivia is seeking an agreement with India for extracting lithium from the country. Bolivia is part of South America’s Lithium Triangle, but lags in production due to a government monopoly.
ASEAN & Oceania — LAC
Kadin Sets Up Committee to Boost Trade Ties Between Indonesia, Brazil — Jakarta Globe
Indonesian Chamber of Commerce and Industry, or Kadin, has set up a special committee tasked with boosting trade relations with Brazil. Anderson Tanoto, the youngest son of Indonesian tycoon Sukanto Tanoto, was appointed as chairman of the Brazil Committee. The Tanoto family owns a pulp and paper factory in Bahia, Brazil.