One of the critiques of the Latin America-China relationship is that China only looks for raw materials, and protects its market from finished goods. As Mauricio Mesquita Moreira told Bloomberg’s Mac Margolis last year: "“The more you add value to your exports, the more you pay to enter the Chinese market.”
So are recent moves by China to open up its soymeal market to imports from Latin America a sign the game has changed?
Last week, Argentina’s Cámara de la Industria Aceitera de la República Argentina(CIARA) oilseed crushers industry group announced that they would gain access to the Chinese market “in the coming months.” According to CIARA head Gustavo Idigoras:
“Selling soymeal to China has historically been Argentina’s ambition, but China refused,” Idigoras said, noting that the Asian country and world’s No. 2 economy preferred to buy raw soybeans and crush them into soymeal locally.
This week, head of the political section at the Chinese embassy in Brasília Qu Yuhui further pushed for exports of soymeal to China: “If a Chinese company and a Brazilian one together did a joint venture in Brazil to process soy, this would be a good choice for the benefit of both sides."
So why open up to a value-added product that China had so long protect domestic production of? Many observers chalk it up to countervailing tariffs China imposed in response to US President Donald Trump’s trade policy: “The trade war needs to be followed closely, because China replacing US soy with more [soy]meal imports is a paradigm change,” according to grains analyst Pablo Adreani.
But we’re not going to call it a paradigm change quite yet. While China has opened the door a crack, it’s still leaning against the door. As Qu Yuhui notes, there are no bilateral discussions to give Brazilian firms the same access Argentine firms are getting. The China International Import Expoin November would be an opportunity to show that China wants to give access to value-added products. Will they take it?
中国与多米尼克签署共建“一带一路”谅解备忘录 — Sino TF
过去一周，“一带一路”发生了这些大事— Belt & Road News
驻多米尼克大使卢坤代表中国政府与多米尼克政府签署共建“一带一路”谅解备忘录— Ministry of Foreign Affairs of the People’s Republic of China
Chinese Ambassador Lu Kun and Foreign Minister of Dominica Francine Baron signed a Belt and Road Initiative (BRI) Memorandum of Understanding last month, but only the Chinese government seems to have announced it. This makes Dominica the fifth Latin American country to sign a BRI agreement — all signed this year.
Lithium continues to be a hot commodity. Chile's Sociedad Química y Minera (SQM) has sold its stake of the Cauchari-Olaroz lithium brine project in Jujuy, Argentina to China’s Ganfeng Lithium for $87.5m. After the deal, Lithium Americas will own 62.5% of Cauchari-Olaroz, and Ganfeng will increase its stake to 37.5%. Ganfeng will also provide a $100m loan to fund development of Cauchari-Olaroz, expected to come online in 2020. Separately — and not to be left out — Peruvian president Martín Vizcarra has said that his country will create a regulatory structure for the mining of lithium and uranium in the next six months.
China: Por que a guerra comercial dos EUA é inútil— Brasil 24/7
U.S. shouldn’t ignore China’s influence in the Caribbean— Miami Herald
The visit of US Defense Secretary James Mattis to Argentina, Brazil, and Chile colored the China-US trade war discussion in Latin America this week. Mattis says that he is “ready to listen” and that the US wants to remain “partner of choice” for the region. All well and good, but ultimately he is not the one making these decisions for the US right now. And until the US decides to be more friendly, Latin America is going to continue focusing on the China market as an alternative.
Canciller japonés llegará este lunes— El Peruano
Canciller japonés visita por primera vez Colombia— El Espectador
Japanese Foreign Minister Taro Kono toured Ecuador, Peru, Colombia, and Mexico this week, strengthening ties with new governments and governments-elect in the region.
Japanese tourism to Mexico increases mostly to Cancun, Riviera Maya— Riviera Maya News
Mexican president-elect Andrés Manuel López Obrador (AMLO) has taken up the proposed rail project on the Yucatan to help further grow the tourism industry there. The Yucatan Korean Association says the government of South Korea wants to sponsor building the train. Japan may also have interest, following an uptick in Japanese tourists to the area.
Perú podría ver exportación récord de uva de mesa para 2018/2019— Portal Fruticola
Peru table grape exports may be up 50% this year to 45m boxes, thanks to a El Niño-shrunken harvest last year. China remains its second biggest export market, and now Peru is looking to export to Japan.
A decrease in US consumption of imports has shifted Trinidad amonia exports to South Korea and China. Trinidad exports to South Korea has more than quadrupled year-over-year to 100,252 tons between January-June, according to Argus. China imported 32,593 tons of Trinidad ammonia during the first quarter, up from 6,000t during the same period the prior year.
China — LAC
Panama and China to sign MoU on maritime cooperation— Seatrade Maritime
China’s Minister of Transport, Li Xiaopeng, visited Panama this week, sitting down with President Juan Carlos Varela and Minister of Maritime Affairs Jorge Barakat, among others.
Li also attended Colombian president Iván Duque’s swearing in this week. As Ben Creutzfeldt asks about having a transportation minister swanning about: "more BRI?”
Former Chilean president Eduardo Frei talked with Dominican Republic Foreign Minister Miguel Vargas about the “experience of Chile in relations with China and the rest of Asia” in Santo Domingo this week.
La vigorosa cooperación China-Perú— El Peruano
Chinese Ambassador to Peru Jia Guide pens a piece talking about the vigorous cooperation between the two countries.
The Latin American Business Aviation Conference & Exhibition (Labace 2018) in São Paulo next week will — for the first time — have a Chinese plane there, the Harbin Y-12.
Electrodomésticos “made in China” ganan mercado latinoamericano— Marco Trade News
The Fifth Chinese Electronics and White Goods Fair, organized by MOFCOM, just concluded in São Paulo.
Huawei Consumer Business Group global VP of products and marketing Jim Xu says that the company is planning to open a local call center and more stories in Chile so as to be able to take a larger slice of the smartphone market.
Dachser lleva sus servicios de transporte marítimo a China y México— Transporte Profesional
Dascher Iberia is expanding its less-than-a-cargo-load (LCL) maritime logistics service to connect Veracruz, Mexico to Ningbo, Shanghai, and Yantian China via Valencia, Spain.
Auguran exportación de café mexicano a China en 2019— El Sol de Puebla
Puebla State Secretary of Rural Development Rodrigo Riestra says that he hopes that Mexico will begin to export coffee to China next year.
Peruvian Foreign Minister Néstor Popolizio will head to Beijing next month to meet with his counterparts for the Strategic Dialogue on Economic Cooperation meeting.
The government of Argentina hosted a comprehensive meeting this week in Buenos Aires on the opportunities for Argentine companies in China, and the resources available to help them.
Concretan inversión china por 15 millones de dólares— El Sol de San Juan del Río
Chinese-owned F&H Fibra has invested $15m in a plant in Querétaro.
"Hay que buscar la forma de hacer las cosas de acuerdo al sistema chino”— Economía y Negocios
New Chilean Ambassador to Luis Schmidt — who held the same role in President Sebastián Piñera’s first government — lays out his vision for bilateral relations, focusing on Chile’s strengths: “fruit, energy, and astronomy."
Alimentos, falta "sintonía fina" en China— Economía y Negocios
Even though Chile exported $1.6b in fruit to China last year, Chinese consumers still think of it as a “far away” country. Chilean exporters are looking to change that perception.
According to a report by Oxford Economics, a slowdown in the Chinese economy wold hit commodity exporters like Brasil and Argentina the hardest.
Conoce la nueva ruta de la seda de China— El Deber
Further chin-stroking on the BRI and what it means for Latin America.
After last year’s parasitic-worms-in-tinned-mackerel, Chinese canned seafood has been reflowed back into the Peruvian market.
Chinese Health and Culture Centre to Open Soon in Jamaica— South Florida Caribbean News
Beijing International Trading Co. Ltd (Beijing Yijialu) is planning to open a Traditional Chinese Culture and Health Center in Jamaica.
Peru boosts mandarin focus on U.S., China at expense of Europe— Fresh Fruit Portal
Peru has this season boosted late mandarin exports to the U.S. and China by around a third year-on-year.
Chile's GESEX expects stronger nectarine season in China in 2018-19— Fresh Fruit Portal
Chile’s largest nectarine exporter, GESEX expects nectarine exports to China to increase by 10% this year.
Chile: Slow season for kiwis— Fresh Plaza
According to the Kiwi Committee of Chile, high stocks have slowed sales of the southern hemisphere Kiwis compared to this time last year.
Korea — LAC
Esto es lo que promete el programa de agricultura orgánica en El Salvador— Noticias de El Salvador
The (Korea-Latin America Food & Agriculture Cooperation Initiative) KoLFACI held an event on organic fertilizer in El Salvador.
Colima state Secretary for Economic Development Carlos Domínguez Ahedo participated in the Korean Knowledge Sharing Program in CDMX this week.
Brazil’s Foreign Trade Chamber has applied antidumping measure on imports of nitrile rubber from South Korea and France.
Samsung inaugura en Chile su tienda más grande de América, con 650 M2— Diario Financiero
This week Samsung opened its largest store in the Americas, a 650sqm store in Chile, that it expects to help boost local sales 30%
Aprovado acordo de cooperação entre Brasil e Coreia do Norte— Senado Federal
The Brazilian Senate has ratified an economic and technical agreement signed with North Korea in 2010.
Hyundai has made one million cars at its factory in Piracicaba, São Paulo.
‘Ecuador seeks SME cooperation with Korea’— Korea Herald
Ecuadorian Minister of Industries and Productivity Eva Garcia Fabre visited South Korea this past week to push for opportunities and support for Ecuadorean SMEs.
Japan — LAC
Un nuevo embarque de carne a Japón suma expectativas— App Noticias
After the test export by air of 200kg of Rio Negro beef to Japan, Argentina is picking up its game, sending 10,000kg of beef to Japan by sea from Buenos Aires this week.
St Vincent and the Grenadines Prime Minister Ralph Gonsalves calls on Japan to establish a strategic relationship with the 15-member Caribbean Community (Caricom).
ASEAN & Oceania — LAC
BHP Billiton has agreed to pay $50m to settle a class action from American investors who lost out when shares fell after the 2015 Samarco dam collapse in Brazil.
India — LAC
Given bottlenecks in the supply chain, CMA CGM has announced a surcharge on shipping sugar and cereals from southern Brazil all the way to the West Coast of North India.
GCC — LAC
Ambassador Ahmed Hatem Al Menhali had a busy week, traveling to Tijuana for the opening of the Belize consulate, and to Guatemala for a meeting with government officials.