Luis “Toto” Caputo was out Tuesday morning as head of Argentina’s Central Bank, the BCRA. The move was surprising, coming as it did in the middle of President Mauricio Macri’s trip to New York for the United Nations General Assembly. It was also worrisome, as it came during the sensitive negotiating of a change in the terms — increasing the size and front-loading the payments — of the now $57b, three-year Stand-By Arrangement (SBA) agreed to with the International Monetary Fund (IMF). Guido Sanderlis, deputy to the Minster of Finance, took over at BCRA.
It’s a big stumble for Argentina and a sharp fall for Caputo, who as finance minister almost exactly a year ago famously said: “I’m convinced Argentina will be the star of emerging markets for the next 20 years. I don’t mean to be cocky, but it’s very evident.”
Caputo had threatened to leave as negotiations with the IMF came to a head, as he wanted more funds than the IMF was comfortable with to support the peso, which has declined over 50% this year. Ultimately, Macri sacrificed Caputo to play nice with the IMF, and Sanderlis is expected to tow the government line.
Negotiations between Argentina and the IMF were more difficult than expected in part due to China. But for once US President and China-hawk Donald Trump was not the stumbling block:
"The negotiations were much tougher than expected, despite overwhelming support of the administration of Donald Trump, which considers supporting Macri strategic. France, Holland and Germany maintain a very hard line against Macri's administration, due to certain business deals with China."
What business deals? While the internal discussions of the IMF are under wraps, media in Argentina point to the renegotiated deal on the Atucha nuclear plants, the acquisition of stakes in lithium mines by Chinese companies, the Neuquen space station, and the swap line between the BCRA and China’s central bank, the PBoC.
Argentina is rumored to be expanding its swap line with China by $9b (instead of the original $5b), bringing it to a total of $20b. The BCRA was supposed to have drawn $3b of those funds in Dec 2015, a week after the new Macri government was inaugurated to stabilize the peso against dollar at that time, in the wake of liberalizing the exchange rate. Negotiations were put on hold for almost three months in the wake of the departure of Caputo’s predecessor, Federico Sturzenegger. While the agreement was thought to be “imminent,” the unexpected transition may lead to another pause at a time when the BCRA is trying to rally market sentiment.
With the departure of Caputo and Sturzenegger, only Ernesto Bosch, founding President of the BCRA, has served out a full term. We wish Sanderlis better luck.
México sería el ganador de la guerra comercial entre EU y China— Dinero en Imagen
Tras TLCAN, ¿México debe voltear a China?— Azteca Noticias
Ni EU ni México... China podría pagar el muro de Trump— El Financiero
Mexico is trying to figure out if it can play the arb between China and the US in the tariff war. It’ll be tough to thread the needle - will it be worth it? Join us next week to find out.
王毅分别出席中国―拉共体“四驾马车”外长第六次对话和联合国“为维和而行动”倡议高级别会议--新闻报道-人民网— People’s Daily
Also at the UNGA, Chinese Foreign Minister Wang Yi met with counterparts from Community of Latin American and Caribbean States (CELAC), which China seems to be increasingly using as a way to engage Latin America without the involvement of the US.
China amplía habilitación de plantas argentinas para exportar ca— Marco Trade News
Another reason why Argentina wants to play nice with China - over two-dozen Argentine meatpackers just got approved to export to China.
Trump Dredges Up The Monroe Doctrine— Two Weeks Notice
At the UN, President Donald Trump takes a not-so-veiled swing at China in Latin America:
Here in the Western Hemisphere, we are committed to maintaining our independence from the encroachment of expansionist foreign powers… The United States has recently strengthened our laws to better screen foreign investments in our country for national security threats, and we welcome cooperation with countries in this region and around the world that wish to do the same. You need to do it for your own protection.
Nova Rota da Seda avança para a América Latina— Jornal do Comércio
China picks up Suriname in the Belt and Road Initiative.
Guerra comercial EEUU-China golpeará a Honduras— El Proceso
Honduras president laments U.S. aid cuts, welcomes role of China— The Japan News
Is Honduras next to diplomatically recognize Beijing? President Juan Orlando Hernández may be dropping hints:
Hernandez said China’s growing diplomatic presence posed a “quandary” for the region, but also “an opportunity for all,” provided there are “clear rules.” Other countries would likely follow the lead of El Salvador and Panama soon, he added.
“We’re still with Taiwan. Each country follows the principle of self-determination, that it can make its own decisions,” he said. “For the time being, we’re betting on a commercial relationship with Taiwan, a window to enter the Asian market.”
Brazil soybean exports to China soar— The Fencepost
BCR: Perú estable a pesar de guerra comercial entre EE.UU. y China— El Economista América
Guerra comercial entre EUA e China abre oportunidades para SC— Notícias Agrícolas
China comprará más soja argentina— Agritotal
Sin soja en Brasil, China importará más desde Argentina— BAE Negocios
China to Start Buying More Argentine Soybeans— Successful Farming
US-China trade war winner: Brazil soybean exports— Yahoo Finance
Dispatches from the tariff war, where everyone is playing three-card monte with soy. Most striking: “Argentina is buying U.S. beans for the domestic market and exporting its own production to China."
China — LAC
China opens embassy in Dominican Republic— Japan News
Danilo Medina inaugurará embajada dominicana en China— La Nación Dominicana
China officially opens its embassy in the Dominican Republic, with the presence of Foreign Minister Wang Yi and President Danilo Medina.
As Panama deepens its relationship with China, our friend Evan Ellis reports on what that means for the US.
Ahead of expected winter steel output cuts, Chinese steel mills like Hebei Jingye Group are rushing to secure long-term contracts for high-quality iron ore from Vale.
The telegraph looks at the 300 homeowners who benefitted from the $2m donated by Beijing for repairs on Antigua and Barbuda in the wake of Hurricane Irma; it notes the US donated $800,000 to Antigua and Barbuda and Dominica.
Chilean Minister of Agriculture Antonio Walker and president of the Association of Fruit Exporters (Asoex) Ronald Brown underscore how China is driving fruit exports.
JD.com has made plans to fly New Zealand kiwis, Canadian cherries, oranges and cherries from the west coast of the United States, and Chilean blueberries directly to China in 48 hours.
The first container of Peruvian lobsters to be shipped to China arrived this week.
Zhao Bentang, Director General of the Latam Department at MOFA says that things for a renegotiation of an FTA 2.0 between China and Peru are going along swimmingly.
China ajudará Venezuela a resistir a sanções dos EUA— Brasil 24/7
Zhang Jianhua, president of CNPC, visited Venezuela during September 19-20 to follow up on the agreements Maduro signed last week giving China a bigger stake in their oilfields.
Brasil é convidado de honra em feira na China— Jornal do Comércio
Everyone is gearing up for the China International Import Expo in Shanghai in early November. But China seems to be telling everyone that they’re the guest of honor.
Brasil perde protagonismo para China na América Latina— Diário Comércio Indústria e Serviços
Influências política e econômica do Brasil na América Latina diminuem— Diário Comércio Indústria e Serviços
Is Brazil losing the leadership role in Latin America to China.
More details on Brazil’s plan to go to the WTO on China’s sugar anti-dumping tariffs.
Cabinet to decide on disclosure of MoUs with China— Stabroek News
In the wake of concerns about the Trinidad La Brea deal, the government of Guyana is considering disclosing the terms of agreements with Chinese firms.
Chile se acerca a la industria de Defensa china— Noticias Infodefensa América
Chinese defense companies stealing a page from US defense companies playbooks?
Inversión de China a la alza en México y BC; no afectan medidas de EU— Uniradio Noticias
Alentadora relación entre México y China; cónsul general— El Sol de Tijuana
Chinese Consul General in Tijuana Yu Bo talks about his country’s investments in Baja California.
Jiangsu province is looking to up its trade and investment game with Peru.
Inspectores chinos visitan plantaciones de arándanos en Argentina— Portal Frutícola
Chinese phytosanitary inspectors visited blueberry farms in Entre Ríos Argentine to move them towards being able to export to China.
Timóteo Saba M´bunde in Guinea-Bissau says that both Brazil and China are both using “third-world” and “solidarity and brotherhood” talking points to achieve their goals in sub-Saharan Africa.
China Railway Group and China Harbour Engineering Company are both looking to win concessions to build highways in Chile.
Los emprendedores chilenos que están "probando suerte" en China— Economía y Negocios
Interviews with Chilean entrepreneurs discovering what China has to offer them.
Mexican avocado growers see China as a strategic market.
Peru’s exports to China just keep rising.
CAMC has set up a distribution hub in Panama’s Colón Free Trade Zone that it sees as being able to serve the Latin American market.
Brazil 'could help meet China's energy needs’— Upstream Online
Brazil’s deep water reserves are a selling point for China.
Jamaican poet warns of possible China 'debt trap’— Loop Cayman
Korea — LAC
文대통령, 칠레 대통령과 정상회담…양국 FTA 개선 협상 추진 — E-Daily
At the UNGA, Korea pushed for the FTA with Chile and joining the Pacific Alliance as an observer.
Mexico, Colombia, and South Korea got their heads together on creative industry best practices in Bogotá this week.
Peru’s ProInversión pushed the country at the Global Infrastructure Cooperation Conference in South Korea this week.
Japan — LAC
Brazil's state-run development bank BNDES raised US$100mn through credit linesfrom Japanese lenders Japan Bank for International Cooperation (JBIC), Mizuho Bank and The Bank of Saga.
Japón, principal mercado turístico de Asia para México— Mundo Ejecutivo
With 115,700 tourists visiting in 2017, Japan is the biggest market in Asia for the Mexican tourism industry.
Planteles chilenos concretan instancias de colaboración con Japón— Economía y Negocios
This week the Catholic University and University of Chile held a conference with the University of Tokyo to deepen academic collaboration.
An interview with Yorizumi Watanabe, professor of International Politics at the University of Keio on how now is the time for a Japan-Uruguay deal.
India — LAC
Stage-setting Prime Minister Narendra Modi’s trip to the G20 in December, a think tank argues that Latin America should be a bigger focus for India.
The 8th India-Latin America and Caribbean Conclave will take place in Santiago Chile next week.
ASEAN & Oceania — LAC
Peruvian lubricants company sets up ANZ HQ in Geelong— Manufacturers’ Monthly
Peru’s Vistony is looking at Australia and New Zealand.
Alongside UNGA, the Pacific Alliance and ASEAN met and agreed to continue working more closely together.
GCC — LAC
Emirates wanted daily flights into Mexico City via Barcelona; Mexico gave them three a week. So now it’s back to the drawing board.
Maybe Emirates will look at Asunción? On the sidelines of UNGA, the UAE and Paraguay cut a visa deal.
Brazil’s O Boticário enters UAE beauty market— Trade Arabia
O Boticário, the largest fragrance player in Brazil, has opened its first international Amphora concept store at City Centre Mirdif, Dubai.