This past week Beijing hosted the Forum on China-Africa Cooperation (FOCAC), a gathering for China and the 53 members of the African Union (including first-time participants São Tomé e Príncipe and Burkina Faso, both of which recognized Beijing diplomatically in the past two years).
In between dozens of photo-ops, Chinese President Xi Jinping announced $60b in new funds (非盟盛赞中国支持非洲发展的举措) for the continent: $15b in interest-free loans; $20b in credit lines; $10b in development funds; and $5b to finance African imports. Xi also announced forgiveness of bilateral interest-free loans to the poorest African countries that have diplomatic relations with Beijing (中国对非合作八大行动 再向非提供600亿美元支持). The package matches the $60b China promised at the 2016 FOCAC meeting in Johannesburg. Xi also said that Chinese companies will be encouraged to invest at least $10b in Africa over the next three years.
China’s experience in Africa (and to a lesser extent Central and South East Asia) is sometimes looked to as a bellwether for its evolving relationship in Latin America. So how could this impact China’s relationship with Latin America?
Broadly speaking, Chinese companies, in particular, large state-owned enterprises (SOE), have often taken the lessons learned from their experience in Africa and tried to apply them to doing business in Latin America. This has caused trouble, with project host countries in Latin America concerned about competitive bidding, local content, local employment, and opening up China to value-added exports. These concerns have often left a sour taste in the mouth of politicians and civil society leaders.
As the current presidential administration in the United States has upended global trade norms and pulled back from its role in the region, Latin America has increasingly turned to China to fill the vacuum. Arguably, nowhere is this more noticeable than the region's constant battle to solve its infrastructure gap. Seven Latin American countries have joined the Belt and Road Initiative (BRI) since January to address that, with Costa Rica being the most recent country to join this week.
However not all BRI projects have worked out as expected. Pakistan has begun to have second thoughts about the terms of investments in the China-Pakistan Economic Corridor. Sri Lanka is concerned about China’s takeover of the Hambantota Port in a deal to address debt incurred in the building of that port. And Malaysia has asked China to cancel some $22b worth of projects. And even at FOCAC, South Africa’s President Cyril Ramaphosa emphasized the need for more value-added exports from Africa to China.
For all intents and purposes, China's (modern) involvement in Africa is a half generation ahead of its relationship with Latin America. And while some Latin American observers see China-Africa cooperation as “the most fruitful of the last two decades”, both sides would be best served to learn from what has worked, but more importantly, what has not, up till now.
Palabras del Embajador Tang Heng en el Acto de la firma de Memorándum de Entendimiento entre el Gobierno de la República Popular China y el Gobierno de la República de Costa Rica sobre Cooperación dentro del marco de la Franja Económica de la Ruta de la Seda y la Iniciativa de la Ruta Marítima de la Seda del Siglo XXI— Chinese Embassy in San José
Another week, another Latin American country joins the Belt and Road Initiative. This week it’s Costa Rica.
践行“一带一路”倡议 中企助力巴西第二大港快速发展— China News
The purchase of 90% of the Terminal de Contêineres de Paranaguá (TCP) by China Merchants Port (CMPort) was just the beginning, with the firm saying that it plans to grow in Latin America “by acquisition or expansion.”
Chinese energy firm Hanergy Thin Film Power Group has announced the opening of its Latin American operations in São Paulo. The fabricator of thin film for solar power panels is looking for local partners and to build a plant in Brazil. Hanergy says it will invest $50m over the next year to grow in Brazil, as well as Ecuador, Perú, Chile, and Argentina, and already has $4.3m worth of deals with 15 companies in the region.
Argentina tax may boost Australian lithium miners— Australian Financial Review
As part of the government’s package to head off a full-on balance of payments crisis, Argentina is reinstating taxes on exports, including an effective 3% rise on soy exports, and a similar one on lithium. This will impact hopes for a recovery in soy exports to China next year, and Australian lithium producers are hoping to benefit.
Exportação do Brasil cresce com guerra comercial— Época Negocios
China reemplazará compras de soja de EEUU por suministros de Brasil y Argentina— El Economista América
The fallout from the US-China trade war continues. Many — inclunding China’s Jiusan Group — see Brazilian and Argentine soy growers as the big winners.
Campo mexicano llega a 68 nuevos mercados— El Financiero
Latin American agriculture is spreading far and wide. Mexican farmers opening up 68 markets in 29 countries over the past six years, including China, South Korea, UAE, Qatar, and Singapore, among others. And Chile’s Agriculture Minister Antonio Walker says his country’s wineries are looking to grow in China, India, Southeast Asia, and elsewhere.
China — LAC
Mexico beef export increased 11.8% from January to July.
Further news on Chile and Argentina recognizing each other’s visas for Chinese tourists, with Tokair calling it "South America’s version of the ‘Shengen visa.’"
Em 2019, satélite Brasil-China vai monitorar desmatamentos— Agência Brasil
China and Brazil will launch the Cbers-4A satellite next year to monitor deforestation in Brazil.
A good article on Chinese student interest in learning about Latin America, with the memorable line about Bossa Nova: "I really like this kind-of-close-to-jazz music!”
Brazil and China sign MoU for cooperation in ICT sector— Telecompaper
Brazil and China will share information and best practices on developing broadband networks, 4G and 5G mobile networks, and the Internet of Things.
Beijing Yijialu International Trading Company Limited is going to establish traditional Chinese medicine centers in the Caribbean over the next five years.
Resultados auspiciosos— El Peruano
The verdict on Peru Foreign Minster Néstor Popolizio’s trip to China? “Auspicious results."
Brazil approves WTO consultation over China's sugar import safeguards— Agribusiness Intelligence
Brazil is going to to take its case on China’s safeguards against its sugar to the World Trade Organization.
More on the impact of “new NAFTA” on China.
JAC espera traer autos eléctricos a Chile— Economía y Negocios
JAC automobiles is looking to bring electric cars to Chile.
China analiza investigación sobre papel aluminio lanzada por México— El Sol de México
China is considering anti-dumping tariffs on Mexican aluminum foil.
Advierten a Guatemala no seguir pasos de El Salvador— La Prensa Gráfica
US government officials talk about the Chinese presence in Latin America. Southcom head Adm Kurt Tidd notes China’s great economic influence, and Sen Marco Rubio warns Guatemala to not change diplomatic relations like El Salvador did.
El Salvador looks to sell agriculture products to China now that they’re besties.
Presencia militar de China en América Latina— La Estrella de Panamá
Panamanian concerns about Chinese military presence in Latin America, and especially the Caribbean basin.
Debatirán sobre desafíos de América Latina— El Peruano
This week is the CAF Development Bank conference in DC, where China’s presence in the region is a topic of conversation.
Our friend Gabriel Barletta of Panama’s Chamber of Commerce gives an update on the status of China-Panama Free Trade Agreement discussions.
Folha de São Paulo’s Brazil-China event this week in Tampa.
Campaña de promoción de cerezas chilenas recibe premio en Asia— Portal Frutícola
Chile’s ASOEX Cherries committee received the “Best Marketing Campaign of the Year” award at Asia Fruit Congress in Hong Kong for its 2017-2018 China campaign.
An op-ed describing China and Latin America as distant friends who are growing closer together.
Korea — LAC
KIA México se adaptaría a nueva regla de origen automotriz— El Economista
KIA is looking to adapt its Mexican operations to fit in the “new NAFTA” regulations.
Mexico and South Korea are going to work closer together on space.
Sheinbaum se reúne con embajador de República de Corea— El Universal
Ambassador Kim Sang-il of South Korea met with CDMX Mayor-elect Claudia Sheinbaum.
Japan — LAC
Kirin’s Brazil subsidiary is having to struggle over water rights in the dry Northeast.
Busca Conalep formarse en materia automotriz— El Sol de Salamanca
Mexico’s National College of Professional Technical Education (CONALEP) is going to work closer with Japan to improve the automotive opportunities of its graduates.
Será Japón aliado estratégico de Michoacán: Embajador Takase— El Sol de Zamora
Japanese Ambassador Yasushi Takase visited Lázaro Cárdenas in Michoacán, with an eye to the Special Economic Zone there.
Japón y México, a punto de firmar un acuerdo sanitario— El Heraldo de México
Japan and Mexico are on the cusp of a deal that will allow for the direct export of foods from Japan to Mexico, without having to transship through the United States.
Nissan reforça sua presença na América Latina– Auto Indústria
Nissan is planning to open a dealership every eight days in Latin America this fiscal year.
In an interview, Sumitomo SHI FW lay out how it is looking to help Latin America reduce its carbon footprint.
Japón recibió cargamento de limones argentinos— Portal Frutícola
Argentine lemons arrive in Japan.
India — LAC
Brazil is looking to overtake India as the second largest exporter of cotton, thanks to demand from China.
ASEAN & Oceania — LAC
Australian cherry exports to China will be tariff-free starting 1 January 2019. Could they give Chilean cherries a run for their money?
GCC — LAC
Cinépolis llega a Arabia Saudita— El Universal
Mexican movie theater chain Cinépolis has received license to open in Saudi Arabia, in association with the Al Hokair and Al Tayer groups. Expansion to the UAE, Oman, and Bahrain are in the works.
Agriculture Ministry Executive Secretary Eumar Novacki is leading a delegation to Dubai, Cairo, Istanbul and Ankara over this week.