This week was expected to be a big week in China-Latin America relations, with the Inter-American Development Bank (IDB) scheduled to hold its Annual Meeting in Chengdu, China. However, on Friday the IDB announced in a terse message that the Annual Meeting “would not be held", and would be relocated to a place recommended by management. The cancelation was a shocking turn of events, especially in the context of the overall trajectory of the Latin America-China relationship.
The decision to reschedule pivoted on China’s refusal to allow the IDB Executive Director for Venezuela Ricardo Hausmann to attend the annual meeting. Hausmann had been appointed by Venezuela's interim president Juan Guaidó to represent his country at the bank, to replace Nicolás Maduro’s proxy. The IDB recognized that appointment earlier this month. Underscoring the uncertainty, the IDB currently does not list an Executive Director for Venezuela on its website. But, the overwhelming support for Guaidó in the Western Hemisphere made the decision a foregone conclusion.
This all started with the Trump administration trying to limit Chinese influence in Latin America, and the IDB coming into its cross-hairs. The White House had been irritated by the otherwise-pro formadecision to hold the IDB Annual Meeting in a shareholder country (Annual Meetings had been held in Busan, South Korea, and Okinawa, Japan). US Treasury Undersecretary for International Affairs (and President-presumptive of the World Bank) David Malpass sent IDB President Luis Alberto Moreno a nastygram complaining about the decision to host the IDB Annual Meeting in China, writing:
I have serious reservations about the bank's process that led to that initial decision, and I do not think the 2019 meeting could be nearly as successful in Beijing as it would be if held in the region,
While unilateral demands like these are the Trump administration’s bread and butter, they fell on deaf ears. Moreno smartly disarmed the issue with a planned IDB 60th Anniversary celebration in Washington, DC, saying: “We have found the best of all worlds.” Thus stymied, the US seemed to have lost its traction on the issue, and China would have another of the diplomatic set-pieces it sees as a key part of its global engagement.
But China’s decision to double down on its support of Venezuela’s Maduro (who literally cannot keep the lights on), and refuse Guaidó’s representative entrance to China to attend the Annual meeting, has snatched defeat from the jaws of victory. It turned bilateral one-upmanship between China and the US into a multilateral statement on democracy in the hemisphere that China could not gainsay. Deputy Assistant Secretary of State for Western Hemisphere Affairs Kimberly Breier turned the US position from great power politicking to standing up against what "violated a century of diplomatic norms.”
Breaking its silence four days after the cancellation, the Chinese Foreign Ministry laid out its view that:
The overwhelming majority of the IDB membership, including China, are of the view that the IDB annual meeting, as a gathering for the financial sector, should focus on financial cooperation. As such, it is hardly an appropriate venue for discussions of sensitive political issues. However, a certain country had continuously stirred up the sensitive political topic of the Venezuelan issue.
Local authorities are acting like nothing is wrong, with Chengdu and Panama signing an MOU (国际朋友圈再扩大！成都与巴拿马城建立友好合作关系). But the fact that websites like Sina and Soho now turn up anodyne articles on the planned Chengdu Annual Meeting as “not found” says everything about how Chinese authorities feel this has turned out.
China would seem to have misjudged how Latin America has shifted its position on Maduro, while the latter has become ever more dependent on his few sponsors left. If China had accepted Guaidó’s man, Maduro would not have changed his relationship with China. In not accepting Guaidó’s man, China has run the risk of damaging its relationship with the entire region.
A smarter move by Chinese diplomats would have been to split the difference by continuing to not recognize Guaidó as president of Venezuela but allowing Hausmann in as a duly recognized member of the IDB Executive Board. This would have strengthened China’s multilateral institution and rule-of-law credentials that have been brought into question. It would have also helped concerns that China wants to ride roughshod like Latin American observers have seen it do in Africa.
The Chinese government would do well to learn the lesson that, despite the economic and geopolitical power differential, it would benefit from working multilaterally and treating Latin America as an equal. The Trump administration should learn this lesson, as well.
The WSJ asks the question of the hour: what does China like more, cherries or avocados?
'Nosso grande parceiro é a China, em 2º lugar os EUA', diz Bolsonaro— Estadão
Ruralistas reclamam de viés anti-China no governo Bolsonaro— Folha
EUA, Canadá, Austrália e Japão ficam liberados de visto para o Brasil— Valor
Bolsonaro reforça China como principal parceiro comercial do país— Correio Brasiliense
Venezuela e China devem ser temas principais de conversa entre Bolsonaro e Trump— O Globo
Brasil aceitará dinheiro chinês, diz Guedes nos EUA— Istoé
Brasil não vai reduzir exportações para China, diz Paulo Guedes— Folha
China, 3º na cama de Brasil e EUA— Folha
Brazilian President Jair Bolsonaro visited Donald Trump at the White House, with China being the third wheel. The Brazilian government has really toned down the anti-China rhetoric. Japan gets a boost from the meeting, joining the US, Australia, and Canada in getting Brazilian tourist visa requirements waived.
Los dueños de US$1.800 billones que buscan negocios en Colombia— Dinero
Eight funds from Canada, the US, China, Singapore, Japan, Korea, and Dubai — controlling a total of $1.8t in assets — visited Colombia looking for investments.
China offers help to Venezuela to restore power— Reuters
China pronta a ajudar Venezuela após apagão— Jornal de Angola
China ofrece ayuda a Venezuela con el peor apagón de su historia— Radio Canada
A China também é responsável pela crise venezuelana atual— Esquerda
China pesa más en Venezuela que en toda América Latina— Al Navío
China offers to help Maduro turn on the lights.
El Salvador halts Taiwan FTA cancellation as China ties probed— FT
El Salvador: China no menciona en plan el futuro del TLC— El Economista
Supremo salvadoreño suspende “provisionalmente” cancelación del TLC con Taiwán— La Gran Época
The new government of El Salvador President Nayib Bukele is reviewing the impact of the country’s decision last year to diplomatically recognize Beijing.
US expert warns: Be cautious with Chinese loans— TT Guardian
T&T blanked as Trump invites Caribbean leaders to meeting— TT Daily Express
Trinidad & Tobago blanked as Trump invites Caribbean leaders to meeting— Stabroek News
Rowley unfazed by Trump blank: So what?— TT Newsday
Did Trinidad & Tobago get snubbed by Trump because of a close relationship with China?
Acordo EUA-China e o agro brasileiro— Folha
Mercados mexicanos avanzan por renovado optimismo sobre negociación comercial EEUU-China— Reuters
Sale ganón aluminio con guerra EU-China— El Norte
Fin de una era: por qué China ya no crece a "tasas chinas" y cómo afecta a América Latina— El Fulgor
How Chinese Investment in Latin America Is Changing— Americas Quarterly
Our friend Otaviano Canuto takes to the pages of Americas Quarterly to analyze how Chinese investment in Latin America is evolving from infrastructure and energy to services.
Latin America’s gold e-rush— Financial Times
Ola de inversiones apuntalan el e-business en América latina— El Cronista
The Financial Times highlighted our comments on SoftBank’s Latam fund:
However, SoftBank, which is not known for being either soft or slow, has bigger sums to spend. That potentially makes it less agile. Latin America also still has relatively few attractive companies operating across multiple countries to invest in. Novam Portam, the Asia-Latin American consultancy, even wonders: “Will SoftBank have the patience to do the diligence required? Or will the headline $5bn not get put to work?”
Para Uds que lo prefieren en español, el articulo también se publicó en El Cronista:
Novam Portam, la consultora de Asia-América Latina, incluso se pregunta: “¿Tendrá SolftBank la paciencia para hacer la diligencia necesaria? ¿O será que los tan anunciados u$s5.000 millones realmente no serán puestos a trabajar?
China — LAC
Aguacate, frutas y carne locales llegarían hasta China— Portafolio
Colombia tras mercado agro en China— El Nuevo Siglo
Colombia busca estrechar lazos comerciales en China con productos agrícolas— Panam Post
Colombia: Estos productos nacionales llegarían a China— América Retail
Colombia desea ampliar el ámbito de su comercio con China, dice viceministra— People’s Daily
Colombia va por más inversiones de Asia— Portafolio
Celebran en Chile ser principal exportador de frutas frescas a China en 2018— Xinhua
Chile consolida su posición como principal exportador de frutas frescas a China— La Tercera
Empresa china SDIC busca expandirse en industria agrícola chilena— Xinhua
China entrega a Panamá estudio para tren hasta la frontera con Costa Rica— Estrategia y Negocios
China entrega a Panamá estudio para construir un tren hasta Chiriquí— En Segundos
Delegación china visitará Argentina para conversar sobre demorado acuerdo por planta nuclear: fuente Gobierno argentino— Reuters
Argentina sostiene que recibirá a una delegación china para conversar sobre demorado acuerdo por planta nuclear— América Economía
China and Argentina resume talks for the construction of a nuclear power plant— MENAFN
O que falta a China fazer?— Brasil de Fato
Ahora, Argentina podrá exportar miel a China— Revista Chacra
Firmas chinas ponen atención al Tren Maya: embajador — El Financiero
Korea — LAC
Grimaldo propone a Corea establecer en la ZLC centro de distribución— La Estrella de Panamá
Japan — LAC
India — LAC
ASEAN & Oceania — LAC
Chile edges closer to Vietnamese market access for apples, cherries— Fresh Fruit Portal
Singapore’s GIC ‘hopeful’ on Brazil— The Malaysian Reserve
GCC — LAC