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Latin America: China's power play right under the U.S.
by Patrick Gillespie @CNNMoney
February 11, 2016: 9:03 PM ET
Peru, surpassing the United States in recent years.

The United States still has a greater economic presence than China in Latin America. The United States' exports to Latin America in 2014 were worth three times more than those that China sent to the region. But China is gaining ground fast and chipping away at America as a superpower.

"What [the Chinese are] going for is influence -- strategic power in the region to create dependence," says Ilan Berman, vice president at American Foreign Policy Council. American "influence has steadily retracted."

Americans are certainly retracting their cash out of Latin America. U.S. investors pulled out $700 million from Latin America last year, according to EPFR.

China - Latin America eye stronger ties

There's reason to believe China will fill that investing gap even more in 2016. China, Brazil and Peru want to create a train that would stretch 3,300 miles from the Atlantic coast of Brazil to the Pacific side of Peru. That's the distance from Miami to Seattle.

"This is an extremely ambitious project," says Myers.

China increased its investment last year while its economy had its worst growth in 25 years. Meanwhile, Latin America's economy fell into recession, driven by low commodity prices and political instability in Brazil and Venezuela.

Some of China's investments were prompted by the region's problems. It loaned $10 billion toVenezuela, one of China's key sources for oil. China has loaned more money to Venezuela than any other country in Latin America. That hasn't helped Venezuela: its economy is in a severe crisis, according to its government.

Why China is growing close to Latin America:

China and Latin America fit well together despite their recent economic turmoil. China needs raw materials like iron, oil, soy and all types of food. Latin America has lots of that.

China also uses its investment in Latin America as a source of jobs for Chinese workers. Many of the infrastructure projects in Latin America that China finances come with a caveat: Chinese workers get the job.

Latin America obliges because its desperate for the investment and credit China provides.

China also holds an advantage over the U.S.: it doesn't want to intervene in politics or tell leaders how to govern. That's a stark contrast from the U.S., which has a long history of intervening in Latin American politics.

The relationship isn't perfect. China has run into many roadblocks and challenges in Latin America, forcing projects to be suspended or even canceled.

But that's not souring these budding ties.

"China underestimated challenges that it would face in the region," says Kevin Gallagher, a Boston University professor and China-Latin America expert. But "while the rest of the investment community has turned sour on Latin America, China is doubling down."



CNNMoney (New York)First published February 11, 2016: 9:03 PM ET

Latin America: China's power play right under the U.S. - Feb. 11, 2016

 

[C130]

Latin America is a basket cast.

China has loaned Venezuela $50+ billion dollars in the last ten years and look at thestate they're in.
about to default while still owing China $15+ billion dollars in oil (400,000 to 800,000 bpd)

the best thing China can do is annex all of Latin America and govern/run it themselves

but nonetheless this is all good for China not so much for Latin Americans.


China loans them money, finances, and builds the railroads/hydro dams whatever, but these countries are stilled ran by corrupt politicians and murder and crime is the highest in the world, and this will not change anytime soon.


Latin America is like the second Africa for China!! just a place to get natural resources and build infrastructure projects.

China doesn't want anything to do with the politics of area and rightfully so. nothing but trouble and not good for business.

 

[Aepsilons]

China overtakes West in development funding to Latin America

WASHINGTON — The China Development Bank’s $395 million loan to Costa Rica for expanding the highway that links San José to the Caribbean port of Limón is part of a dramatic surge in Chinese financing across Latin America.

Last year, despite sluggish economic growth in China that has made worldwide headlines, funding from the state-run China Development Bank (CDB) and the Export-Import Bank of China reached a near-record $29 billion — nearly triple the amount loaned in 2014. That amount is more than last year’s funding from the World Bank and the Inter-American Development Bank (IDB) combined.

“While Western development banks have been on the retreat, Chinese banks have doubled down,” said Kevin P. Gallagher, co-director of Boston University’s Global Economic Governance Initiative (GEGI).

Gallagher, speaking at a Feb. 11 conference organized by the Washington-based Inter-American Dialogue, said that in 2015, World Bank lending to the region fell 5 percent to $8 billion, while IDB lending dropped by 14 percent to $11.5 billion.

“The U.S. Ex-Im Bank, which the region usually relies on for $2-3 billion a year, was dormant and controversial, and absent from the scene,” said Gallagher, who runs GEGI with his Chinese colleague, Fei Yuan.

At the same time, Gallagher said, “2015 saw the establishment of $35 billion worth of multilateral financing platforms for Latin America, a $20 billion China-Latin America Industrial Investment Fund, $10 billion in special loans by the CDB for Latin American infrastructure, and $5 billion in new finance from the China-Latin America Cooperation Fund.”

Margaret Myers, director of the Inter-American Dialogue’s China and Latin America Program, and Kevin Gallagher, co-director of Boston University’s Global Economic Governance Initiative, share a Feb. 11 panel in Washington DC on Chinese government bank financing in Latin America.

Larry Luxner/The Tico Times

According to GEGI’s latest estimates, CDB and the Export-Import Bank of China have loaned upwards of $125 billion to the region since 2005. Last year’s total was topped only by lending in 2010, when the total exceeded $35 billion.

As in previous years, the bulk of loans in 2015 from Chinese government banks to the region went to four countries: Argentina, Brazil, Ecuador and Venezuela. Last year, those four countries accounted for 95 percent of total Chinese lending to Latin America, with 34 percent — or around $10 billion — going to economically troubled Venezuela, which like Ecuador has weaker access to global capital markets.

Yet last year also marked a first: Costa Rica and the Caribbean island of Barbados received financing from Chinese state banks for the first time. Barbados got a small commercial loan from China Eximbank to rehabilitate the historic Sam Lord’s Castle Hotel — which will open in 2018 as a Wyndham Grand Resort — while financing to expand Costa Rica’s Route 32 finally won approval after contentious debate by Costa Rican lawmakers.

“Absolutely this has a lot to do with the fact that Costa Rica is the only country in Central America that officially recognizes the PRC [People’s Republic of China] over Taiwan,” said Margaret Myers, director of Inter-American Dialogue’s China and Latin America Program, in answer to a question from The Tico Times.

“Costa Rica has a free-trade agreement with China and has received some gifts from China, including construction of a stadium and offers of financing,” she explained. “This roadway is one; there’s also talk of financing a refinery, but there’s been very little progress made on that at all. But the highway has marched forward.”

Feh Yuan, co-director of Boston University’s Global Economic Governance Initiative, speaks Feb. 11 at an Inter-American Dialogue event in Washington DC on Chinese government bank financing in Latin America.

Larry Luxner/The Tico Times

The proposed $1.3 billion upgrade to the Moín refinery, located on Costa Rica’s northern Caribbean coast, was to have received $900 million in Chinese financing. But that project has stalled amid political disputes, Boston University’s Yuan said.

“It has not been approved because lawmakers protested [over] the environmental and social impact,” she said. “Costa Rica has been very cautious about establishing deeper financial ties with Chinese companies and banks. For countries like this that have higher environmental standards, there’s a long road ahead.”

Even so, the Inter-American Dialogue’s Myers explained, “countries that do not recognize the PRC, specifically Honduras and Guatemala, have received more money on the table than Costa Rica has. But Costa Rica is the only one where we see any examples of state-to-state financing.”

Across Latin America, China’s focus is on infrastructure projects — especially those that will benefit China, such as a proposed 3,300-mile, $10 billion railway to carry China-bound commodities from Rio de Janeiro to Peru’s Pacific port of Arequipa.

Myers cited several reasons for Beijing’s sudden interest in the region. First, the Chinese are developing increasingly stronger ties with Latin American governments. Second, CDB and Eximbank received injections of base capital in 2015 — “and this is in stark contrast to the World Bank and the U.S. Ex-Im Bank,” she said.

“In addition, overseas opportunities look a lot more fruitful than opportunities at home,” given China’s domestic stagnation and financial instability, she said. “There are more possibilities abroad as exchange rates go down. A lot of companies and projects are put on the auction block.”

Moreover, China has found itself overexposed, and the Washington-based international financial institutions are retreating, largely because rising U.S. interest rates have triggered considerable capital outflows and Chinese banks aren’t as burdened by credit rating agencies as their counterparts in the United States.

“Western development banks are not providing much financing,” she said, “so they’re calling everyone they can, and the Chinese are answering the phone.”



China overtakes West in funding to Latin AmericaThe Tico Times

 

[Shotgunner51]

As in previous years, the bulk of loans in 2015 from Chinese government banks to the region went to four countries: Argentina, Brazil, Ecuador and Venezuela. Last year, those four countries accounted for 95 percent of total Chinese lending to Latin America, with 34 percent — or around $10 billion — going to economically troubled Venezuela, which like Ecuador has weaker access to global capital markets.

Yet last year also marked a first: Costa Rica and the Caribbean island of Barbados received financing from Chinese state banks for the first time.

I hear two words: Commodities, Infrastructures.

Vision: China-Latin America FTA

Vision on the Global South | Page 4

 

[Steve781]

Does most of Latin America need development aid? I imagine Central America might but countries like Mexico, Brazil and Argentina certainly don't.

 

[Shotgunner51]

Does most of Latin America need development aid? I imagine Central America might but countries like Mexico, Brazil and Argentina certainly don't.

Take Brazil as an example, the largest in the region, as an example, the situation is certainly serious. Output is contracting (shrank 4.08% in 2015), fiscal revenues are faltering, and the budget deficit exceeds 9% of GDP. Inflation has surpassed the double-digit mark, forcing the central bank to raise interest rates – an approach that is unsustainable, given the deepening recession and the ballooning cost of servicing Brazil’s rapidly growing debt, citing Brazil has the worst Net IIP in the region (Net liabilities of $731.384 billion as of Dec 2015).

Brazil’s creditworthiness deteriorating fast, interest-rate spreads on its sovereign debt are reaching Argentine levels. And its international reserves position of $370 billion (end 2015), which once seemed unassailable, looks increasingly vulnerable. When the notional value of foreign-exchange swaps ($115 billion) is netted out, the share of short-term public debt (foreign and domestic) covered by international reserves is below the critical threshold of 100%.

At the beginning of last year, when Rousseff’s second presidential term officially began, her administration’s priorities were clear: implement a credible fiscal-adjustment program that would take the primary budget balance (which excludes interest payments) comfortably back into surplus and reduce the growth rate of public debt to sustainable levels. Rousseff soon appointed an economic team associated with fiscal orthodoxy to lead the effort. But the situation has only deteriorated, owing to the end of the commodity boom, sustained current account deficits, tighter international financial conditions, weak global growth, and a years-long legacy of policy mismanagement like the Petrobas scandal.

Without market credibility, interest rates and credit spreads will remain high and hijack the fiscal-adjustment effort, forcing the economy into a downward spiral. Brazil is in trouble, external helps are needed be it IMF, China or whoever applicable. Similarly for other smaller but equally troubled commodity-driven economies in the region, Argentina included.

 

[yoshi.oda]

Does most of Latin America need development aid? I imagine Central America might but countries like Mexico, Brazil and Argentina certainly don't.

I thinking Latin America need aid now more cuz of urbanization process now. Lacking investment and I thinking WB IMF giving too many barrier to funding , China AIIB or even ADB can tap. China having upper hand, more money. China now like Japan of 1980,1990, much money now.

I hear two words: Commodities, Infrastructures.

Vision: China-Latin America FTA

Vision on the Global South | Page 4

So CNLA FTA can counter TPP...!

 

[TaiShang]

LatAm to power up with capital from China
July 29, 2016

The sluice gates of the Three Gorges Dam. [Photo/Xinhua]


China Three Gorges Corp is to deploy more resources and manpower in both the Brazilian and the wider Latin American infrastructure markets over the next five years, as governments there offer more access to foreign companies to help boost their economies, its regional head said on Thursday.

CTG, the world's biggest hydropower producer by generating capacity, officially took over the management and operation rights of two Brazilian hydroelectric power stations earlier this month. The plants, Ilha Solteira and Jupia, have total installed capacity of 5 million kilowatts.

Li Yinsheng, general manager of CTG Brazil, said his company's operations would cover 10 states in Brazil in the long term, playing an important role in the nation's clean-energy sector and contributing to the development of Brazil's hydroelectric industry and overall economic growth.

CTG has so far invested in seven hydropower projects and 11 wind power projects in Brazil. The company has offered training to its Brazilian employees and selected a number of them to go to China for advanced courses.

The Chinese company successfully bid $3.7 billion at an auction, gaining 30-year concessions to operate the Ilha Solteira and Jupia power plants. They are CTG's biggest overseas acquisition so far, making the utility the second-largest power generator in Brazil.

The concession period was backdated to start in January. From 2017, 70 percent of the electricity to be generated will be sold on the regulated market and the rest on the free market. The price will be adjusted annually to factor in inflation.

"As the largest economy in Latin America, Brazil is endowed with abundant resources, huge market demand, and mature electricity and market systems," Li said.

CTG is not alone in the country. State Grid International Development Ltd, a wholly owned subsidiary of State Grid Corp of China, also plans to buy a 23 percent stake this month in Brazil's biggest power distributor－CPFL Energia SA－from Brazilian builder Camargo Correa SA for 5.85 billion reals ($1.8 billion).

"This project will create a bigger demand for electricity equipment and steel and push Brazil to update its power infrastructure," said Feng Yaoxiang, spokesman for the China Council for the Promotion of International Trade.

 

[ahojunk]

Xi congratulates opening of China, Latin America business summit
2016-10-14 13:57 | Xinhua | Editor: Xu Shanshan

President Xi Jinping sent a congratulatory letter to the 10th China-LAC Business Summit, which began Friday in the northern city of Tangshan in Hebei Province.

In the letter, Xi said that the summit will help boost communication between businesses, promote business and trade cooperation between China and Latin American countries, and will help improve China-Latin America ties.

Noting that China-Latin America cooperation has set sail smoothly, Xi said the two sides are committed to the comprehensive cooperation partnership, which features equality, mutual benefit and common development.

The president said the summit will facilitate cooperation and common development and benefit the Chinese and Latin American people.


********

3 Meetings occurring simultaneously:-
BRICS meeting in Goa, India.
The Portuguese Speaking Countries meeting in Macao.
China Latin America business summit in Tangshan.

 

[ahojunk]

Chinese vice president attends China-LAC business summit
2016-10-15 11:34 | Xinhua | Editor: Wang Fan

​

Chinese Vice President Li Yuanchao delivers a speech at the 10th China-Latin America and Caribbean (LAC) Business Summit in Tangshan, north China's Hebei Province, Oct. 14, 2016. (Xinhua/Yang Shiyao)


Chinese Vice President Li Yuanchao on Friday attended the 10th China-Latin America and Caribbean (LAC) Business Summit in the northern city of Tangshan in Hebei Province and delivered a speech.

Since the summit's creation in 2007, it has become an important platform for mutually beneficial cooperation and common development of China and LAC nations, Li said in the speech.

He said he hopes the two sides can consolidate their traditional friendship and continuously enhance mutual understanding.

Both sides should also optimize trade structure and promote production cooperation, as economic and trade cooperation is a pillar for China-LAC relations, Li said.

China-LAC trade volume rose more than twentyfold during the past decade to reach 236.5 billion U.S. dollars in 2015.

Li also stressed the improvement of people-to-people exchanges in multiple fields, including education, culture, sports and tourism.

On Friday, Li also met with President of Uruguay Tabare Vazquez, who attended the summit and delivered a speech, and other guests from LAC countries.

 

[ahojunk]

China, Latin America business summit concludes
2016-10-16 08:56 | Xinhua | Editor: Huang Mingrui

The 10th China-Latin America and Caribbean (LAC) Business Summit closed Saturday in Tangshan, a port city in north China's Hebei Province, with a number of cooperation documents signed.

The two-day summit was attended by more than 1,500 representatives from international organizations, government departments, trade promotion agencies, chambers of commerce as well as companies from China and Latin American countries.

Altogether 64 deals for cooperation and MOUs were signed.

The representatives also reached consensus on 19 projects for cooperation between Chinese and Latin American businesses, covering diverse fields including cultural exchanges, mining, energy, infrastructure construction, and smart agriculture.

About 1,300 trade talks were held among businesses during the summit, covering food processing, electronics, information technology, textile, wind energy, tourism, finance, legal services, botany and fishing industries, said Wang Jinzhen, vice chairman of China Council for the Promotion of International Trade.

Wang said he expected the dialogues to help Chinese companies expand exports and enable Latin American businesses to explore the Chinese market.

On the sidelines of the summit was an industrial exhibition in Tangshan Friday. Twenty-five Chinese companies set up booths to present state-of-the-art developments in energy, automaking, steel and iron, building materials, communication, heavy industries and high speed railways.

The next summit will be in Uruguay.

 

[ahojunk]

Xi's LatAm tour to deepen China-LatAm cooperation, promote Asia-Pacific common development
2016-11-12 12:04 | Xinhua | Editor: Li Yan

Chinese President Xi Jinping's upcoming tour to Latin America is expected to promote friendship and cooperation between China and the region and accelerate integration in the Asia-Pacific.

Xi will visit Ecuador, Peru and Chile from Nov. 17 to 23 and attend the 24th Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting from Nov. 19 to 20 in Lima, Peru.

Experts say Xi's trip will inject dynamism into the development and prosperity of China, Latin America and the Asia-Pacific.

DEEPENING FRIENDSHIP WITH LATIN AMERICA

Xi's trip to Latin America, which will be the third since he took office in March 2013, is expected to deepen traditional friendship between China and the continent and consolidate the public opinion basis of China-Latin America relations.

Xi's visit to Ecuador is the first by a Chinese president since the two countries forged diplomatic ties 36 years ago.

In Ecuador, Xi will exchange views with President Rafael Correa on bilateral ties. The two presidents will also witness the signing of a series of deals, meet with the press and attend a launch ceremony of an assistance program.

The two heads of state will blueprint the future of bilateral relations from strategic perspectives, which will promote the China-Ecuador strategic partnership to a new height.

In January 2015 in Beijing, Xi and Correa decided to establish a strategic partnership between their countries. Since then, bilateral ties have entered a new phase of all-round rapid development.

Now, China is Ecuador's third-largest trading partner and Ecuador is one of the main destinations for Chinese investment and financing in Latin America.

Ecuadoran Foreign Minister Guillaume Long said that all sectors of the Ecuadoran society are looking forward to Xi's visit and that the historic visit will further deepen the brotherly friendship between the two peoples.

Peru is the second leg of Xi's visit. China and Peru, both with ancient civilizations, have enjoyed deep friendship. More than 400 years ago, maritime routes between China and Peru were explored, starting trans-oceanic exchanges.

Peru's close ties with China gives the country a pivotal role in promoting China-Latin America ties.

China has become Peru's largest trading partner and largest export market, while Peru is one of the first countries with which China conducted international cooperation in production capacity.

During his stay in Peru, Xi is expected to hold talks with President Pedro Pablo Kuczynski and deliver a speech at the Peruvian Congress.

Chile, the last leg of Xi's visit, has always led in developing relations with China. It is the first South American nation that forged diplomatic ties with China, the first Latin American country that signed a bilateral accord with China on China's joining the World Trade Organization and signed a free trade agreement with China.

Last year, the first clearing bank for transactions in renminbi in South America was opened in Chile's capital, Santiago.

Xi's visit is expected to upgrade the China-Chile strategic partnership.During his stay in Chile, he is scheduled to hold talks with Chilean President Michelle Bachelet, attend a signing ceremony for agreements and meet with the press.

In the eyes of Liu Yuqin, former Chinese ambassador to Ecuador and Chile, Xi's Latin America tour has fully reflected that the Central Committee of the Communist Party of China (CPC) with Comrade Xi Jinping as the core holds a perspective of the overall situation in China's diplomatic strategy.

"China-Latin America relations have made a great stride since the 18th CPC National Congress in 2012. Elevating the strategic position of policies toward Latin America and including Latin America in China's diplomatic strategy priorities accord with the common interests and realistic demand of both parties," Liu said.

FURTHERING CHINA-LATIN AMERICA ALL-ROUND COOPERATION

Ernesto Samper, secretary-general of the Union of South American Nations, said Latin American countries eagerly anticipated Xi's visit. He believed that the visit would greatly promote economic and trade cooperation between China and Latin America and strengthen bilateral all-around cooperation.

In fact, China and Latin America have made great progress in furthering their all-round cooperation in recent years.

In July 2014, Xi and leaders of Latin American and Caribbean countries held a summit in Brasilia, during which both sides decided to establish the China-Latin America comprehensive cooperative partnership of equality, mutual benefit and common development.

In January 2015, the first ministerial meeting of the forum of China and the Community of Latin America and Caribbean States was held in Beijing. Xi attended the meeting and made an important speech.

In 2016, China-Latin America relations have moved forward with the setup of new platforms such as the China-Latin America cultural exchange year and the forum of China-Latin America cooperation between local governments.

Official statistics show that the trade volume between China and Latin America rose more than twentyfold during the past decade to reach 236.5 billion U.S. dollars in 2015.

Currently, China is the second-largest trade partner and third-largest investment source country of Latin-America, while Latin America is China's seventh-largest trade partner.

Although bilateral trade has been affected by a sluggish global economy and the fall in commodity prices, both parties have been optimizing trade structure, diversifying areas for investment and transforming the model of economic and trade relations from one that used to be led only by trade to one driven by trade, investment and finance.

Now, China and Latin America are facing a new task of comprehensively upgrading their cooperation. Meanwhile, the development of bilateral ties has attracted much attention amid some changes in Latin America.

Against such backdrop, Xi's Latin America trip will deliver China's confidence in the stable development of the continent and send a signal of the bright prospects for bilateral cooperation.

"During Xi's visit, China will put forward a blueprint to enhance China-Latin America economic and trade cooperation. Latin America, which is under the pressure of economic transformation, needs China's market, production capacity, capital and experience in construction. China's proposal will be welcome," said Chen Fengying, an economist with China Institutes of Contemporary International Relations.

ACCELERATING ASIA-PACIFIC INTEGRATION

Under the theme of "Quality Growth and Human Development," the 21 APEC members will seek to make decisions to facilitate trade and investment as well as consolidate liberalization policies at the Peru summit.

Xi is expected to deliver a speech to the APEC CEO summit, meet representatives of the APEC business advisory council, attend two phases of the economic leaders' meeting and have meetings with some leaders.

China has grown into an important leader in Asia-Pacific cooperation.

During the 2014 APEC summit in Beijing, APEC member economies pushed forward the process of the Free Trade Area of the Asia-Pacific (FTAAP) by sketching out a historic roadmap for FTAAP.

The meeting also adopted important documents for an integrated, innovative and interconnected Asia-Pacific.

Now, the Beijing consensus is becoming reality, with the FTAAP process being carried forward orderly. A collective strategic study on issues related to the realization of FTAAP has been completed and the final version of the study along with recommendations will be presented to leaders at the Peru summit.

"I believe that Xi's attendance at the meeting will greatly promote the implementation of the fruits yielded at the Beijing summit and push forward FTAAP and connectivity from the highest level to make vision come true," said Chen, the Chinese economist.

 

[ahojunk]

LatAm should actively participate in Belt and Road: Chilean ambassador
2016-11-12 09:56 | Xinhua | Editor: Li Yan

Latin American countries should actively participate in the Belt and Road Initiative as an effective way to boost south-south connection and cooperation, Chilean ambassador to China Jorge Heine told Xinhua.

Jorge made the remarks ahead of Chinese President Xi Jinping's week-long state visit to Ecuador, Peru and Chile from Nov.17 to 23. During the visit, Xi will attend the 24th Asia-Pacific Economic Cooperation Economic Leaders' Meeting from Nov. 19 to 20 in Lima, capital city of Peru.

"Chinese capital and technology will help Latin America improve its infrastructure, industry and connectivity," Jorge said, adding that Chile hopes to attract Chinese investment and boost cooperation with China in digital technology.

Official data showed that two-way trade volume between China and Chile reached over 31.885 billion U.S. dollars in 2015.

"The Belt and Road Initiative and Xi's upcoming visit is of great significance and will boost two-way cooperation in politics, economy and trade, as well as culture," the ambassador said.

China and Chile have maintained close relations for a long time. Chile was the first South American nation to forge diplomatic ties with China, the first Latin American country to acknowledge China's complete market economy status and the first to sign a free trade agreement with China.

The Belt and Road Initiative, consisting of the Silk Road Economic Belt and the 21st Century Maritime Silk Road and proposed by Xi in 2013, has brought together over 100 countries and international organizations in Asia, Europe and Africa via land and maritime networks.

The initiative is part of China's efforts to provide public goods and honor international responsibilities that are commensurate with its status as a global power.

 

[TaiShang]

Xi to promote FTA on Latin America trip
By Chen Heying
Source: Global Times Published: 2016/11/15 0:33:39

Chinese President to pay third visit to continent
Chinese President Xi Jinping's forthcoming visit to Latin America will restructure bilateral trade and promote a free trade agreement at a time when both sides are undergoing pressure from an economic downturn, experts said.

Xi will visit Ecuador, Peru and Chile from November 17 to 23 and attend the 24th Asia-Pacific Economic Cooperation (APEC) Economic Leaders' Meeting on November 19 and 20 in Lima, Peru. It will be Xi's third visit to the continent since he took office in March 2013.

As the trade volume between China and Latin America has continued to decrease, it is necessary to change the trade structure, Xu Shicheng, a research fellow in Latin American studies at the Chinese Academy of Social Sciences, told the Global Times.

"The second white paper on developing China-Latin America ties is likely to be issued during Xi's trip after the first was released in 2008 now that the economic situation has changed greatly," a Beijing-based expert close to the foreign ministry, who asked for anonymity, told the Global Times.

The Chinese economy has changed to a "new normal" of maintaining medium-to-high speed of growth. Annual GDP growth for the 2016-2020 period must maintain at a level of at least 6.5 percent, Xi was quoted by the Xinhua News Agency as saying in November 2015.

The Economic Commission for Latin America and the Caribbean set its economic growth projections for the region for 2016 at an average contraction of -0.9 percent.

Xu said that some Latin American nations that need to adjust their economic structures and enhance industrialization are expected to grab the opportunity to cooperate with China.

One focus is production capacity cooperation at a time when China is suffering from overcapacity, Yang Zhimin, a researcher with the Institute of Latin American Studies at the Chinese Academy of Social Sciences, told the Global Times.

Echoing Yang, Xu said bilateral trade also needs to be restructured, to shift from China buying oil and minerals to trade in high added-value mineral products and information technology, considering the decreasing trade volume.

Trade volume between China and Latin America was $99.2 billion between January and June, a plunge of 11.3 percent compared with the same period last year, Xinhua reported in August. It is another plunge after a 10.2 percent year-on-year decrease in 2015 from 2014.

"China wants to import more high added-value products, instead of just primary commodities," Xu said.

Peruvian President Pedro Pablo Kuczynski said his government not only welcomes Chinese investment in mining, but in ore smelting and mineral products, news site china.com.cn reported.

Facing uncertainties

Xu said free trade agreements China signed respectively with Peru and Chile are expected to be upgraded during Xi's visit this time, to expand trade and investment.

Peru and Chile are both signatories to the US-led Trans-Pacific Partnership (TPP), however, the fate of this trade bloc faces uncertainties in the wake of the US presidential election. Yang pointed out that Peru and Chile are also members of the Pacific Alliance, the most active trade bloc in South America, and that they will be willing to promote a free trade agreement signed by Pacific-rim countries.

Against increasing anti-globalization sentiment, it is time to retable discussions on an Asia-Pacific Free Trade Area (FTA), Teng Jianqun, director of the Department for American Studies at the China Institute of International Studies, told the Global Times.

"It is particularly significant to promote an Asia-Pacific FTA as US president-elect Donald Trump has vowed to scrap the US-led TPP that excludes China and Russia," Xu said.

At the 2014 APEC meeting held in Beijing, APEC member economies reached consensus on starting the Asia-Pacific FTA, Xinhua reported.

"[The TPP] can be replaced with a similar deal, but without the US," Kuczynski, a fervent free-trade supporter told Russia Today on Friday. "I think it'd be best to have an Asia-Pacific deal that includes China, and includes Russia as well ... it'd have to be a new negotiation."

 

[Shotgunner51]

How Important Is Latin America on China’s Foreign Policy Agenda?

Putting Xi Jinping’s upcoming visit to South America in context

By Shaheli Das, November 16, 2016

First China-CELAC Forum ministerial meeting concludes in Beijing last year (January 2015)​

In the light of the forthcoming visit of President Xi Jinping to the South American nations of Ecuador, Peru, and Chile, it’s timely to ask: how important is Latin America as a whole to China’s foreign policy agenda? Although trade ties between the two date back to the 1570s, bilateral relationships between China and regional countries remained considerably limited. Along with Beijing’s perception of the region as an integral part within the U.S. sphere of influence, factors such as geographical distance, cultural ignorance, and economic incompatibility had greatly restricted the relationship till the recent past.

Previously, Chinese scholars and foreign policy analysts were of the opinion that the Monroe Doctrine prevailed in the region. The Monroe Doctrine, articulated by U.S. President James Monroe in 1823, asserted U.S. hegemony over its southern neighborhood by telling other powers of the time to stay out. Quite unlike the past, however, in recent years China’s presence in the U.S. “backyard” has profoundly increased due to a number of factors.

• First, China’s foreign policy has undergone a visible shift, from Deng Xiaoping’s dictum “lie low and bide your time” to a strategy of power projection and active engagement under President Xi Jinping. Although the region of Latin America is not strategically as important to China as South Asia or East Asia, bonhomie between the two sides has considerably increased in recent years along with China’s more active outreach.

• Second, the ongoing Sino-U.S. power transition and America’s close engagement with allies in Asia as well as new partners such as India and Vietnam has in a way driven China into Latin America in order to counterbalance the United States.

• Third, China seeks to fulfill its commercial interests. Latin America possesses a wealth of natural resources, which are crucial to China’s brisk economic development. China, for its part, seeks to obtain raw materials and diversify the source of such imports. In fact, the Chinese Ministry of Commerce has identified Latin America along with the Middle East/Africa and Russia/Central Asia as the three chief areas that are likely to become net energy suppliers for Beijing. Beijing also wants to sustain its access to overseas markets in order to secure the export of Chinese manufactured products. Bilateral trade between China and Latin America stood at $263.6 billion in 2014.

• Fourth, China has significant geopolitical interests in the region. Although the Chinese government articulates its will to establish a cooperative relationship with the region, the White Paper on Latin America and the Caribbean published in 2008 clearly states that “the one China principle is the political basis for the establishment and development of relations between China and Latin America.” Currently, of Taiwan’s 22 diplomatic allies, 12 are found in Latin America and the Caribbean, more than in any other region.

• Fifth, China adheres to the principle of multipolarity and the idea of multilateralism. To accomplish this objective, Beijing requires a network of allies from the Global South, including Latin American nations. In order to shore up the country’s bonhomie with the region, China has used the Global South or developing countries card. China claims that the country shares a common history with most developing nations, resulting in better understanding and shared demands and desires. Also, reinforcing solidarity on these grounds denotes that China combines patriotism with Marxist internationalism in its foreign policy.

Apart from bilateral commercial and political engagements, Beijing also engages with Latin American countries in various multilateral platforms such as the China-Community of Latin American and Caribbean States (CELAC) Forum, United Nations, Organization of American States (OAS), G5 group (Brazil, China, India, Mexico, and South Africa), BRICS group (Brazil, Russia, India, China, and South Africa), and the BASIC group (Brazil, South Africa, India, and China). Further, the number of high-level bilateral visits evidently indicates the importance Latin America enjoys in China’s foreign policy agenda. Between 2000 and 2015, Chinese premiers and presidents visited the region as many as 31 times, with Brazil, Argentina, Chile, and Cuba figuring as the top destinations.

China’s rising bonhomie with Latin America has clearly altered the geopolitics of the region and tendered a strategic challenge to the United States. Above all, China’s inroads into the region have questioned the validity of the Monroe Doctrine there. Although there remains a significant question as to whether Sino-Latin American ties can be defined as a win-win relationship, the region will definitely emerge as a testing ground between China and the United States in the forthcoming years.


http://thediplomat.com/2016/11/how-important-is-latin-america-on-chinas-foreign-policy-agenda/