South American Economics/China-Latin American Relations Thread

[luminary]

Any more info on the stance of the right wing party in Chile? I did a quick internet search and couldn't find anything that makes them explicitly anti-China, instead I found the past relations to be cordial.

Just from surveys, it looks like Colombia on both sides has

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. You're right, right wing party has also been the traditional party in power and has had good relations.

The technology of Chinese goods is considered positive by over 75% of respondents. 56% of respondents positively assessed the prices of Chinese goods, while 46% did so for their quality.

China’s political relationship with the Gustavo Petro administration have grown, built off the advances made under the right-wing presidencies of Juan Manuel Santos and Iván Duque.

However, Petro and left-wing party have special impetus to deepen ties with China, as there is growing antagonism between Leftist President Petro and the U.S. Republican Party. Left wing party more motivated to deepen Chinese ties in strategic industries like energy, mining, port infrastructure, and digital infrastructure.

 

[KYli]

Not sure if Brazil currency is strong enough to absorb the impact of associating with much weaker currencies in Argentina.

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[Strangelove]

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China and Argentina sign cooperation plan to jointly promote construction of Belt and Road

Initiative not ‘hollow’ but takes concrete measures to benefit local people

By GT staff reporters Published: Jun 02, 2023 11:55 PM

China Argentina Photo:VCG
China and Argentina on Friday signed a cooperation plan in Beijing to jointly promote the construction of the Belt and Road Initiative (BRI), a move that will further deepen bilateral economic and trade cooperation.

A Chinese expert said that the cooperation plan will be of "exemplary significance" to major Latin American countries that have not yet signed the Memorandum of Understanding (MoU) with China, and the plan also highlights the fact that BRI is an international public product with concrete measures that benefit local people.

The two sides will deepen cooperation in the fields of infrastructure, energy, economy and trade, finance, and people-to-people and cultural exchanges, according to the release posted on the official website of China's National Development and Reform Commission (NDRC) on Friday.

The cooperation plan is of great significance to the deepening of political mutual trust and strategic alignment between the two countries, and is conducive to promoting practical cooperation between the two countries in various fields, said NDRC.

The signing of the agreement is an implementation of the MoU signed between China and Argentina in 2022, and will further strengthen cooperation under the BRI in various fields, with more plans and projects expected, Zhou Zhiwei, an expert on Latin American studies at the Chinese Academy of Social Sciences, told the Global Times on Friday.

China and Argentina have signed an MoU on the BRI, according to a joint statement issued in February of 2022 after a meeting between top leaders of the two countries.

The two sides laid a framework for sustainable development and inclusive economic cooperation, so as to further promote actions and projects for deepening, innovating, and diversifying their economic relations and enhancing regional connectivity, according to the Xinhua News Agency.

They also studied bilateral trade cooperation and agreed to continue to expand trade, enhance financial support for China's export settlements to Argentina and actively encourage trade diversification, the statement said.

"The cooperation plan is of exemplary significance to major Latin American countries such as Brazil, Colombia, and Mexico that have not yet signed an MoU with China," Wang Youming, director of the Institute of Developing Countries at the China Institute of International Studies in Beijing, told the Global Times on Friday.

The signing of the cooperation plan with Argentina shows that the BRI is not a hollow initiative, but an international public product with substantial content, specific deployment and planning, Wang noted.

The signing of the cooperation plan plays an important role in promoting bilateral relations and bailing out the Argentine economy, Wang added.

The cooperation plan was reached as Argentine Economy Minister Sergio Massa made a trip in China, after he reportedly landed in Shanghai on Tuesday, and then headed to Beijing for meetings with Chinese officials including those from the General Administration of Customs (GAC), Ministry of Commerce (MOFCOM) and People's Bank of China (PBC) in Beijing.

PBC said on Friday that the two sides exchanged views on issues such as the economic and financial situation and the promotion of financial cooperation, while GAC said that topics such as the exports of Argentine agricultural and food products to China, and deepening customs inspection and quarantine cooperation are on the agenda.

On Thursday, Chinese Minister of Commerce Wang Wentao met with Massa in Beijing. Wang said China is willing to work with Argentina under the strategic guidance of the two heads of state to promote economic and trade exchanges and dialogues at all levels, deepen multilateral and bilateral pragmatic cooperation, and push for greater development of the China-Argentina comprehensive strategic partnership.

In addition, Massa also visited some companies including those in the field of power and lithium mining. Media reported that the two sides conducted in-depth discussions on topics including RMB settlements when visiting the lithium mining company.

According to media reports, Massa will seek an expansion of the nation's currency swap line during his trip to China.

Cooperation in the financial sector continues to be a focus, and it is an urgent matter for Argentina to continue obtaining a market share in China, which will help the Latin American country hedge against diminishing dollar reserves amid the current global de-dollarization push, Zhou said.

Argentina and China signed a 70 billion yuan ($9.9 billion) swap line agreement in 2009 and expanded it to 130 billion yuan in 2020. In January this year, the two countries formalized the expansion of a currency swap deal.

In April, Argentina reportedly announced plans to use the

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to pay for goods imported from China amid an emerging de-dollarization wave pushed by countries and regions in order to reduce reliance on the US dollar.

 

[Strangelove]

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Central banks of China, Argentina renew bilateral currency swap deal

By Global Times Published: Jun 10, 2023 02:15 AM

Photo:VCG

The Central banks of China and Argentina recently renewed their bilateral currency swap agreement with a size of 130 billion yuan/4.5 trillion Argentine pesos ($18.2 billion). The agreement is valid for three years, the People's Bank of China (PBC), China's central bank, said on Friday.

"Argentina is currently facing a severe shortage of foreign exchange reserves in US dollars, and it has an inflation rate of over 100 percent. The renewal of the currency swap agreement between China and Argentina will help support the troubled Argentine peso and ease its economic difficulties, while further deepening the economic and trade cooperation between the two countries," Zhou Zhiwei, an expert on Latin American studies at the Chinese Academy of Social Sciences, told the Global Times on Friday.

Analysts also said that the move can further pave the way for closer trade ties.

On June 2, Yi Gang, governor of the People's Bank of China, met with Argentine Economy Minister Sergio Massa and Central Bank Governor Miguel Pesce. They exchanged views on the economic and financial situation, and on how to promote financial cooperation and other topics, according to a statement posted on the PBC's website.

Also on June 2, China and Argentina signed a cooperation plan in Beijing to jointly promote the construction of the Belt and Road Initiative, a move that analysts say will further deepen bilateral economic and trade cooperation.

China's top economic planner said that the two sides will deepen cooperation in the fields of infrastructure, energy, economy and trade, finance, and people-to-people and cultural exchanges.

In January this year, China and Argentina expanded the currency swap deal. Meanwhile, governors of the central banks committed to deepening the use of the yuan in the Argentine market.

The first currency swap between China and Argentina was signed in 2009 and was worth 70 billion yuan, which was valid for three years.

In July 2017, China's central bank renewed the swap agreement with the Central Bank of Argentina. The agreement allowed the two central banks to swap 70 billion yuan for 175 billion Argentine pesos. A supplementary swap deal for 60 billion yuan was signed in December 2018, in addition to the agreement signed in July 2017.

China is accelerating the settlement of local currency trade with other Latin American countries, reflecting the efforts of both sides to maintain economic and trade stability and reduce the impact of volatility in international financial markets, Zhou said.

"This will also further promote the process of yuan internationalization, while providing developing countries with more currency options and a huge boost to the reform of the global monetary system," Zhou noted.

 

[luminary]

US attempts to roll back Chinese economic influence in LAC via military force:

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“There is a global political confrontation between the United States and China and Russia. Peru is key because we are located at a strategic point in the Pacific basin, a gateway for China and access point to Brazil’s huge market on the Atlantic seaboard. We are a hinge”, says Wilson Barrantes, former director of Peru’s National Intelligence Directorate (DINI).

US puppet dictator Boluarte chose to

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five days ago that she will not be calling general elections until 2026 — despite the fact she has repeatedly pledged to call new elections some time this year, has zero democratic legitimacy, is broadly despised by the public (14%-17% approval) and is under investigation for numerous human rights violations.

But Boluarte still enjoys the support of the US Embassy, and for the moment that is what counts.

Peru: “The Most Chinese Country in South America,” Until Now

Peru’s Ambassador to China during Pedro Castillo’s government, Luis Quesada, described China as the “most Chinese country in South America.” That was in July last year. At the time, there was even talk of upgrading China’s free trade agreement (FTA) with Peru. China is already Peru’s largest trading partner on both the exports and imports side while Peru is the second largest destination for Chinese investment in Latin America, behind only Brazil. A whopping 32% of Peru’s exports go to China, compared with just 12% to the US.

But according to the report in Hildebrandt en sus trece, citing other documents by Craig Faller, Washington’s soft-power arm USAID will also be playing a part in the US’ counter-offensive against China and Russia in Peru. The notes that USAID is investigating “foreign agents” in Peru, with a particular focus on “unethical” practices by Asian (read: Chinese) multinationals.

The companies that have so far been targeted

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China Railway Tunnel Group ― with whom the Ministry of Transport and Communications

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an $87 million contract ― and Cosco Shipping, which is under investigation by the Prosecutor’s Office for a landslide at one of the company’s tunnel construction sites at the $3.6 billion Chancay mega-port it is helping to build. Located 50 miles north of Lima, the port is expected to become (in the

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of Mercopress news agency) “a colossal infrastructure that will transform the 65,000 people former fishing village into a milestone of China’s increasing trade and influence in Latin America.”

Chinese companies have also invested huge sums in Peru’s mining sector over the past decade and a half. But US and European interest in Latin America’s strategic resources is also on the rise as the race for lithium, copper, cobalt and other elements essential for the so-called “clean” energy transition heats up. In recent months the region’s largest economies have received state visits from both Germany’s Chancellor Olaf Scholtz and EU Commission President Ursula Von der Leyen, who last week

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€10 billion of Global Gateway investments in Latin America and the Caribbean.

As readers may recall, Craig Faller’s successor at the helm of SOUTHCOM, General Laura Richardson, has been explicit about the US government’s intentions to “box out” China and Russia from strategic resources in Latin America. And while Peru may not form part of the Lithium Triangle (Bolivia, Argentina and Chile), it does boast significant deposits of the white metal. By

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, it is home to the sixth largest deposits of hard-rock lithium in the world. It is also the world’s second largest producer of copper, zinc and silver, three metals that are also expected to play a major role in supporting renewable energy technologies.

The problem is that Peru’s economy is hugely dependent on Chinese money for its mining industry and infrastructure projects, and that economy is — as Jalife put it — one of the few “fractals” that continue to provide some degree of stability. And while the US and NATO may offer guns and war, they cannot compete with China on investment or trade.

Another side benefit in bringing Peru into a NATO partnership is direct CIA access to Peruvian cocaine, easily considered to be as good, if not better, than Colombian cocaine. That would pretty much wrap up the two prime sourcers in the world.

 

[Strangelove]

Reported on EV thread already, cross post here for reference & record purposes.

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Edited by Ed Newman 2023-06-30 23:53:00

Bolivian state firm YLB's plant is seen at the Salar de Uyuni, a vast white salt flat at the center of a global resource race for the battery metal lithium

La Paz, July 1 (RHC)-- The Bolivian government has signed lithium agreements with Russian state nuclear firm Rosatom and China's Citic Guoan Group as the South American country looks to develop its untapped resources of the battery metal.

Minister of Hydrocarbons and Energy Franklin Molina said Thursday that the investments would allow the construction of two direct lithium extraction (DLE) processing plants in the towns of Pasto Grande and Uyuni Norte, where at least 45,000 tonnes of lithium carbonate would be produced per year.

"With these deals our country will be able to produce some 100,000 (metric) tons of lithium carbonate in 2025 in the Uyuni, Coipasa and Pasto Grandes salt flats," Molina said at an event in La Paz, the administrative capital of Bolivia.

The deals, which envisage total investment of $1.4 billion, follow a similar agreement in January with giant Chinese battery maker CATL, a potential win for Beijing in its efforts to lock in supply of the metal used in electric vehicles. CATL is the world's largest EV battery manufacturer but does not currently produce any lithium.

Russia’s Rosatom, which bid via its Uranium One Group unit, also confirmed the news, saying it would invest $600 million in the project, its first large-scale lithium venture overseas, with a planned annual capacity of 25,000 tonnes of lithium carbonate.

“There is the possibility of increasing capacity based on the results of geological exploration work,” Rosatom’s First Deputy General Director Kirill Komarov said in a statement.

Elsewhere in his remarks, Molina said Citic Guoan would invest $857 million and would also “look at investing in battery plants and the installation, possibly with technical studies, of a vehicle assembly plant, to create a true electric transport revolution”.

The deal with Uranium One Group was for feasibility and pre-investment studies, he said, adding that multiple tests with Russian technology on the salt flats had shown a lithium recovery rate of more than 80 percent, with a purity of approximately 99.5 percent.

The agreements could help finally unlock Bolivia's huge potential as a supplier of lithium for batteries needed to power the global shift to electric vehicle

Bolivia's iconic salt flats are home to the world's largest lithium resources at 21 million tons, according to the US Geological Survey, but the country has almost no commercially viable reserves.

In March, Bolivian President Luis Arce said he would be willing to jointly design a lithium policy with other Latin American countries to benefit their economies. "We must be united in the market, in a sovereign manner, with prices that benefit our economies, and one of the ways, already proposed by (Mexico's) President Andres Manuel Lopez Obrador, is to think of a kind of lithium OPEC," Arce said back then in a speech in La Paz.

The objective is to position Bolivia, Chile, Argentina and Peru "as potential promoters of new forms of energy storage that will make it possible to overcome the use of fossil fuels," the president added. Arce expressed concern about foreign meddling in the lithium business, in particular from the United States.

"We don't want our lithium to be in the Southern Command's crosshairs, nor do we want it to be a reason for destabilizing democratically elected governments or foreign harassment," he said.

Governments, mining firms, battery markets and carmakers worldwide are scrambling to secure a supply of the metal, which is needed for many of the batteries being used to power a big shift towards electric vehicles.

Demand for lithium, used in rechargeable batteries for cars and electronics, pushed prices for battery-grade metal to around $85,000 per tonne at the end of last year.

 

[luminary]

We get it. China is terrible at cultural and diplomatic exchanges, especially at a contemporary level.
Everything you see in the Confucius Institutes are about ancient Chinese history and nothing about what China is like now.

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In 2022, 39 percent of Chile’s total exports were to China, an increase of 5.3 percent from 2021, according to Chile’s Central Bank’s foreign trade 2022 fourth quarter

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. Beijing has been Santiago’s largest exporter since the end of 2007, and Chile’s largest importer since the end of 2014.

But the most important trade between the two countries is something intangible, said Fernando Reyes Matta, Chile’s former ambassador to China from 2006 to 2010, who is now the director at the

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at Andrés Bello University. “In the last 20 years, the most important product that China has exported to Chile is confidence,” he said.

A decades-long partnership​

China and Chile’s partnership dates back to the 1970s during the government of Salvador Allende, which made Chile the first South American country to establish diplomatic ties with China. Chile was also the first country outside Asia to sign the Free Trade Agreement with China in 2005.

By the end of

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, China overtook the US as Chile’s largest exporter country. And by the end of

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, China overtook the US as Chile’s largest importer. Since then, China has been Chile’s top exporter and importer, with the US coming in second.

But even as Chinese economic presence is tangible and influential in the South Andean country, on a societal level, Chileans still don’t understand much about China and its people, said

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, alternate director of the Millennium Nucleus on the Impacts of China in Latin America and the Caribbean. The Millennium Nucleus

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studies China’s impact in the region on national and domestic levels.

Santiago’s relationship with Beijing has grown in recent years, but the exchange has only been centered around economic relations, Montt said.

Montt is also a history professor at Pontificia Universidad Católica de Chile (PUC). She specializes in the cultural and diplomatic relations between Asia and Latin America. She said students don’t get enough exposure to Chinese study on every level in the Chilean education system. It’s important to study the different facets of China, Montt said.

The impact of China is huge, she said. “Not only in Santiago, but also in provinces and regions because China could have distinct impacts from different industries.”

China also has been expanding its soft power through establishing the Confucius Institute via partnership with universities around the world to promote cultural and language learning. There is a

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in Santiago in partnership with PUC.

“The Confucius Institutes only fills in one gap,” said Reyes. “I feel that it is only partial and in some way the things the Confucius Institutes talk about are not contemporary.”

The principal industry that China has to develop is the industry of credibility, Reyes said. China lacks transparency in showing the world how its societal and political system works, and Reyes has rarely seen Chinese officials speaking with media organizations in Latin America.

“China really needs to learn what the communication industry is in the contemporary world,” Reyes said.

 

[luminary]

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Honduras has revived the idea of building an interoceanic railroad, an initiative linking the Pacific coast to the Caribbean Sea.

The estimated US$20 billion project aims to transform the Gulf of Fonseca into a global commercial exchange hub and is expected to take over 15 years to complete.


Honduras’ Secretary of Economic Development, Fredis Cerrato, outlined that the country had expressed interest in financing and infrastructure investment for priority projects, including the interoceanic railroad, with China.

The project plans to link the mega-ports in Amapala and Puerto Castilla via rail, with a secondary connection from the southern zone to Puerto Cortés through the Dry Canal.

The Central American Bank for Economic Integration (CABEI) has previously announced financing for a feasibility study for the construction.

 

[KYli]

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[KYli]

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