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Travel to any country in Latin America and you will see the visible hand of China at work: a computer manufacturing plant in Mexico, a copper mine in Peru, a football stadium in Costa Rica. In the year 2007, the thought of China in Latin America would have appeared, at best, improbable. But in a three-year stretch, China signed free trade agreements with Chile, Peru and Costa Rica, inked billions of dollars worth of deals in oil and mining projects throughout the region, and supplanted the US as Brazil’s biggest trading partner. Once almost unseen in Latin America, China’s bilateral trade has risen from $12bn in 2000 to well over $150bn today.

Given the importance of its new Asian friend, Latin Americans are rolling out the red carpets to Chinese business delegations and jumping on planes not only to Beijing but also to Shanghai, Shenzhen, and Tianjin.

Rationale Behind Chinese Investments in Latin America [...]

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In line with China’s outbound investment strategies in Africa and Asia, China is now planning to create a $5 billion usd investment fund for Latin American investments.

The funds target investments will include, infrastructure (probably to help the Chinese get commodities out), agriculture, mining and energy.

Read more in Spanish from Argentinean DERF Agencia de Noticias.

Peru partners with other countries to seduce China at Expo Shanghai 2010

Peru organizes joint activities with Colombia, Brazil and United States at Shanghai World Exposition, in order to promote themselves better and attract capital and tourists.

Peru to be promoted as luxury tourist destination in Expo Shanghai

Peru’s Export and Tourism Promotion Board (Promperu) will participate in Asia Luxury Travel Market (ALTM), a Reed Travel Exhibitions show to be held in Shanghai, China, on June 14-18 within the framework of Expo Shanghai 2010 set to kick off on Saturday.

Peruvian pavilion at Shanghai Expo to attract some 40000 visitors on first day

Some 40000 visitors of different nationalities and ages are expected to visit the Peruvian pavilion at Shanghai World Expo, which officially opened today, May 1, Peru’s Foreign Ministry reported.

Wall Street Journal

The growing influence of Brazil and China in the world economy received further recognition this week when the most commonly used benchmark for emerging-market stocks increased the weighting of companies in those nations.

MSCI Inc’s MSCI Global Standard Indices said in its latest semiannual review this week that it will add 11 Brazilian companies to its MSCI Emerging Markets index at the end of the month, making Brazil the top gainer in the 22-country list. China was the second-highest gainer, with MSCI adding seven securities issued by companies in China and deleting one.

“A move like this further confirms our view of the importance of investing in small- and mid-cap names in emerging markets for investors. This increase in weighting also provides evidence that the extraordinary amount of [initial public offerings] to come out of Brazil over the past three years have, for the most part, been well received by investors,” said Ed Kuczma, an equity analyst at Van Eck Global in New York.

Brazil and China have been gaining a steady share of this marketplace segment, and MSCI is simply echoing the sentiment of many investors. “Our standard indices are just passive reflections of the market,” said Dimitris Melas, executive director in research for MSCI Barra in London.

“If China and Brazil continue to lead this [recent stock] rally, then you might see their weight and the number of companies increasing further,” he said.

Click here to read the complete story from the Wall Street Journal, by Riva Froymovich

“The negotiations are still in an initial phase, with a work group having been created with representatives of Brazil and China, who also met during the G-20 summit, in London,” explained a source.

The next step should be the visit of a Central Bank of Brazil delegation to China, “despite there being no forecast as to when it may come true,” said the source.

The work group should analyze the “results to be reached through an agreement that China recently established with Argentina” – the first country in South America to benefit from trade exchanges in the same currency with the Asian giant and with whom Brazil has also been developing the same program since September 2008.

The Central Banks of China and Brazil are also going to develop a “study of the potential bilateral trade volume to analyze the possibility of an agreement.”

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Written by Newsroom
Wednesday, 16 September 2009
[Source] – brazzilmag.com

a2a_linkname=”Studies to Eliminate Dollar in Brazil-China Trade Going Slow”;a2a_linkurl=”http://chinasouthamerica.blogspot.com/2009/09/studies-to-eliminate-dollar-in-brazil.html”;

Chinese ambassador to Peru, Gao Zhengyue, said that relations between his country and Peru “are at their best moment” in history.

According to him, both countries have deepened the confidence in the political, economic, technological educational, cultural, tourism and justice areas, among others.

The Chinese diplomat noted the increase of the economic, trade flow and bilateral investments, and highlighted the increase of the Chinese investments in Peru, with over seven billion dollars.

“I am convinced that with joint efforts the relations between our two brotherly countries will enter a new stage of development and reach a higher level in the two peoples’ benefit,” said Zhengyue.

[Latin America - China - Africa] — China’s new frontier

Chinese telecom-gear makers Huawei and ZTE have already conquered Africa and Asia. Next stop: Latin America.

(Fortune Magazine) — At phone operator Movistar’s sales offices in Buenos Aires, customers line up to buy high-speed wireless services to access the web on their mobile phones. Most Argentines don’t realize, though, that the company providing the gear for their broadband connections isn’t a longtime supplier to Latin America like Alcatel-Lucent, Ericsson, or Motorola, but a relative newcomer called Huawei.

China’s telecom suppliers are coming to the Americas. Pursuing the same formula they’ve used to win business throughout Asia and parts of Africa (selling cheap gear in low-income countries), equipment makers Zhong Xing Telecommunication Equipment (also known as ZTE) and Huawei are now getting a foothold in countries such as Argentina, Chile, and Colombia. Says Leandro Musciano, project director at Movistar Argentina, a unit of Spain’s Telefónica: “Price is important.”

[Caribbean - China] — China’s expanding relations with Latin America and the Caribbean

Commentary
By Odeen Ishmael

The recent visit of Brazil’s President Luiz Inacio “Lula” da Silva to China in May 2009 reflected the Asian nation’s expanding economic and political influence in Latin America and the Caribbean (LAC). One year ago, the Brazilian government had announced that China would surpass the United States as its major business partner. The results of da Silva’s visit verified this after the two nations signed 13 agreements, including a $10 billion loan from the China Development Bank to Brazil’s state oil company Petrobras. Petrobras also concluded a deal with a subsidiary of China’s oil refiner Sinopec for the export of crude oil. A major commercial agreement will also see the beginning of huge poultry exports to China.

Brazil’s two-way trade with China, one of the few economies still growing despite the global crisis, reached US$3.2 billion in April, surpassing the $2.8 billion trade total with the US. So far this year, Brazilian exports to China grew 65 percent over the same period in 2008, rising from $3.4 billion to $5.6 billion.

China will launch its first iron ore trading platform next week in a move that may lead to setting up its own pricing index and possibly exerting more influence over import costs, an official and reports said Friday.

The Rizhao International Iron Ore Trade Center will begin providing electronic commercial services for iron ore suppliers and steelmakers on Monday, said Liu Qiang, sales manager of Shandong Huaxin Trading Co., which is heading the project.

The center, a joint venture by Shandong Huaxin and four other local companies involved in bulk commodity dealings, will handle electronic transactions, information exchange, quality inspection, storage, transport, insurance and trade settlement, Liu said.

The center will act as a clearinghouse for information on iron ore trading, Liu said.

“As it gains influence in the long-term, it may have some influence on price negotiations,” he said.

Rizhao, a port in eastern China’s Shandong province, is one of the country’s biggest handlers of iron ore imports.

The trading platform would likely mainly serve China’s numerous smaller steelmakers. They buy independently from the biggest mills and do not pay the same benchmark prices the big steelmakers agree to each year in sometimes tortuous negotiations with overseas miners like Brazil’s Companhia Vale do Rio Doce SA and global miner Rio Tinto Group.

Meanwhile, the annual negotiations with overseas iron ore suppliers dragged on, according to the government-affiliated China Iron & Steel Association, which vehemently denied reports that Chinese steelmakers had settled for 30 percent to 35 percent price cuts.

“China’s steel industry and those of Japan and Korea are facing severe shocks from the global financial crisis,” CISA said in a statement posted on its Web site. It said the annual negotiations were continuing on a basis of “mutual interest and long-term stability.”

Unlike in previous years, when Shanghai-based Baosteel Group led the talks, this year CISA is handling the negotiations. Analysts say it is seeking at least a 40 percent cut in this year’s benchmark prices.

China imported 444 million tons of iron ore in 2008 – half of the volume of all imports worldwide, according to government figures. Imports in January through April surged to 188 million tons, as traders took advantage of lower prices to build up stockpiles.

Iron ore pricing has long been a point of contention between China, the world’s biggest steel producer and consumer, and foreign raw materials suppliers.

Such friction intensified in recent years as surging demand due to the booming economy and speculative buying drove prices for iron ore and other commodities higher.

But a slowing in industrial production due to the global economic crisis has raised expectations that Chinese and other steelmakers may win big concessions in this round of talks after yielding to demands for double-digit increases in ore prices in previous years.

[Source] — Associated Press researcher Ji Chen contributed to this report.

Lula’s visit to China has been anything but boring. On the heels of the $10 billion oil for cash deal reached between Brazil and China this past week, comes news of negotiations for two deepwater oil blocks between Petroleo Brasileiro SA (PBR) and China Petroleum & Chemical Corp.

Rigzone reports in this article:

The two oil blocks under negotiation between oil giants China Petroleum & Chemical Corp. (SNP) and Petroleo Brasileiro SA (PBR) are deepwater exploration blocks located in the north of Brazil, the Brazilian company’s top financial official told Dow Jones Newswires on Thursday.

Conversations, however, are still ongoing and the deal isn’t closed, said Almir Barbassa, chief financial officer of Petrobras, as the Brazilian company is known.

The blocks under consideration are within Brazilian waters, are 100% owned by Petrobras and run deep, or about 2,000 meters, he said. They are located off the coast of the two neighboring states of Para and Maranhao in northern Brazil, Barbassa added.

Earlier this week, China’s National Energy Administration Chairman Zhang Guobao told reporters in Beijing that Brazil would offer two oil blocks to Sinopec, as the Chinese company is known, as a way to strengthen energy cooperation between the two countries. He didn’t give any further details.

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Vitoria Saddi shares her analysis of the latest news to emerge from this weeks meetings between Brazilian President Lula da Silva and Chinese President Hu Jintao. If you have not already checked out Victoria’s site, Latin America and Brazil, I highly recommend you do.

As we all know, president Lula is in China this week. It seems that one of the goals of his visit is to enable Brazil and China to use their own currencies in trade transactions, rather than the US dollar. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency. It should be clear that this deal is different from what China is doing with Argentina – currency swap. In the Brazil – China deal Brazil would pay for Chinese goods with reais and China would pay for Brazilian goods with renminbi. The move follows recent Chinese challenges to the status of the dollar as the world’s leading international currency.

In our view, this is an important step towards convertibility. Clearly, the country can afford to have a convertible currency because it has a healthy balance of payments and the government has been taking steps towards convertibility.

Click here to read the full article from Latin America and Brazil