Rare question and answer Xinhua Exclusive on China- Latam relations

Thank you Xinhua News. Please click here to access the article from Xinhua News.

Yang Wanming, director-general of the the Department of Latin American and Caribbean Affairs of the Chinese Foreign Ministry, exchanged views with chinanews.com readers online on Tuesday afternoon.

 

Yang Wanming, director-generalof the Department of Latin American and Caribbean Affairs of the Chinese Foreign Ministry, answers questions from chinanews.com readers online on Jan 17, 2012. [Photo/Chinanews.com]

 

Topic: China-Latin America cooperation in culture

Q: How do China and Latin America cooperate in the field of culture?

A: China has opened 32 Confucius institutes in Latin America, covering almost all Latin American countries. Both sides also send art troupes to visit one another and conduct people-to-people exchanges. Many Chinese people like their football, music and dances and engage in studying Spanish and Portuguese. Many Chinese books have also been translated into Spanish and sold in Latin America.

Topic: Cooperation in energy

Q: What’s the current situation with Sino-Latin American energy cooperation? Some people think China is plundering energy resources there and uses it as a way to curb the US.

A: China is trying to carry out comprehensive cooperation with Latin American countries and its efforts have been well welcomed by them. The cooperation not only benefits the two parties, but also contributes to global peace, stability and prosperity. It started late and is on a relatively small scale, but has been developing fast. China imported 20.73 million tons of crude oil from Latin American countries in 2010, which accounts for 8.7 percent of China’s total import in that year. Venezuela has become China’s 4th largest oil provider. The two parties will explore cooperation on new energy. It’s totally based on equality and mutual benefit and will do no harm to the third party.

Topic: US view on China-Latin America relationship

Q: The relationship between China and Latin American countries has developed so fast. What do you think of the feeling in the US to this?

A: In recent years, the independence of Latin American countries is growing and its economic growth momentum becomes more diverse than before.

The rapid development of China-Latin America relations is on the basis of mutual benefit and win-win for both sides and is within the needs of Latin American countries’ diversified diplomacy and development strategy.

It will not only benefit development of both, but also contribute to the world’s stability and development.

China and the US have already established a consultation mechanism on Latin-America, and through four different consultations, the two parties have enhanced their mutual trust on this issue.

And the US has repeatedly stressed in their consultations that strengthening relations between China and Latin American countries will be good for Latin-America’s stability and development.

Topic: Chinese workers kidnapped in Colombia

Q: It was reported that several Chinese employees were kidnapped in Colombia by unidentified armed militants. How are they now? Could you release some information about the rescue efforts?

A: Four Chinese workers were kidnapped by some unknown armed militants in Caquetá province in Colombia on June 8, 2011. We have urged the Colombia authority to spare no effort to carry on the rescue work under the premise of guaranteeing the safety of hostages. Since then, the Chinese embassy in Colombia has kept in close cooperation and contact with Colombia’s relevant departments. The rescue work has not finished yet, but the safety of the four hostages can be guaranteed. Chinese companies are facing more risks as they go global on a larger scale. We need to increase our political backup and diplomatic guarantee to them, strengthen the consular protection and safeguard their legitimate interests. Meanwhile we advise Chinese people in Latin America to improve their sense of safety and precaution.

Q: How about China-Mexico relations?

A: China and Mexico are both developing countries and are working at enhancing people’s living standards. They hold the same positions on many international issues and regularly cooperate on these..

China and Mexico have some trade friction over trade imbalance problems, but we hope both sides can deal with the problems reasonably and from a development point of view.

We hope both can take active measures to promote the diverse, comprehensive and healthy development of the two countries’ economic and trade relations.

February 14 marks the 40th anniversary of diplomatic relations between China and Mexico. We believe the relations can become more comprehensive, steadier and healthier with the two countries’ joint efforts in the future.

Q: Can you talk about the relationship between China and Brazil?

A: Brazil is one of the biggest countries in Latin America and one of the emerging powers in the region. The China-Brazil relationship is one of the most important between China and Latin America.

In recent years, the strategic partnership between China and Brazil has made considerable progress. They maintain a good momentum of high-level exchanges and the political mutual trust is deepened.

Their economical cooperation is also deepening constantly, which has brought tangible benefits to people of both countries. Bilateral trade volume exceeded $80 billion in 2011. Investment cooperation in finance, energy, steel, and machine manufacturing has also made great progress, and is expanding constantly.

China and Brazil have active exchanges in science, technology and culture as well.

The cooperation in the fields of Earth resource satellites, agricultural technology and aviation is progressing continuously. And the cooperation in culture and education is also very close.

China’s Confucius Institute Headquarters opened two Confucius Institutes and a Confucius school in Brazil and Brazil’s important media institutions have sent many journalists to work in China.

China and Brazil are both developing countries and have broad and consistent interests on major international issues. The Chinese government attaches great importance to relations with Brazil and believes the two countries’ cooperation in various fields will make great progress with their joint efforts.

 

Jim Rogers on Euro, Investment Strategy, MF Global – BLOOMBERG

Dec. 7 (Bloomberg) — Jim Rogers, chairman of Rogers Holdings, talks about his investment strategy and the collapse of MF Global Holdings Ltd. Rogers, speaking with Tom Keene on Bloomberg Television’s “Surveillance Midday,” also discusses the outlook for Brazil. (Source: Bloomberg)

Click here to watch the video direct from Bloomberg

Self-sufficient food policy benefits world – China Daily

Early this year, the Food and Agriculture Organization of the United Nations (FAO) issued a special alert warning that North China, the country’s wheat basket, was suffering from a severe winter drought that could devastate China’s wheat harvest, putting further pressure on world wheat prices that have been rising rapidly in recent years.

Underlying the FAO’s warning is the central message that should China lose its winter wheat crop, it will go to the international grain market to make up any shortfall. The sudden entry of such a huge buyer could certainly rock the international food markets.

However, the FAO’s warning is a false alarm. First, because for the past six to seven years, China has lost around 7 percent of its annual grain output to various forms of natural disasters, and yet its annual grain production has been on the rise. In 2010 China’s total grain production was a historical record of 546 million tons. Second, successive years of bumper grain harvests have enabled China to build up a large grain reserve of more than 40 percent of its annual consumption – much higher than the world average of around 17-18 percent. The growth in grain productivity for the past three decades has been very impressive, particularly since 2004.

China’s population accounts for 21 percent of the world’s total population, but the country is endowed with only about 9 percent of the world’s arable land. Feeding such a vast nation, with such an unfavorable man-land ratio, has always been a great challenge for China’s rulers, past and present. Hence the old Chinese adage: “An economy without strong agriculture is fragile, and a country without sufficient grain will be chaotic”.
Even in modern times it remains an enormous task for the Chinese government to ensure food security. China’s serious food crisis between 1959-1962 is still fresh in the collective memory of the present generation of Chinese leadership. Therefore, China has always taken food security very seriously, much more so than many other countries. Food security in China basically means “food self-sufficiency”, with the bottom line set at 95 percent of domestic grain supply.

Such a stringent definition of food security naturally puts an additional burden on the government. The problem is aggravated by the fact that for the past three decades, China’s total population increased from 960 million in 1978 to 1.3 billion in 2009, while arable land, the total sown area, increased only marginally by 5.4 percent.

Worse still, the total sown area devoted to food crops declined substantially from 80 percent in 1978 to just 64 percent in 2009, mainly because, with economic prosperity and rising incomes, farmers were growing more lucrative non-grain commercial crops.

Accordingly, China has come to depend heavily on increasing the output per unit of land area to maintain its food security. This, in turn, needs continual technological progress, such as using hybrids or other high-yielding varieties, and increasing intensification of cultivation with greater use of modern inputs like chemical fertilizers and pesticide.

The trouble is that barring the use of genetically modified (GM) crops, the productivity growth potential of traditional technological progress based on modern seeds and modern inputs has started to slow down everywhere in the world. Widespread use of modern inputs of industrial origins also inflicts long-term ecological damage.

Rapid economic and social changes have further worked against food production. Industrialization and urbanization in China as elsewhere inevitably spell agricultural decline. Farming is also becoming economically and socially unattractive to young people. As in other densely populated East Asian economies with severe land constraints, food production in China has also become an increasingly high-cost business.

With China having achieved successful industrial take-off, economic theory suggests that it should have a stronger comparative advantage to export labor-intensive manufactured products to the United States in exchange for its cheaper food produced by land-extensive farming. In other words, China should scale down its existing high level of food self-sufficiency and let international trade take care of any shortfalls, much as Japan has done.

However, the world has a stake in China’s strong food security. If China followed the economic theory of comparative advantage by relying on international trade to achieve its food security, its import requirement would seriously destabilize the international grain market and drive up world inflation.

It is therefore in the favor of the whole world for China to rigidly adhere to its basic tenet of maintaining strong food self-sufficiency.

The author is director of the East Asian Institute, Singapore.

Commodity Markets; weekly roundup

Rogers International Commodity Index

(Oct 26-30, 2009)

*metals commodity prices obtained via Kitco Metals
*energy commodity prices obtained via Yahoo Finance
*agriculture commodity prices obtained via Yahoo Finance
*wheat futures via Bloomberg

Newswire: South-South / Emerging Market Cooperation

[China - ASEAN] - China to Boost Cooperation With Asean on Investments – Bloomberg

China wants to boost cooperation with members of the Association of Southeast Asian Nations to develop trade and increase investment, said Chinese Commerce Minister Chen Deming.

[ASEAN] - Five Asean Nations May Form Rice-Trade Body, Thai Official Says - Bloomberg

Five Southeast Asian nations may set up a rice-trade association next year to cooperate in stabilizing rice prices, a Thai official said.

Thailand, Vietnam, Cambodia, Laos and Myanmar will also cooperate on other issues related to food security and production, said Chiya Yimvilai, a spokesman at a meeting of Asean economic ministers in Bangkok. The countries would also work together on developing rice products, he said.

[Venezuela - Russia] – PDVSA, Russian Group to Start $30 Billion Oil Venture – Bloomberg

Petroleos de Venezuela SA and a group of Russian oil companies plan to spend $30 billion on a joint venture in Venezuela’s Orinoco region.

The 40-year venture will seek to produce crude in the Junin 6 area and may expand to other Orinoco blocks, Russian Deputy Prime Minister Igor Sechin told reporters in St. Petersburg today after meeting with Venezuelan Vice President Ramon Carrizalez. Russian investors will include OAO Gazprom, OAO Rosneft, OAO Lukoil, TNK-BP and OAO Surgutneftegaz. The venture will be signed “in the coming months,” Sechin said.

[Mexico - Uruguay] – Mexico/Uruguay sign strategic association accord and advance trade – MecroPress

Mexico president Felipe Calderón and Uruguay’s Tabare Vazquez signed on Friday in Montevideo a Strategic Association accord to strengthen political dialogue and bilateral trade relations in the framework of the 2004 free trade agreement.

[Mexico - Colombia - Venezuela - Ecuador] - Mexico offers to mediate between Colombia and Venezuela and Ecuador – MecroPress
Mexican president Felipe Calderón on an official visit to Colombia offered his country’s mediation in the conflict between Bogotá and neighbouring Ecuador and Venezuela.

[Peru - Brazil] - Brazilian President to visit Peru to strengthen strategic alliance – Andina
The next arrival to Lima of Brazilian President Luiz Inacio Lula da Silva will contribute to create a new strategic alliance to face Asian markets when signing several trade agreements, the President of Peru-Brazil Integration Chamber Miguel Vega Alvear.

“The arrival of Brazilian President will strengthen the progress achieved up to now in this Peru-Brazil strategic alliance and it will create a new stage in which both countries can face Asia-Pacific markets,”

a2a_linkname=”Newswire – South South Emerging Market Cooperation”;a2a_linkurl=”http://chinasouthamerica.blogspot.com/2009/08/newswire-south-south-emerging-market.html”;

[Commodities] — Is the rally over?

Commodity Rally May Falter on Supply, Speculators

June 29 (Bloomberg) — Commodities, heading for the first quarterly advance in a year, may struggle to repeat their gains in the next three months as supply expands and speculators sell.

Nickel may average 29 percent less in the third quarter than now, crude oil 16 percent, copper 14 percent and gasoline 10 percent, analyst estimates compiled by Bloomberg show. Hedge funds and speculators cut their bets on higher prices by 23 percent in the two weeks ended June 23, the first back-to-back drop since March, based on an index using U.S. Commodity Futures Trading Commission data. The World Bank said June 22 the global recession will be deeper than it expected three months ago.

“Commodities have gotten a little ahead of themselves,” said Walter “Bucky” Hellwig, who helps oversee $30 billion at Morgan Asset Management in Birmingham, Alabama. “As long as there’s uncertainty about growth, that’s going to be headwind commodities won’t be able to overcome.”

Commodities rose 14 percent this quarter, led by nickel, oil and sugar, after three consecutive declines, according to the Reuters/Jefferies CRB Index of 19 raw materials. This year’s 57 percent advance in oil costs, combined with widening budget deficits, may cause another global slump, said Nouriel Roubini, the New York University economics professor who predicted the financial crisis.

Click here to access the full article from Bloomberg

Twenty-nine countries protest reintroduction of US Dairy Export Subsidies

Twenty-nine countries at the World Trade Organization criticized the United States on Wednesday for reintroducing export subsidies on US dairy products, calling the handouts a dangerous retreat into protectionism and warning of “subsidy wars.”

Brazil, speaking on behalf of 23 developing countries, told a WTO meeting that Washington was promoting a “murky protectionism” that weakens the global trading system at a time when global commerce is already shrinking at a record pace.

Australia, on behalf of agricultural exporting countries, said the announcement Saturday by US Agriculture Secretary Tom Vilsack of subsidies for 91.000 tonnes of mainly powdered milk, butter and cheese was unfair to countries trading fairly, and potentially damaging to global economy’s recovery.

The subsidy decision under the US Dairy Export Incentive Program follows a similar move by the European Union in January.

[Source] — MercoPress

I would like to take a moment to reflect on a old post I wrote a little under a year ago, on June 19, 2008. It is one third about Southern Copper Peru (PCU), one third about sky rocketing commodity prices, and one third about a intense protest I witnessed in Tarapoto, Peru in 2002. I was in Tarapoto during a family trip to the region to visit my maternal grandfathers home town of Rioja. I may be a bit biased but the province of San Martín is a beautiful region of Peru I highly recommend people visiting Peru check out.

I’m going to reflect specifically on the third topic—the protest. If would like you can click here to read my entire post from 6/19/2008.

In 2002 I was visiting Tarapoto, Peru. The city is located in the Peruvian province of San Martin, Peru. Rice workers had paralyzed the region because US subsidies had made locally produced rice more expensive than imported rice from the US–which ironically was also widely available in this region of Peru which a large amount of rice.

Tarapoto, Peru

By my fourth day in the city protesters had taken over the town square and blocked the roads to my grandpas home town of Rioja. As a tourist who was fortunate to have family in the city I was able to to get back to Lima before the city was forced to shut down. My family and I were woken up at 6am one morning and quickly informed by my grandpa’s brothers we needed rush through the back roads of the jungle and get to the airport as soon as possible. Once we arrived at the airport we were rushing into a back office with other tourists holding US, Canadian and European passports, until a flight could take us all to Lima… all the while protesters attempted to rush the airport gates.

It is ironic food prices are now so high, Tarapoto’s Rice industry is now growing rice and actually making a profit, although US subsidies still aren’t help the overall market. The fact and main point I am attempting to get across is that all it took for protesters to paralyze the region was to create a blockade one highway–leaving the city isolated.

Click here to view a excerpt from the only link to an English language article I was able to find that still had an active link.

If you can read Spanish, I have found two articles. The first article describes how the situation unfolded. The second article explains the accord which was eventually reached by the protesters and the government.

Benito’s conclusion… The United States needs to re-think their protectionist policies, especially when it comes to such goods as cotton, food and other agricultural commodities. Easier said than done, but no less a necessary change that needs to happen sooner than later.

Jim Rogers: "We are going to have serious food shortages in a few years"

Jim Rogers sits down with Bloomberg host Haslinda Amin in his home base of Singapore. Haslinda gets a full twenty minutes to test his patience while she asks what his opinions are on investing in a variety of investment categories. Commodities. Currencies. North American Natural Gas. Yen Carry Trade. Agriculture. Equities. ETF’s.

As usual, Jim Rogers is sticking to what he knows best-raw materials. If you’re a new reader, or have not heard of Jim Rogers definitely run a search on the right of his name to bring up past posts and videos including him.

Part 1 /3

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Part 2 / 3

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Part 3 / 3

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Jim Rogers: Speak Mandarin, Don't Buy America

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