China (& India) – Latin America News Attack

Over the past few days my news radar has exploded with China-LatAm related news. Here are a few excerpts from the English articles.

Chinese investors become responsible in Latin America – study

LONDON (Thomson Reuters Foundation) – Chinese investors in Latin America are showing greater awareness of the social and environmental impacts of their business activities, and have started applying standards to make trade more sustainable, a research report said on Thursday.

The study from the International Institute for Environment and Development (IIED) looked at investment by Chinese state-owned enterprises in Peru, Brazil and Chile, in the mining, agriculture and forestry sectors. China is expected to overtake the European Union to become Latin America’s second-largest trade partner next year, after the United States, it noted.

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China to the rescue of Argentina with a 10 billion dollars equivalent swap

Argentina is negotiating with China a new 10 billon dollars equivalent swap of international reserves support based on the experience of 2009 when the global financial crisis. The new accord should theoretically help Argentina strengthen its international position vis-à-vis the run on the dollar (or the flight from the Peso) and which has cost the Central bank 4 billion dollars so far this year.

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Chinese Vice-president in Argentina to strengthen long-term strategic partnership

China is determined to advance in mutually beneficial cooperation with Argentina visiting Chinese Vice President Li Yuanchao said on his arrival on Thursday to Buenos Aires. He underlined that the new Chinese leadership will continue to perceive and develop bilateral relations from a long-term strategic perspective.

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China In Latin America: Why Is Vice President Li Yuanchao Visiting Argentina And Venezuela This Week?

Chinese vice president Li Yuanchao arrives in Caracas this week to meet with Venezuelan leader Nicolás Maduro and National Assembly President Diosdado Cabello after having spent the second part of last week in Buenos Aires. In recent years, China has expanded its economic links with Latin American countries, with Chinese manufacturers establishing their presence throughout the region, while China has become a main source of growth in exports of raw materials like petroleum, copper, iron and soybeans. But Argentina and Venezuela are the two countries with which China has had an uncertain relationship.

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Venezuela-China Trade Jumps

BY JOACHIM BAMRUD

Venezuela and Central America gain most in China trade.

Venezuela led the way in Latin American growth of exports to China and imports from the Asian country, according to a Latinvex analysis of data from the International Monetary Fund (IMF).

In percentage terms, three of the top four trade growth winners are from Central America. And when it comes to Latin American exports to China, the top three countries in percentage increases are from Central America.

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Chinese Vice-president asks Venezuelan government for efficiency in joint-projects

“We have to take care that these projects are effective and efficient, in the sense that they can play a positive role in employment and economic and social effects,” Li told Venezuelan Foreign Minister Elias Jaua while touring the site.

“I hope the efficiency factor will be taken into consideration.”

The plant is for pasteurizing milk and producing other dairy products and is being constructed in Valles del Tuy, near the capital.

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India’s Hero MotoCorp launches brand in Latin America

The country’s largest two-wheeler maker Hero MotoCorp today said it has launched the ‘Hero brand’ and its range of two-wheelers in Guatemala, El Salvador and Honduras in Central America.

Hero MotoCorp also announced a partnership with the reputed Indy Motos Group of Guatemala to bring its two-wheelers to these markets. Under the alliance, Indy Motos has been appointed as the authorised distributor of Hero MotoCorp range of two-wheelers in Guatemala, Honduras and El Salvador.

Pawan Munjal, managing director and chief executive officer, Hero MotoCorp, said: “This launch is a significant milestone for us considering this is the first of the new international markets, where we are starting our operations.”

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Peru’s non-traditional exports to China rise 92% in 2005-12

The Peruvian Exporters’ Association (Adex) has reported that China-bound exports of non-traditional products worth over US$ 1000 a year increased by 92 percent between 2005 and 2012.

According to official data, the number of these goods jumped from 108 to 207 in the period.

Adex said that exports of non-traditional products to China were valued at US$ 332.1 million in 2012, an increase of 29.3 percent compared to US$ 255.7 million in 2010.

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Peru’s non-traditional exports to India up 389.22% in 2010-12

Peruvian exports of non traditional products to India grew by 389.22 percent to US$ 83.6 million between 2010 and 2012, the Peruvian Exporters’ Association (Adex) said Tuesday.

This sum accounts for 21.64 percent of total exports to the Asian country in 2012, when they amounted to US$ 386.6 million.

According to Adex, the increase shows that Peruvian exports are entering markets with sustained economic growth like India and China in a context of global crisis.

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CAF Announces new common agenda for China and Latin America

UNA AGENDA COMÚN PARA CHINA Y AMÉRICA LATINA

En Beijing se realizó la tercera edición de la Conferencia CAF-ILAS, dedicada este año al tema Desarrollo y Transformación: Una Agenda Común para China y América Latina

El Presidente Ejecutivo de CAF –banco de desarrollo de América Latina– en visita a ese país se reunió con altas autoridades del mundo político, financiero y académico de Beijing y Shanghái.

(Shanghái, 10 de mayo de 2013).- “Desde América Latina y China debemos avanzar conjuntamente en la construcción de una relación estratégica de largo plazo que sea integral, dinámica y equilibrada”, dijo Enrique García, presidente ejecutivo de CAF –banco de desarrollo de América Latina– durante una visita de trabajo de cinco días a China, donde se reunió con altas autoridades del mundo político, financiero, empresarial y académico de Beijing y Shanghái.

Ésta se realizó en el marco de la III Conferencia CAF-ILAS, así como en la labor de este banco multilateral en tender puentes entre ambas regiones, con miras a promover el desarrollo sostenible de América Latina.

En la primera etapa del periplo, en Beijing, se destacaron los encuentros sostenidos con el Ministerio de Relaciones Exteriores, el Ex-Im Banco de China; y el International Economic Club of China. El Presidente Ejecutivo de CAF subrayó las excelentes relaciones entre la institución financiera latinoamericana y el país asiático, cumpliendo así su rol catalítico entre ambas regiones.

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Humala touts Peru as China’s “bridge” to LatAm – EFE

[Source] : EFE / Global Post

[Img] : Courtesy of Wikicommons

The two leaders met in Beijing’s Great Hall of the People on the fourth day of Humala’s visit to China after participating in the Boao Forum for Asia on the Chinese island of Hainan.

In Boao, the Peruvian president had already met with Chinese counterpart Xi Jinping to sign 11 cooperation accords.

“As events are developing, Peru can be the (primary) center for (Chinese) investments in Latin America,” Humala said.

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Chinalco Mining tumbles 6.3pc on trading debut

[Source] : South China Morning Post

Shares in Chinalco Mining Corp International, which is developing a copper mine in Peru, closed 6.3 per cent lower than their offered price on their trading debut yesterday.

The sharp price fall might have been caused by retail investors, who tended to have a short investment horizon and were not familiar with the company’s operations and outlook, analysts said.

Chinalco Mining is the overseas non-aluminium and non-ferrous metals arm of state-owned Aluminum Corp of China (Chinalco).

“Chinalco Mining’s operation in Peru is a long way from Hong Kong and production will only begin late this year, so it’s not easy for local investors to picture its prospects,” said Christfund Securities research director Simon Lam Ka-hang.

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APEC’s supply chain connectivity and its benefit to agro-industry

[Source] : The Jakarta Post

This year, Indonesia will host the Asia-Pacific Economic Cooperation (APEC) Conference in October 2013, and will hold four Senior Officials Meetings (SOMs), 12 Sector Ministerial Meetings, an APEC CEO Summit and the Economic Leaders Meeting. From Jan. 24 to Feb. 8, APEC, SOM I and related meetings are taking place in Jakarta.

APEC is an intergovernmental forum dedicated to promoting free trade, investment and economic cooperation throughout the Asia-Pacific region.

As stated earlier this month by Foreign Minister Marty Natalegawa, Indonesia will include its own national interest issues on the agenda such as economic resilience, improvement of small- and medium-scale business competitiveness, sustainable growth and food security.

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Colombian president hails close ties with Asia

[Source] : NZ Week

BOGOTA, Jan. 24 — Colombian President Juan Manuel Santos said Thursday Colombia would consolidate its ties with Asian and African countries in order to create more business opportunities.

On an annual reception for diplomatic corps, Santos said his country has enjoyed close ties with Asian and African countries and he plans to keep close contact with these countries along his administration.

“Colombia has made significant progress in diplomacy,” said Santos.

Colombia has become more active in working with regional organizations, such as the Association of Southeast Asian Nations (ASEAN) and Asia- Pacific Economic Cooperation (APEC), and it now tops the waiting list to join the Organization for Economic Cooperation and Development (OECD) after two years of “intense and serious” preparation.

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CSA Market watch: Soybeans in focus

Soybean prices are on the rise. As this article from Bloomberg highlights, some new interesting trends have emerged in recent years which commodity investors would do well to take note of.

Soybean plantation I drove past in Paraguay back in February of 2012. Soy exports remain a powerful driver of the Paraguayan Economy.

• China, which is currently the world’s largest consumer and importer of Soybeans tends to see demand spike around the Chinese Spring Festival / Chinese New Year Season (also referred to as the Lunar New Year Festival).  Farmers traditionally attempt to fatten their hogs before the season which is one of the few times during the calendar year which sees the great majority of the Chinese population take a holiday to reunite with family.  For thousands of years, Spring Festival in China been a special time of year where Chinese people from rich to poor justify “indulging in eating more meat.”  In the context of today’s interconnected global economy and China’s population of 1.3 billion people, this means when Chinese demand spikes, so will prices unless suppliers can adjust to this new phenomena and better prepare for yearly spikes around the time of Chinese Spring Festival. 
• China’s source of supply for soybeans is increasingly shifting towards South America. The agricultural sectors of Brazil, Argentina, Uruguay, Paraguay and Bolivia have been the major beneficiaries of rising demand from China (potential long-term problems which could arise from the environmental damage of intensive soybean production not withstanding).
• Prices have become increasingly sensitive due to two primary changes underway in the global supply chain of soybeans.
  • First, the USDA notes that supply is increasingly shifting from the US to South America.
  • Second, this shift has not been perfectly matched with an increase in supply from South America. Instead, South American producers are struggling to efficiently increase their production of Soybeans.

China Seen Boosting Purchases of Soybeans as Feed Demand Expands

[Source] : Bloomberg

Crushers in China, the world’s biggest buyer of soybeans, boosted purchases last week as rising demand for livestock feed increased profits from processing, according to a Bloomberg survey.

Companies ordered 30 cargoes from the U.S. or South America, the equivalent of about 1.8 million metric tons, according to the median of estimates from five crushers and one researcher compiled by Bloomberg. That compares with a usual weekly average of 10 cargoes to 20 cargoes, respondents said.
China canceled 1.16 million tons of shipments since Dec. 18, according to the U.S. Department of Agriculture, which increased concern consumption may be slowing. Fresh purchases by China, which buys more than 60 percent of globally traded beans, suggest demand is recovering as U.S. supplies decline.

“Traders are securing more shipments for the next two months” because of the looming shortage in supplies and limited loading capacity in South America, said Monica Tu, analyst at Shanghai JC Intelligence Co., who took part in the survey.

Consumption of soybean meal in China is increasing as farmers fatten hogs before the Lunar New Year festival in February when pork demand rises, Tu said from Shanghai yesterday. Stockpiles of soybeans in the U.S, the biggest producer last year, were 1.966 billion bushels on Dec. 1, 17 percent less than a year earlier, according to the USDA.

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ASIA ONE: The pros and cons of far-reaching trade agreements

The pros and cons of far-reaching trade agreements

[Source] : The Nation/Asia News Network

Amid stagnant multilateral trade talks under the World Trade Organisation (WTO) but fast-moving bilateral and regional negotiations, Thailand is looking at pursuing more free-trade pacts to ensure its competitiveness and level playing fields for Thai enterprises.

The government has been under pressure to consider three major pacts: the US-led Trans-Pacific Partnership, a Thailand-European Union FTA, and a comprehensive Thailand-India FTA. Many enterprises and academics support pushing ahead with talks, claiming that market liberalisation will facilitate trade and investment amid a global economic downturn.

Others, however, have warned against rushing into joining these pacts for fear of losing competitiveness with developed nations.

The Nation has reviewed the pros and cons of these potential FTAs as well as summing up the results of past trade agreements. Should Thailand join every trade pact to grasp the benefits of liberalisation amid the stalling of multilateral talks? Or should we slowly study the possible impacts of such agreements, such as emphasis on intellectual property (IP) rights and liberalisation of trade in services and investment? Should we consider extending the negotiation periods to ensure the readiness of Thai enterprises to compete?

TRANS-PACIFIC PARTNERSHIP

Many Thai enterprises want the country to join the US-initialised TPP. The pact so far involves nine countries: the United States, New Zealand, Singapore, Chile, Brunei, Australia, Peru, Vietnam and Malaysia. Japan, Mexico and Canada have also shown high interest in joining the agreement. Notably, the US is Thailand’s third-largest trading partner, accounting for 10 per cent of total export value. Thai enterprises involved in foods, toys, electronics, garments, sugar, jewellery and ornaments, and footwear support joining the TPP. Exporters share similar views, saying the agreement would entail tariff cuts and lowering of non-tariff barriers to services and trade. Thai exports are facing difficulties amid the slowing economic growth of the US.

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Economic & trading blocs in focus

Headlines galore, with a great deal of political drama hidden behind the scenes.   Below CSA presents a few excerpts from recent news on the ever continuing development of economic and trading blocs between the East and West.

EU, Singapore agree free-trade deal

[Source] : The European Voice

By Andrew Gardner – 16.12.2012 / 16:05 CET

The agreement is the EU’s first with an Asean country and its second in Asia.

The European Union and Singapore today (16 December) announced that they have reached agreement on a free-trade deal, 33 months after they began formal negotiations.

This is the second free-trade agreement struck by the EU in Asia; the first – with South Korea – came into force in July 2011.

The EU began negotiations with Singapore in March 2010 after its hopes of lowering barriers with the ten-country Association of South-East Nations (Asean) were dashed in 2009, and Karel De Gucht, the European trade commissioner, said today he hoped the deal would “open the doors for FTAs [free-trade agreements] with other countries in the Asean region”.

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[Img] : Courtesy of Wiki Commons, Leaders of the TPP

Vietnam sees value in TPP

[Source] : Published: 17/12/2012 at 09:47 AM – Newspaper section: Asia focus

Two competing regional trade plans, while sharing the aims of liberalising trade and improving economic integration, are making many Asean countries nervous at the same time.

The Trans-Pacific Partnership (TPP) has the backing of the United States while the Regional Comprehensive Economic Partnership (RCEP) is favoured by China.

Smaller countries might resent being put in a position where they feel they have to choose between the two. But Vietnam has confidently embraced the TPP, believing it could increase its exports while helping the country attract more foreign investment.

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Trade power play

[Source] : Published: 17/12/2012 at 09:44 AM – Newspaper section: Asia focus

China’s attempt to convince Asean countries to support the Regional Comprehensive Economic Partnership (RCEP) reflects the country’s aim to become the real economic leader of Asia Pacific and keep the United States at bay, say experts.

While Beijing drums up support for the 16-country RCEP (Asean plus China, Japan, South Korea, India, Australia and New Zealand), Washington is making its case for the Trans Pacific Partnership (TPP).

Both countries went all-out at the Asean and East Asia Summit meetings last month in Phnom Penh, with newly re-elected President Barack Obama talking up the TPP with individual leaders. However, the RCEP now has some real momentum following its formal endorsement by the leaders of the 16 countries involved. They hope to start negotiations in 2013 and finish by 2015. A successful outcome would lead to the creation of the world’s largest regional trading bloc.

The TPP has been on the drawing board for a long time and has proved to be a tougher sell. It envisages a trading bloc covering all of the countries on the Pacific including those in North and South America. Singapore, Chile and New Zealand were original signatories back in 2005, followed by Brunei, while the United States didn’t even enter the picture until 2008. Since then there have been several rounds of talks and six more countries — Australia, Peru, Vietnam, Malaysia, Mexico and Canada — have entered negotiations.

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Latin America – ASEAN in focus

[Img] : Courtesy of WikiCommons

President Obama, along with Secretary of State Hilary Clinton visited Thailand, Cambodia, and Myanmar (making him the 1st US President in history to visit the country) last week. In this ever more interconnected world in which we live, even Latin America is watching closely as the historic trip of US President Barack Obama has made to SE Asia unfolds.

Four messages Obama is sending Latin America from his trip through Asia

[Source] : The Christian Science Monitor

By James Bosworth, Guest blogger / November 19, 2012

Obama may be sending an unintentional message that the US holds Asian countries like Myanmar and China to a lower standard on democracy and human rights.

President Obama’s first post-reelection trip passes through Thailand, Myanmar (Burma), and Cambodia for the ASEAN summit. The messages that Latin America hears from this trip may or may not be the ones the United States intends to send.

Move in the right direction

Burma is a military dictatorship that is less democratic and more repressive than any country in the Western Hemisphere except Cuba. Yet, they’re doing better than they were a decade ago. They’ve released some political prisoners including Aung San Suu Kyi and have begun reforms to give democratically elected civilians increased power. The US has eased sanctions and the president is visiting. For a country like Cuba, it should be seen as a sign that real reforms can be met with better relations by the US and that gradual progress is possible.

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Brazil signs TAC, offers win-win economic cooperation

[Source] :  The Jakarta Post

By Novan Iman Santosa, The Jakarta Post, Phnom Penh | World | Sun, November 18 2012, 11:08 AM

Brazil has become the 31st highest contracting party and the first in Latin America to sign the Treaty of Amity and Cooperation (TAC) in Southeast Asia and offers various forms of cooperation, ranging from food security to energy cooperation.

The instruments of Brazil’s accession to TAC and its extension were signed Saturday by foreign ministers from 10 ASEAN member countries and Brazilian Vice Foreign Minister Maria Edileuza Reis at the Peace Palace in the Cambodian capital city.

Brazilian Ambassador to Jakarta and ASEAN Paulo Alberto da Silveira Soares told The Jakarta Post that Brazil considered its accession to TAC a landmark in its relations with Southeast Asia as the country became really engaged in cooperation in a broad sense.

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U.S. to work on economic dimension of pivot to Asia: Clinton

[Source] : The Nation

By: NNI | November 17, 2012, 7:43 pm

The United States Secretary of State Hillary Clinton said Saturday that the U.S. will strengthen its economic engagement in Asia Pacific, in addition to the strategic and security dimensions of what has been known as a ” pivot” to the region.

Delivering a lecture on U.S. diplomatic strategies in the region, Clinton said President Barack Obama is visiting Asia shortly after his re-election because much of the history of the 21st century will be, and is being, written in the region.

She said it is clear that economics are increasingly shaping the strategic landscape and that for the first time in modern history, nations are becoming major global powers without also becoming global military powers.

“Emerging powers are putting their economics at the center of their foreign policies. And they’re gaining clout less because of the size of their armies than because of their GDP (gross domestic product),” she said. “So to maintain our strategic leadership in the region, the U.S. is also strengthening our economic leadership.”

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