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

Commentary: U.S. needs bigger thinking on Latin America

ANDRES OPPENHEIMER of the Miami Herald and CNN Español discusses US Foreign Policy towards Latin America

Note the author of this blog (me) does not always agree with what Mr. Oppenheimer says, but his article no less merits a quick read.  Some major points which any reader giving this a quick skim should note –>

1/ The Obama Administration has left the post of Head Latin American affairs vacant for 5 months.  So much for making good on promises back in 2008 to forge closer ties with the region… Big disappointment here, but not any worse or better than the disappointment / let down his predecessor Bush Jr also produced.  It seems the last President to care at all about the region was Clinton who did more than organize summits… He laid the foundation for FTA’s with countries in the region via NAFTA

2/ Obama did not visit Brazil, the growing powerhouse and member of the BRIC club until 3 years into his presidency. When he did visit, he received nothing but criticism for going through with the official visit between the heads of state of the Western Hemisphere’s two largest economies… because the visit happened to coincide with start of Western Military efforts in Libya. For the US media which pointed the finger at Obama, shame on you, the President does not physically need to be in the United States to be “Commander and Chief,” especially for an internationally organized, and initially French lead military mission.  For Obama, shame on you too! It took you three years to visit Brazil!  I think for Brazilians this is an obvious insult, but even for the rest of South America (and Latin America as a whole), Obama, Bush Jr. and the United States… well… Latin America is feeling a bit as if they are being ignored.  One thing is certain – China is not ignoring Latin America, nor is India, Russia or even small players like Singapore which is investing to expand the Panama Canal.  

3/ As Ray Walser,  Senior Policy Analyst for Latin America at The Heritage Foundation very appropriately points in a 2009 publication “U.S Policy toward Latin America in 2009 and Beyond”  From 1996 to 2006, total U.S. merchandise trade with Latin America grew by 139percent, compared to 96 percent for Asia and 95 percent for the European Union. In 2006, the U.S. exported $223 billion worth of goods to Latin American consumers(compared with $55 billion to China). Fifty-one percent of U.S. energy imports originate from Canada, Mexico, Venezuela, Ecuador, Colombia, and Brazil.

Excerpt from Oppenheimer’s article –>

U.S. diplomatic ties with Latin America, which have been in limbo for months, got a small boost last week when President Barack Obama nominated Roberta Jacobson as top State Department official in charge of Latin American affairs. But that alone will not do much to revert the gradual loss of U.S. clout in the region.

Granted, the career diplomat gets high marks from almost everybody in Washington’s small world of Latin American affairs specialists. Unlike her predecessor Arturo Valenzuela, a political appointee whose nomination in 2009 was blocked for several months by Conservative republicans, the Senate is expected to easily confirm her nomination.

Among the most urgent issues Jacobson would have to deal with would be the long-stalled U.S. ratification of the free trade deals with Colombia and Panama, the escalating violence in Mexico, and the April 2012, 34-country Summit of the Americas in Colombia.

On a wider spectrum, she would have to find new ways to improve ties with the region at a time when China has eclipsed much of the previous U.S. economic influence in South America’s commodity producing countries.

Click here to read Oppenheimer’s full article via the Kansas City Star

China-Brazil; a clash of cultures

Celio Lin, 29, sat by the cash register of his family’s busy Chinese restaurant complaining about the Brazilian staff, while his mother checked on the line cooks by tugging on their coats and attentively peeking into pots of soup and noodles.

Img: Courtesy of Wikicommons

“Brazilians want vacations for I-don’t-know-what, they want a day off for I-don’t-know-what, they want to go to the beach, to relax,” Lin said. “The beach is obviously pleasant, but if you send a Chinese man to the beach, he’ll go there to sell something!”

A tip of my hat to AP’s Sao Paulo office for writing a very interesting piece on the on-going process of Chinese and Brazilians learning how to do business with one another.

The article does a great job of highlighting the major differences in the expectations of workers, managers, and executives from both Chinese and Brazilian companies operating in one another economy.

More than 2 years after your author personally embarked on his journey to learn Chinese, build bridges between China and South America, I can personally attest that many of the observations in this article are true… but I stop short of painting such a negative picture as the article does — almost suggesting it is impossible for the two cultures to begin to learn how to work together more efficiently and understand one another.

Here’s an excerpt from AP’s article. You can click here, or the link at the end of the excerpt to read the article in its entirety direct from AP News.

Culture clash complicates China’s Brazil push
(AP) – 13 hours ago

SAO PAULO (AP) — Stocking shelves in a Chinese grocery store, Thiago warned that he didn’t want to be caught chatting during working hours. Within seconds, however, the Brazilian unleashed a pent-up flood of complaints about the owners, who lingered just beyond hearing distance.

“My bosses have never heard of a day off,” said the 20-year-old, who would only allow his first name to be used, for fear of losing his job. “Vacations? Forget it. They pay well and they pay for extra hours, but they don’t understand that some things are more important to Brazilians than money.

“I’ve seen many workers walk in, see the Chinese way of doing things, and quit the very same day.”

Such cross-cultural tensions have become a stumbling block in an otherwise meteoric rise in business ties between China and Brazil, two of the world’s fastest-growing economies.

Chinese companies’ direct investment in Brazil jumped to $17 billion last year, nearly 60 times the investment the previous year, according to SOBEET, a Brazilian economic think tank. At the same time, more Chinese companies are hiring local workers rather than following their old practices of bringing in Chinese laborers.

Click here to read the full article, direct from AP

China Latin America Trade Jumps in 2010

Presidents Dilma Rousseff and Hu Jintao in China last month can celebrate rising two-way trade. (Photo: Roberto Stuckert Filho/PR)

China’s trade with Latin America is growing twice as fast as U.S. trade with the region.

BY RUTH MORRIS of the The Latin American Business Chronicle

SHANGHAI — China’s dragon breathed fire into Latin America in 2010, as trade between the two sides shot up by a spectacular 51.2 percent, to $178.6 billion, and memories of the economic recession melted away.

China’s trade with Latin America is growing at nearly twice the level of US trade with the region. It also is significantly higher than the 31 percent increase in trade between the European Union and Latin America last year.

Click here to read more direct from the Latin American Business Chronicle

Sinopec to Invest $7.1 Billion in Repsol’s Brazil Unit

China Petrochemical Corp., the country’s second-largest oil and gas producer, will invest $7.1 billion in Repsol YPF SA’s Brazilian unit as the Spanish oil company raises funds to develop offshore projects.

Sinopec Group, as the company is known, will buy new shares in the Brazilian unit and will hold 40 percent of that division after the capital increase, Madrid-based Repsol said today in a statement. Shares in Repsol, which previously planned an initial public offering of the unit, jumped to a two-year high.

The acquisition is the second-largest overseas purchase by a Chinese company as the world’s biggest energy consumer snaps up fields to meet surging demand. Repsol has stakes in blocks in Brazil’s Santos and Espirito Santo basins and plans to invest as much as $14 billion there through 2019. It estimates the Guara and Carioca fields may hold as much as 3 billion barrels.

… Continue reading here direct from Bloomberg

China revives The Silk Road

Guest post from Calipe Chong, founder of VipoAsia and author of VipoAsia’s blog

The Ancient Silk Road - Wikicommons

China adopted West Development Strategy since January 2000 to beef up the economic development in the western region to close the gap with the prosperous eastern region at the coast line. In the last 10 years, the central government had financed more than 3.5 trillion yuan ($512.4 billion) to support development of the western region which consists of 12 western provinces, autonomous regions and municipalities with a combined population of about 370 million. They include Sichuan, Yunnan, Gansu and Shaanxi provinces. This year alone, China planned to invest 468.9 billion yuan ($69 billion) for projects in this region.

President Hu Jintao announced on May 21 at the central work conference that Xinjiang Uygur Autonomous Region would receive 2 trillion yuan ($295 billion) in next 5 years for fixed asset investment to double up its GDP to national average by 2015. The purpose is to improve Xinjiang’s infrastructure, self-development capacity, ethnic unity and social stability. Premier Wen Jiabao also proposed a series of preferential policies to boost Xinjiang, among which was the resource tax reform launched on June 1. The government is trying hard to reduce regional income disparities which have escalated into a big social problem. It hopes to harmonize the strife tension between ethnic Uyghur and Han Chinese.

The vast natural resources on minerals, oil and gas would also provide the return on this vast investment. Central state-owned companies and large private corporations are becoming a powerful engine for the rapid economic growth in Xinjiang.

Kashgar, an ancient Silk Road trading post located in western Xinjiang, has been singled out as an economic development zone meant to increase trade with nearby Central Asian nations. It is to be modeled after the special economic zone (SEZ) of Shenzhen with preferential policies in addition to becoming a comprehensive reform experimental zone. The 50 square kilometer SEZ is planned to boost the city’s economy and population to one million but also drive the economies of the surrounding cities and countries.

To further enhance the connectivity of Xinjiang, the government had begun constructing the second high speed railway line linking it with the inland cities and Beijing. This would make the journey from Urumqi, provincial capital of Xinjinag, to Beijing an awesome 12 hours compared with the current 40.

China has developed her high speed train to a remarkable speed of 350 Km per hour. And she now has the longest high speed train network in the world. She is experimenting train with speed of 500 Km per hour which will be delivered in less than 5 years time. The engineers and scientists are researching train with speed up to 1,000 km per hour. They hope the super high speed train would be operational in 10~15 years time. If that happens, it will revolutionize the whole transport industry and a major threat to short distance flight. The whole supply chain will have to be remodeled.

With the success of her high speed train, she now embarks on a very aggressive ambition to develop transcontinental high speed rail lines spanning across 17 countries. She is planning to develop 3 major rail lines as follows:

(a) Southern route – Kunming in southwest China with Singapore passing through Myanmar, Vietnam, Cambodia, Thailand and Malaysia

(b) Western route – Urumchi in northwest China with Germany passing through Kazakhstan, Uzbekistan, Turkmenistan, Pakistan, Iran and Turkey

(c) Northern route – Heilongjiang in northeast China with South-Eastern Europe through Russia

The whole network links 28 states with 81,000 km railroads. This massive network connecting China with Central Asia and Eastern Europe looks so much like the ancient Silk Road. I call it the Metallic Silk Route. It is mind-boggling and breathtaking for China to visualize such almost impossible feat. China has meticulously setting her plan to rekindle the ancient trading with Central Asia, Eastern Europe, Russia and South Asia.

She plans to build it with her own money in exchange for resources from the respective states. This would help her to tap opportunities and resources from the resource-rich Central Asia and less dependent from her current overseas suppliers. It will probably bring tremendous trade opportunities and wealth to the under-developed Central Asia which has been deprived from the global economy for centuries. Many states may find it hard to resist the China offer. Without the high speed railway, it is difficult for them to sell their resources to finance the nation building and welfare development.

The direct access to Middle East and Eastern Europe without using the sea lanes would mean that China can depend less on the narrow, congested and pirates infested Malacca Straits and controversial India Ocean and South China Sea. Any hiccups at these sea lanes could bring China economy to her knees. Chinese does not like someone holding his throat. The massive man power and resources to build and maintain the Great Wall to deter the invasion from the West is a good example of what China would do to keep her safe.

We need to understand the impact of ancient Silk Road to the countries involved to conceptualize what the Metallic Silk Route would bring to the region. The ancient Silk Road was an important path for cultural, commercial and technological exchange between traders, merchants, pilgrims, missionaries, soldiers, nomads and urban dwellers from China, India, Tibet, Persia, Arab and Rome for almost 3,000 years. The eastern road was made safe from bandits by the Han Dynasty in early 200 BC. Han Wudi managed to foster a safe passage with the various kingdoms in the region.

The road which was reputed as 6,400 Km long enabled trade in silk, slaves, spice, perfumes, medicines, jewels, artifacts, glassware, etc. More importantly it allows the spread of knowledge, ideas, teachings, culture, food, music, language and religion. All the countries not only gain wealth from the immense trading but also intellectual development from the diverse countries. Many inventions and thoughts were developed. It had flourished the civilizations at both ends of the continent. Buddhism was brought to China from India while Islam was brought to Central Asia from Arab. There are many Chinese Muslims living in western China right till now.

The Turks who came into power after the fall of Mongol Empire had literally cut off the Silk Road around 1400 AD. It had deprived the West from access to beloved silk and spice from the East. This had compelled Portugal and Spain to find an alternate sea route to the East. The success of the maritime explorers brought Europe to Asia and had helped it to become colonial powers for centuries. Without the quest to the East to acquire the commodities, the global development would not be what it is today.

In ancient time, the Romans would pay gold for the silk from China. And now China is buying resources from Central Asia with her huge foreign reserves. The Metallic Silk Route allows her vital oil and gas import from Middle East and Russia to flow in through an alternate route. This is a very critical strategy to sustain her huge consumption of energy. And she is also less vulnerable on the negotiation table with the less friendly countries.

China attempts to revitalize trading with her western neighbors is sensational and formidable in this new century. She cannot do it alone. Besides the contiguous states along the railway lines, she also needs the investment and involvement from the well developed nations to succeed. This spells great opportunities for companies willing to venture in this new frontier. This will be a new chapter in global trading.

In twenty years time, the whole Asia will revive her glory, might and global dominance once again after a millennium gap. The impact would be far greater than the ancient Silk Road era. The wind of power and influence never stop circulating around the globe.

* This entry has been published with the permission of the author, Calipe Chong of Vipo Asia.  Please visit VipoAsia to access his blog directly and read more of his insight on Asia and the world.

Playing The China Game – CNBC

Michael Kurtz, China strategist at Macquarie Securities, believes risk tolerance is back on the table in China. He tells CNBC‘s Bernard Lo that the biggest value in the mainland markets can be found in the cyclical stocks and banks.

Must read article about Sino-Latin American relations

A must read article for anyone interested in Sino-Latin American relations was published today on SeekingAlpha’s website.  It is written by Erik Bethel, one of the four founders and CEO of Sino-Latin Capital.  I highly recommend it to anyone even mildly interested in the growth of Sino-Latin American relations.

Click here to access the full article direct from SeekingAlpha.

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 [...]

Please visit SeekingAlpha to read the full article

China to create $5 billion fund to invest in Latin America

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.