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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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The Economist takes a deeper look at China’s overseas investment

ODI-lay hee-ho – The expanding scale and scope of China’s outward direct investment

[Source] : The Economist

The remote, tribal state of Jharkhand in eastern India is the spiritual home of the country’s steel industry. It is the site of India’s first steel mill, built in 1908 with Indian money and much national pride. But a new steel plant in the same state takes a different approach. Owned by Electrosteels Steel, it has been built by Chinese contractors and fitted out with Chinese equipment, despite the government’s reluctance to award visas to Chinese workers. Now the plant is looking to expand its capacity. It is hoping China will provide the $250m investment it requires.

The hopes are not unreasonable. China is famous for attracting foreign direct investment (FDI). But a growing amount of investment is also flowing in the opposite direction. According to official figures, China’s outward direct investment (ODI) exceeded $77 billion in 2012, an increase of 12.6% on the previous year, even as inflows of FDI fell for the first time since the height of the global financial crisis.

Yet China is still far from buying up the world. It is a relative newcomer to big direct investments, and has yet to boast a large hoard of such assets. Belgium, the Netherlands and Spain all have bigger holdings. And since 2005, though China has ploughed over $50 billion into America, that sum represents less than 2% of America’s total stock of inward investment, according to the Heritage Foundation in Washington, DC.

China’s ODI would be greater if host countries were more hospitable. The Heritage Foundation reckons that over $200 billion-worth of potential deals have fallen through due to “a nasty surprise of some sort”, including political opposition and regulatory obstacles. In the West, Chinese direct investment is viewed with suspicion partly because it is still dominated by state-owned firms. These are considered a threat to competitive markets and, occasionally, to national security.

Click here to read the complete article

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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 this year (2012). Soy exports remain a powerful driver of the Paraguayan Economy (and to a lesser degree because of more diversity of their exports -- in Argentina and Uruguay as well).

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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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”.

Click here to read the complete article

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

[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.

Click here to read the complete article

 

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.

Click here to read the complete article

 

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.

Click here to read the complete article

 

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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Latin America on Obama’s re-election – US views of the region – US Latin American Foreign Policy

Image courtesy of Nasa – Screenshot from NASA’s globe software World Wind using a public domain layer, such as Blue Marble, MODIS, Landsat, SRTM, USGS or GLOBE

As many news programs, news papers, bloggers, and commentators of all sorts have mentioned — Latin America (Immigration Reform and the War on Drugs to) where virtually ignored throughout the entire campaign and mentioned only one time during the Presidential Debates by Mitt Romney.

Yes there are a great many problems around the world.  Particularly in the Asia-Pacific, North Africa, and Middle East regions.  Not to mention the Eurozone economic crisis, or Hurricane Sandy, but to totally ignore 3/4 of the geographic space in the Western Hemisphere… As your author I say “Shame on you United States of America, and I implore your elected officials to begin paying more attention to your neighbors down South!”

Below CSA presents some articles from different perspectives and sources which are examining this question of why the US has so ignored the region of Latin America.

 

Reuters: Analysis: Obama faces Latin America revolt over drugs, trade

By Brian Winter
SAO PAULO | Fri Nov 9, 2012 9:55am EST
(Reuters) – President Barack Obama will face an unprecedented revolt by Latin American countries against the U.S.-led drug war during his second term and he also may struggle to pass new trade deals as the region once known as “America’s backyard” flexes its muscles like never before.

Washington’s ability to influence events in Latin America has arguably never been lower. The new reality is as much a product of the United States’ economic struggles as a wave of democracy and greater prosperity that has swept much of the region of 580 million people in the past decade or so.

It’s not that the United States is reviled now – far from it. Although a few vocally anti-U.S. leaders like Venezuela’s Hugo Chavez tend to grab the media spotlight, Obama has warm or cordial relations with Brazil, Mexico and other big countries in the region.

Most Latin American leaders were rooting, either privately or publicly, for his re-election on Tuesday.

Click here to read the complete article direct from Reuters

 

The Guatemala Times: The US elections: a view from Latin America

It has been this year’s most notable absentee: whatever happened to Latin America as a theme in the presidential campaign?

A great paradox in Tuesday’s United States elections is that of the growing significance of the Hispanic vote and the almost total absence of Latin America on the candidates’ agenda. The Hispanic vote is particularly important in swing states such as Florida and Nevada, although its presence is much wider—in California, Texas, Arizona, New York, New Mexico and Illinois, among other states.

Though the relationship between Hispanic voters and black candidates has been historically a complex one, Hispanics came through for Barack Obama in 2008, with 65% of their votes going to the candidate of “hope and change”. This time, polls indicate as much as 70% of them will vote for the incumbent president. This could make the difference between winning or losing in Nevada (where Obama is ahead, albeit by a small margin) and in Florida (which is essentially tied).

In years to come, the state to watch is Texas. According to many observers, the growing Mexican-American population there, whose most visible up-and-coming leader is Julian Castro, the charismatic mayor of San Antonio, who delivered a rousing keynote at the Democratic Convention in Charlotte last August, will mean that some point in the near future the Hispanic vote will have Texas switch from a Republican to a Democratic majority state. With California and New York already in that camp, flipping Texas may mean relegating the Republican party to a permanent minority condition in the Electoral College, confined to the Deep South and the Rocky Mountain states.

Click here to read the complete article direct from the Guatemala Times

 

World Policy Blog: The U.S. Should Stop Ignoring Latin America

By Robert Valencia

A great share of the world grew disappointed after seeing the last debate between President Barack Obama and former Governor Mitt Romney, where foreign policy rhetoric geared heavily toward Middle East and Chinese affairs. Latin America only received one brief mention by Romney. Given the current domestic gridlock in Washington D.C. and the mounting turmoil in Syria and Afghanistan, Latin America is doomed to be on the back burner once again, but a new White House administration should change this by curbing the War on Drugs and strengthening its bonds with Brazil, the second largest economy in the Americas

Latin Americans should not expect a 180-degree change in U.S. policies after the election. During the first Republican debates this year, three presidential hopefuls—Romney included—talked about Cuba and Venezuela’s possible connections with Al-Qaeda, and expressed their wish to see Fidel Castro dead. Yet no Republican candidate offered concrete steps in fostering democracy, strengthening economic bonds or improving security.

Both Obama and Romney have vowed to continue the U.S. War on Drugs. At the Summit of the Americas in Colombia, President Obama emphasized that he would not change the draconian policy, despite its dire consequences for those both north and south of Rio Grande. Likewise, Romney made clear on U.S. Hispanic TV channel Univision that he would continue the same drug policies as the current administration. No, the White House will not change its position, despite the outrageous death toll in Mexico, the new routes for smuggling narcotics onto U.S. streets, the indiscriminate incarceration of U.S. citizens of color for possessing small amounts of drugs, and the disastrous effects on Central American villages of military raids against drug kingpins.

Click here to read the complete article direct from the World Policy Blog

 

NACLA (North American Congress on Latin America): Obama’s Election and the Caribbean: What Does it Mean?

Kevin Edmonds
The Other Side of Paradise
November 8, 2012

Early Wednesday morning the Caribbean breathed a sigh of relief with the re-election of Barack Obama. A Romney victory would have ushered in a period of uncertainty, as it was expected that he would pursue a more aggressive stance towards Cuba and other left leaning governments in the region. During the debates however, it became apparent that Latin America and the Caribbean was not an area of deep concern for either candidate as the foreign policy discussion was intensely focused on matters relating to the potential conflict with Iran, security in post-Gaddafi Libya, Israel/Palestine, Syria and the trade imbalance with China.

While Caribbean Prime Ministers immediately extended their congratulations to Obama, their expressions of cautious optimism also came with calls for more meaningful engagement with the region. For example, Dominica’s Prime Minister Roosevelt Skerrit sent his congratulations to Obama, remarking that “The relationship between the United States and Dominica continues to be strong, based on mutual respect…we work very diligently on matters relating to regional security and we look forward to advancing those efforts. Clearly, the U.S. focus is on anti-terrorism matters and they moved away from issues relating to development in the region. But I am hoping that the new term of President Obama there would be some kind of re-direction towards developmental issues.”

Click here to read the complete article direct from NACLA

 

The Huffington Post: Latin America 2013: A Look Ahead

By Eric FarnsworthVice President, Council of the Americas

Assuming that the world does not end, according to the Mayan calendar in December, 2013 will be an important year south of the U.S. border. There are a number of issues to watch in determining the hemisphere’s direction, although most depend less on the Nov. 6 election results and more on factors that are out of White House control. Savvy observers of the region will watch the 10 “C’s” as the real policy drivers.

The first of these is Castro, as in Raul and Fidel. The U.S. election may bring a moderate tightening or loosening of U.S. restrictions on engagement with the island. The Cuban regime may or may not continue its episodic policy liberalization — Cuban perestroika — as a means to extend rather than overturn the Cuban system. But the real driver of change will be the death of one or both of the Castros. While it’s true that no one has yet won a bet predicting their death, even the Castro brothers will succumb at some point to nature. Each passing year makes that more likely. When they do, there will be a power struggle on the island, and the United States will be faced with the critical decision of how to respond. This will be a game-changer, with historic implications, sucking the oxygen out of other hemispheric policy matters at least for a time. It is the one issue above all others that has the potential to scramble hemispheric policy, putting bilateral relations on the road to normalization and removing an irritant in the broader hemispheric agenda. Or not. The truth is that nobody knows what will come after the Castros, but the U.S. response must be nuanced and appropriate so as to encourage, rather than discourage, the advent of true democracy on the island.

The second “C” is related: Chavez. Having been re-elected Oct. 7 to another presidential term, Venezuela’s Hugo Chavez nonetheless is battling cancer, which some say is quite serious; others give a more optimistic prognosis. Whatever the truth, it appears that Chavez is taking steps to position his supporters to continue the Bolivarian Revolution after he passes, most notably with the elevation of Nicolás Maduro to the vice presidency. Still, nobody in Venezuela appears to have the same charisma as Chavez, whose margin of victory in October was much less than in previous elections. Chavez won; Chavismo apparently took it on the chin. A power struggle is a strong possibility after Chavez passes away. Here, again, if Chavez dies, the United States will face an immediate challenge, working with others in the hemispheric including Brazil and Colombia to midwife a peaceful transition with a hoped for institution of the transparent social democratic model that has worked wonders in Brazil, Chile, Peru, Uruguay, and elsewhere in the Americas.

Click here to read the complete article direct from The Huffington Post

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CCTV: Exclusive: Fmr. U.S. ambassador to China: U.S.-China relations very improtant

November 11, 2012 -- China --, Newswire, Sino-U.S. Relations Comments Off

The former US Ambassador to China, Jon Huntsman, says it’s vital that newly re-elected President Barack Obama takes steps to improve America’s relationship with China. Mr Huntsman has been speaking to CCTV’s Mike Walter about China’s National Party Congress, and the country’s relationship with the United States.

Click here to watch this exclusive interview with former Ambassador to China and Governor of the State of Utah on CCTV America’s.

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