UPDATE: Arg/ Spain/ China Drama: Argentina pushes on with YPF expropriation

The saga continues. Read more by clicking the link below to access the full story direct from Reuters

(Reuters) – Argentine lawmakers took their first step toward nationalizing the country’s No. 1 oil company on Wednesday when a Senate committee agreed on the outline of a bill to put YPF under state control.

President Cristina Fernandez unveiled plans on Monday to seize a 51 percent controlling stake in YPF from Spain’s Repsol (REP.MC), sparking a chorus of condemnation from Madrid to Washington. Trade partners, already disgruntled by protectionist measures adopted by Buenos Aires, warned the move could hobble private investment in Latin America’s No. 3 economy.

Click here to read the article in its entirety direct from Reuters

FT reports Argentina swoop scuppers China oil deal

To respect the high quality journalism produced by the Financial Times I will honor their request not to copy and paste their content.

However click here to read about the soap opera that has become Sinopec of China’s attempt to buy 57% of Repsol of Spain, stake in Argentina’s oil company YPF (Yacimientos Petrolíferos Fiscales) before it was nationalized by Buenos Aires.

Do you drink water?

Do you drink water?  from renzo alva on Vimeo.

This video/ report is a work in progress in terms of the translation, editing , etc. This video is of a movement/ protest in Lima, Peru in which took place when it became known the JV partnership between US- Newmont Mining and Peruvian Miner Buenaventura is would jeopardize the drinking water of thousands of people by passing laws which would never be permitted in mines which Newmont owns in North America and around the world.

This type of news might not make the sensational 24/7 news cycle, but it is an incredibly important issue. Water is key to our survival, and there are ways to extract the metals and energy products considering their record high prices, which we as a society depend on, however… it CAN BE DONE without contaminating our water supplies.

This video was filmed, directed and edited by Mr. Renzo Alva Hurtado

I (your author), Bennett A. Reiss Iberico assisted in some of the translation work and in advising Mr. Alva on how to better deliver his message to the outside world.

I rarely allow comments on this blog due to the amount of spam I receive. For this update I am making an exception and welcome any feedback readers may have. ~ Bennett A. Reiss Iberico

Two sides of Peru’s mining boom – Al Jazeera

Disussion: Global demand for tropical hardwoods

Here is one side: China Denies Plundering World’s Rain Forests

BEIJING — China on Tuesday denied accusations of plundering the world’s rain forests to meet booming demand for wood.

Environment groups say China is at the heart of a global trade for lumber it sells to markets in the United States and Europe and that much of its plywood exports comes from illegal logging.

Domestic demand from a fast-growing economy only adds to the problem, they say.

“As for the question that China’s large demand for timber assists illegal logging and smuggling from Asia, this statement has no basis,”State Forestry Administration spokesman Cao Qingyao told a news conference.

“The Chinese government consistently upholds and puts in practice collective international responsibility, opposing and cracking down on illegal logging cin illegal wood imports,” Cao said. “We have very strict import controls.”

Click here to read the complete article

Lets start a discussion.  If interested shoot me an email. bennett.reiss@linksinolatino.com

Reporting from Lima, Peru — Latam-China News Summary

Happy International Women’s Day to readers around the globe.

There’s been a spike in the past week or so of news articles pertaining to China – Latin America.  Beyond the ever changing dynamics of Sino-Latin American relations financial news media is increasingly questioning the sustainability of growth in Latin America.  Specifically in countries that are heavily dependent on commodity exports to China. Here’s a few of the major stories which caught my attention:

Latin America warned over China slowdown – Financial Times

Latin America’s economies have become increasingly resilient to global shocks but they have not prepared for a possible slowdown in China, according to the Institute of International Finance, which represents the global banking industry.

Most of the countries in the region, whose economic growth was expected to slow to 3.7 per cent this year from 4 per cent last year due to weakness in the eurozone, should use the present commodity super-cycle to undertake more serious reforms to improve productivity, said Ramón Aracena, IIF deputy director of Latin America.

Click here to read the complete article from the Financial Times

China’s Rise and Latin America: A Global, Long-Term Perspective – Carnegieendowment

Over the past decade, China has become an increasingly important economic partner for Latin America. But this trend must be placed in proper perspective. Even as trade and investment links between China and Latin America have grown, the United States and Europe are—and will continue to be—vital trading partners for the region. Moreover, China’s rise is only one part of a broader shift towards a world in which emerging markets have greater economic weight. Policymakers in Latin America need to view China’s growing influence within the context of both current economic patterns and long-term global trends.

Click here to read the complete article from the Carnegieendowment

Citi launches Latin America Trade Desk in China – BBR

Citi’s Global Transaction Services has launched its new Latin America Trade Desk in Shanghai, China, to serve as a link for Latin American clients to Asia.

The new trade desk will cater specific needs of importers and exporters, as well as market practices for trading between these two regions.

It will offer tailored suite of trade services and finance solutions, including access to Citi’s global trade network and local expertise through its branch network in over 40 countries in Asia and Latin America.

Click here to read the complete article from the BBR (Banking Services Review)

Commentary: China’s rising wages may benefit Latin America – Miami Herald via Kansas City Star

Good news for Latin America: wages in China, Vietnam and other Asian countries are rising faster than expected, leading growing numbers of multinational firms to move their manufacturing plants to Mexico and other countries closer to the U.S. market.

The Feb. 19 announcement by Foxconn Technology Group, which assembles iPads and other products for Apple, Dell, Nokia, Motorola and other firms in China, that it has raised pay for its workers by 16 to 25 percent was just the latest example of how fast Chinese salaries are rising. It was Foxconn’s third wage hike since 2010.

“More and more companies are telling us that wages are rising faster than they expected,” says Harold Sirkin, managing partner of the Boston Consulting Group, which recently published a study on China’s wages.

Click here to read the complete article

Latin America seen very dependent on commodities – Market Watch

SAO PAULO — Latin America must take steps to defend itself from a growing reliance on commodities and China, while currency appreciation is warranted given the economic improvements relative to developed markets, the Institute of International Finance said on Thursday.

“Growing dependency on commodities and China requires improving lines of defense against sharp and sustained terms of trade losses,” the IIF said in its latest regional overview.

The region’s improvements relative to developed economies “suggest that appreciation pressures on local currencies are to some extent warranted,” the IIF said. To cope, countries must improve productivity and reduce government spending deficits “so as to widen the scope for interest-rate cuts,” it said.

Click here to read the complete article from the MarketWatch

Latam growth speeding, reforms needed -IIF Reuters

RIO DE JANEIRO, March 8 (Reuters) – Economic growth in Latin America should speed to 4.5 percent in 2013 thanks to monetary stimulus and steadier global conditions, raising the risk of policy complacency, the Institute of International Finance said on Thursday.

Demand for the region’s raw material exports has also strengthened local currencies, highlighting the need for reforms to boost productivity and reduce government deficits, the IIF said in a report presented by managing director Charles Dallara.

“While stronger macroeconomic positions have bolstered Latin America’s resilience to external shocks, luck has been on the region’s side,” the report said. Higher commodities prices are bolstering the region’s economies, according to the report, but masking bad policy in some countries.

Click here to read the complete article from the MarketWatch

Ecuador-China sign first contract for “Mega Mine”

Reuters reports — Ecuador signs first large-scale mining contract

QUITO, March 5 (Reuters) – Ecuador’s President Rafael Correa on Tuesday signed the country’s first ever large-scale mining contract, which calls for Chinese-owned Ecuacorriente to invest $1.4 billion in the El Mirador copper project.

Ecuador has no mining industry to speak of and Correa, a U.S. trained economist, is eager to attract investment to tap the country’s big copper, gold and silver deposits and diversify the economy from its dependency on oil exports.

Correa is trying to reap lofty benefits from miners and negotiations with Ecuacorriente and Canada’s Kinross, which plans to develop the Fruta del Norte gold project, have taken much longer than initially expected.

The 21st century’s most important trade network – The Asia-Pacific triangle

Having followed, written about and participated in the growth of China – Latin America’s exchange over the past 10 years, I must say it is refreshing to see the increasing awareness around the globe of the growth of Asia-Pacific cooperation.  Every week news media around the world publish news and analysis pertaining not only to China – Latin America, but increasingly about the geopolitical triangle of the greater Asia-Pacific region.

Aljazeera added to the wealth today by publishing the transcript of a interview they conducted with former Peruvian Ambassador to China, and current Ambassador to the US - Harold Forsyth.  In the interview Aljazeera reporter Eddie Walshe discusses with Ambassador Forsyth his perspective on the growing importance of Asia-Pacific cooperation and more particularly, how Peru fits into the Asia-Pacific triangle of the Greater Asia region (with a special emphasis on China), North America and South America.

As someone who personally believes the growth of trade and exchange between nations of the Asia Pacific and the Americas (North & South) will be the most important network of exchange this century, I highly recommend giving it a read.

Click here to access Peru’s place in the triangle of Asia-Pacific security, published by Aljazeera

What people around the world define as the Asia-Pacific region varies widely, for your author (me) I consider it to include all nations, cultures and territories on both sides of the Pacific Ocean.  This means “Oceania,” despite being a region in itself must naturally be included.  It also tends to include India, because although India is usually not considered a “Pacific” nation, it is a major geopolitical power in this equation.

Within the Asia-Pacific region there is however a level of exchange and interaction which is far more significant when looking at the greater region as a whole — and that, in my opinion is the triangular interaction of North East Asia (China, South Korea, Japan), North America, and South America.  Of course, one could argue discounting Russia, India, Australia and the nations of SE Asia and leaves many players out of the equation. I only do so because their links to the America’s are relatively small when compared with China, South Korea and Japan.

Why is this triangular network so important you ask?  Let’s quickly review some facts which come to mind pertaining to a few specific categories — Economic output & International Trade, Commodity production/ consumption (energy, metals and agriculture), and geopolitical security

• The Asia-Pacific region includes the world’s three largest economies — The United States, China (PRC), and Japan.
• These three economies make up a large portion of global economic output, commodity consumption/production, and trade.
• In terms of commodity consumption & production you find within this triangle (to name a few):
• Top 5 iron ore producers – Brazil, China, Australia, India and Russia
• Top 4 iron ore consumers – China, Russia, Japan and South Korea
• A few of the top energy producers, Russia (#1), the US, China, Venezuela and ever more significant levels of energy production coming from Brazil and Canada
• The top 5 oil consumers – United States, China, Japan, Russia, and India
• The Top 5 copper producers – Chile, Peru, the US, China, Australia
• 3/5 of the top copper consumers – China, India & the US
• Major sources of precious metal production (Gold & Silver) Russia, China, Australia, Peru, Chile & the US
• Major sources of precious metal demand – China, & the US
• Major centers of global food production – Russia, the US and South America as a whole
• Major centers of food consumption – China, India, & the US
• Finally, the Asia-Pacific region includes many of the 21st century’s most potentially volatile geopolitical security issues. To name a few:
• US-China relations
• NE Asia which includes everything from
• The balance of power between China, Japan, and Korea (and Russia) … and ultimately how the US factors into this region
• The Korean Peninsula and all the related issues from re-unification of North & South Korea to proliferation of arms by North Korea
• The South China Seas
• The quagmire of complex inter-country relations in SE Asia
• Taiwan
• ETC

“China Files ofrece una mirada muy genuina y latinoamericana sobre China”: Caracol Noticias

China-Files

Caracol Radio y Caracol Noticias, dos de los más importantes noticieros de radio y televisión en Colombia, destacaron a China Files como el portal de referencia para las personas interesadas en las relaciones entre China y América Latina. En una nota presentada por Gustavo Gómez y Darío Arizmendi -uno de los símbolos de la radio colombiana- resaltaron la labor periodística de nuestro equipo. Reproducimos el video de Caracol Noticias. Si quieren ver la nota deben ir al recuadro Noticias II y al minuto 7 de la transmisión.

Para ver el video, haz clic aquí.

China – Latin America stories bombard the inter-webs

Case Study on Chinese FDI in Peruvian Natural Resources – Americas’ Quarterly

China’s huge appetite for energy and minerals to fuel its expanding economy has strained international markets for oil, natural gas, iron ore, coal, copper, nickel, aluminum, and other resources. To satisfy China’s hunger for raw materials, Chinese companies, backed by the government, have been acquiring

equity stakes in natural resource companies, extending loans to mining and petroleum investors, and writing long-term procurement contracts for oil and minerals in Africa, Latin America, Australia, Canada, and other resource-rich regions.

In fact, more than half of Chinese foreign direct investment (FDI) in natural resources is in Latin America. It is concentrated in 34 major projects that stretch from Venezuela and Ecuador through Brazil, Bolivia and Peru to Argentina and Chile. Since China launched its “going out” strategy, encouraging companies to become more competitive, total Chinese FDI in Latin America has increased nearly sevenfold, from $226 million in 2003 to $1.6 billion in 2009.

Click here for the complete story

For Latin America, China Both Friend And Foe – Forbes

Is China more friend than foe for countries like Brazil and Mexico? A study to be published in Americas Quarterly journal this week shows that the relationship is actually quite well balanced.

By 2004, China’s arrival in Latin America was being felt with the full force of a fire breathing dragon. China imports totaled $17.9 billion to Latin American countries, more than double where they were just four years prior at $7 billion. At the time, I asked Brazil’s Trade Minister at the time, Luis Fernando Furlan, what the country could do to avoid China’s footsteps. His take at the time was basically to design better mousetraps, under the idea that Brazil’s trading partners would buy items like shoes because the design was cool. That might be true to some extent, but the textile and apparel industry in Brazil and throughout Latin America has lost market share abroad and domestically to China competitors. The good news, the ground they are losing is not as bad as some might have thought when China’s presence was just starting to be felt there.

Click here for the complete story

Latam: exporters rue Chinese rivals – FT report on the Quarterly America study

There’s no doubt that China’s growth has created a market ripe for Latin America exports, particularly natural resources. But have Chinese manufacturers – using those same imported raw materials – hurt the sales of their LatAm rivals? The evidence has mostly been anecdotal. Until now.

Click here for the complete article

Christopher Sabatini: China’s Geostrategic Designs on Latin America – Fox News Latino

In the last 5 years China’s military activities in Latin America and the Caribbean have grown at an unprecedented rate. Beijing now regularly hosts officers from Colombia, Chile, Mexico, Peru and Uruguay in its military academies, has expanded arms sales and technology transfers to countries like Argentina, Bolivia, Brazil and Venezuela, and in October last year even sent a navy ship to the Caribbean.

Is China—now Brazil and Chile’s number-one trade partner—buttressing its economic interests in the Western

Hemisphere with military ties and alliances? Is this the Middle Kingdom’s equivalent of President Barack Obama’s Pacific pivot to balance China’s saber rattling in Asia?

Click here for the complete article

China plants bitter seeds in South American farmland – Washington Times

BUENOS AIRES — Few were surprised when Venezuela announced a deal with China last week to restore 1.4 million acres of unproductive farmland across the oil-rich but impoverished South American nation.

China increasingly is buying farmland and agricultural companies in South America to feed its ever-growing population, currently estimated to be 1.34 billion.

The most important aspect of China’s agricultural investment in Latin America is that “it is a part of the increasing physical footprint of the People’s Republic of China that is just beginning to occur,” said Evan Ellis, an assistant professor at National Defense University in Washington.

Click here for the complete article

China’s export to Latin America: Corruption – CNN

By Ariel C. Armony – Special to CNN

Shoes. Toys. Clothing. China has inundated Latin American markets with cheap goods. This flooding has jolted local producers and generated demands for government measures to protect domestic industries. But there is one Chinese export that has not received enough attention among policymakers, media analysts and public opinion: Corruption.

Though China and Latin America have different values and attitudes, both have traditionally lacked transparency in government. They operate according to informal business dealings which, in turn, undermine or further weaken the rule of law. Corrupt practices exacerbate distortions in public administration, impair sustainable development, erode a nation’s legal culture, and worsen inequality and poverty.

Click here for the complete article