Chaufa - Bearing Fruit
Chaufa - Bearing Fruit
South American presidents travel for BRI summit, Suriname debt renegotiations, a new dry dock in the Bahamas, and Caribbean passport sales
Hi! Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s Edition covers October 9 to October 15.
This Week’s Top 5 Stories:
Four South American presidents are either in the midst of traveling or planning to travel to China in the coming weeks, all of which has been timed around the BRI summit on October 17-18:
Chilean President Boric landed in Chengdu on October 14 for “Chile Week” activities in the city (which are also taking place in Shanghai, Beijing, and Shenzhen). He is expected to travel to Beijing for the BRI summit and to meet President Xi.
Also arriving in China on October 14, Argentine President Fernandez embarked on his last foreign trip. He is expected to attend the BRI summit, travel to Shanghai for a lithium forum, and meet with President Xi.
Colombian President Petro is expected to arrive in China a few days after the summit, and local business leaders hope the meeting will be an opportunity to join the BRI.
Uruguay’s President Pou is preparing for his trip to China at the end of November (likely November 21-23), where he hopes to restart FTA negotiations to upgrade the relationship to a “Comprehensive Strategic Partnership.”
The PRC’s embassy in San Jose issued a rare statement condemning Costa Rican officials for deeming Chinese 5G networks a cybersecurity threat, warning that the comments “gravely affect the confidence and expectations of Chinese companies to undertake economic-trade activities in Costa Rica.” (Diario Extra) (Reuters) (La Republica)
Suriname’s debt renegotiation trade talks remain ongoing, with the country receiving a counter-offer this week and the Caribbean country’s foreign minister expected to travel to Beijing in early November to further discuss the issue.
The Bahamas approved a $600 million shipyard expansion project. The new docks, which will be among the largest in the Western Hemisphere, will be built by CSSC Qingdao Beihai Shipbuilding. (St Kitts and Nevis Observer) (Maritime Executive)
The Miami Herald wrote about the risk of Caribbean countries’ passport sales to Chinese citizens. Leland Lazarus warned that sales in St. Kitts and St. Lucia could give Chinese citizens undue influence that could result in the termination of relations with Taiwan.
My Take
Suriname and the BRI: the Limits of “Debt Trap Diplomacy”
Suriname’s long-running debt re-negotiations with China moved slightly forward this week with the news that China had given a counteroffer Paramaribo’s remaining $545 million debt.
This debt has been accumulated for nearly two decades. Though Suriname has been a BRI member since 2018, $553 million of the $773 million it received in loans from China’s Export-Import Bank (EXIM) came before it signed onto the initiative for infrastructure projects like an airport expansion, road rehabilitation, and new housing. All of these loans from China quickly added up to more than 15% of the country’s 2021 GDP.
With such a heavy debt burden, Suriname has been discussing renegotiating its debt with China since at least 2021. While it is likely that the debt re-negotiations will conclude successfully like the ones in Ecuador or Zambia, Paramaribo’s ongoing struggles illustrate three limitations of the BRI as China prepares to celebrate 10 years of President Xi’s hallmark policy:
1) Joining the BRI resulted in few tangible projects for countries like Suriname. Years before the BRI’s expansion to Latin America in 2018, Chinese policy encouraged firms to look abroad for new investments and construction. The BRI lent a flashy cover for this trend, but it was not itself the force that brought Chinese lending and construction to the region. Very little changed for countries like Suriname when they joined the BRI – in fact, it appears that most of the benefits occurred prior to its accession.
2) As others have written, Chinese institutions are likely dragging their feet in debt re-negotiations out of a desire to get the best commercial deal possible rather than to achieve Chinese grand strategic goals. Judging from previous negotiations in countries like Ecuador, a Chinese debt renegotiation with Suriname is more likely to result in burdening EXIM than in Beijing acquiring new strategic assets (such as the “debt-trap diplomacy” narrative would suggest).
3) Suriname shows why the BRI celebration is likely to be a snooze-fest. More likely than not, few to no major new projects or funding streams will be announced at the 10th anniversary Belt and Road Forum. Last decade, Chinese government banks and institutions had a lot more money and freedom to spend, but with the economy tightening and the government still renegotiating poorly designed loans in countries like Suriname, there’s little incentive for Beijing to go on a similar spending spree.
The Roundup
Politics and security
China’s ambassador to Honduras met with the Mayor of San Pedro Sula to discuss economic development and a potential twinning agreement. (La Prensa)
The leader of the Tibetan government in exile met with several Mexican legislators and spoke at the Universidad Autonoma Metropolitana, while the a prominent senator and a senior Mexican diplomat spoke at a forum with China’s ambassador on improving bilateral commercial and economic engagement.
Chinese dissident Chen Siming received asylum in Canada this week after several weeks stuck in the Taipei airport. (VOA)
The president of Brazil’s Chamber of Deputies will travel to China from October 15-22 to meet with the head of the National People Congress Standing Committee.
Investment, finance, and infrastructure
The head of Jamaica’s Masterbuilders Association complained that the government is favoring Chinese contractors over local workmen.
Medellin’s public works authority awarded the $260 million Hidroituango dam project to Colombian firm Schrader Camargo and its PRC partner Yellow River.
Nuevo Leon’s governor will travel to Shanghai this week to close an investment deal for the Mexican state with Chinese auto parts manufacturer Tuopu.
Argentina will receive $517 million from ICBC and the Bank of China for the Jorge Cepernic and Néstor Kirchner dams, while Tucumán province will sign an MOU on a $950 million multi-purpose dam project built by Powerchina and Panedile Argentina (UTE).
Trade and technology
A Reuters analysis found that China saved $1.17 billion by buying Venezuelan oil that had been discounted due to U.S. sanctions.
After three years of deliberations, two Panamanian chicken and beef processing plants were approved by Chinese customs authorities, allowing the Central American country to increase its exports to the PRC.
Brazil-China agriculture cooperation expanded this week when the country’s agriculture secretary met with representatives from the Citic to discuss fertilizers, pesticides, and recovering degraded pastures, while the Mayor of Amargosa signed an MOU with a Shandong company on agriculture technology exchange.
Taiwan
The prime ministers of St. Lucia, St. Vincent, and St. Kitts all reaffirmed their commitment to Taipei last week during Taiwan National Day celebrations.
Following a similar donation last week to St. Vincent, the Taiwanese embassy in St. Lucia donated $400,000 of equipment for local police forces.
Guatemala’s foreign minister praised his country’s relationship with Taiwan, thanking the country for its public health, education, agriculture, and workforce training assistance.
Paraguay’s Minister of Justice and the head of the National Congress attended Taiwan National Day celebrations in Asuncion.
Analysis and Opinion
The Boston University Global Development Policy Center issued a new report assessing the economic benefits and environmental and sovereign debt risks of the Belt and Road Initiative on its 10th anniversary.
Writing in the Diplomat, Xiaofeng Wang and Otaviano Canuto argue that Argentina’s potential dollarization leaves questions about how to wind-down the China-Argentina central bank line swap.
Also in the Diplomat, Joseph Bouchard and Yulina Goto write that Chinese lithium extraction in Bolivia makes La Paz complicit in Chinese human rights abuses in Xinjiang.
In response to a Financial Times article on U.S. concerns over Peru’s relationship to Beijing, Jorge Heine complained that Washington’s fears were overblown and were more likely to hurt the region than help it.
Francisco Urdinez and Maria Montt argue in Americas Quarterly that Chilean President Boric needs to maintain an economically “solid and pragmatic” relationship with China and avoid discussing the Chinese human rights abuses he had previously criticized as a congressman.
That’s it for now! See you next week.
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