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Chaufa - Good Connections
Possible flights to Cuba and Mexico, new FDI to Honduras, Jamaica resumes coffee exports, and AidData's new BRI dataset
Hi! Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s Edition covers November 6 to November 12.
This Week’s Top 5 Stories:
During the trip, the PM suggested that direct flights might resume next year.
As the Honduran ambassador to Beijing praised potential economic collaboration to CGTN, the foreign minister discussed a new commercial office and consulate in Shanghai, Chinese firm TexHong announced a $400 million textile factory investment, and Suda International Group would invest in a new consumer goods factory to create 3,000 jobs.
This indicates a new era in Chinese-Honduran economic ties. Prior to establishing diplomatic relations earlier this year, the highest level of Chinese FDI in Honduras was the $49 million Chinese firms invested in 2018.
After a two-month pause, Jamaica resumed coffee exports to China after the Jamaica Agricultural Commodities Regulatory Authority (JACRA) came to an agreement with its Chinese counterpart.
In 2021, Jamaica sent nearly $2 million in coffee beans to the PRC, making it nearly 10% of the island’s exports.
Foreign Minister Wang met with his Surinamese counterpart to discuss deepening political ties, the One China Principle, and economic development. In an interview with the Global Times, FM Ramdin talked about Taiwan, trade, and tourism.
The AidData team at William & Mary published a report on the third edition of their database of global Chinese infrastructure projects.
Key findings include: 1) China remains the world’s largest official source of international development finance, 2) the PRC is refocusing the BRI by reducing its exposure to ESG, distressed debt, and reputational risks, and 3) Beijing is shifting away from its policy to its commercial banks.
Not quite yet taking flight
The news that China may relaunch direct flights to Cuba and Mexico serves as a reminder that post-pandemic, Latin America and the Caribbean (LAC) is still searching for direct and non-stop air connections to the world’s most populated continent.
The first direct commercial air connection wasn’t all that direct – Air China launched a Beijing to São Paulo route in 2006, but it had a stopover in Madrid that both inconvenienced passengers and added additional time. Even worse, the route was only flown twice a week.
Additional direct services to Panama, Mexico, and Cuba were later launched in the 2010s, but most of these had a brief stop-over for refueling.1 Ultimately, the non-stop flights focused on Mexico, namely the AeroMexico Shanghai to MXCD, Hainan Airline Beijing to Tijuana, and China Southern Airline Guangzhou to MXCD routes.
However, with the pandemic all of these flights folded. While cargo flights have started to recover, passenger service has lagged behind. This is part of a larger trouble for Asian-LAC flights restarting, with one of the only non-stop routes being AeroMexico’s flight to Tokyo.
Why all the trouble in establishing direct and non-stop flights? Well, first of all, China to LAC is far. Very, very far. Re-establishing the Mexico City-Shanghai route would make it the 30th longest flight route in the world. As others have explained, extending non-stop or direct flights even further into the region would push the technical limits of modern airplanes (and customers’ patience).
There also apparently isn’t that much demand – no LAC country cracks the top 10 for outbound tourism for Chinese passengers, and from China’s perspective, the region remains a marginal trade partner compared to Europe or Asia. While China is one of LAC’s essential trade and investment partners, the lack of flights suggests that airlines believe this alone won’t make up the difference.
Despite the trouble, more regular and direct China-LAC flights would benefit those living on both sides of the Pacific. For those living apart from their families and friends, reliable and regular flights would mitigate some of the human costs of living abroad. For those hoping to expand people-to-people ties, the appeal of moving to China for business or studying Mandarin (or for Chinese citizens moving to LAC) becomes all the more attractive. And at a commercial level, additional flights could draw more tourism and business deals.
Politics and security
The Brazilian Chamber of Deputies debated China-Brazil scientific cooperation given April’s MOU that covered issues like artificial intelligence, biotechnology, smart cities, climate change, science, and agricultural technology.
Trinidad and Tobago’s foreign minister spoke at the Caribbean-China Economic Diplomacy Forum, where he praised the BRI and China’s COVID-19 assistance.
The supreme courts of China and Venezuela signed a mutual exchange and cooperation agreement.
In an interview, Bolivia’s new ambassador said that his goal was to raise his country’s bilateral relationship to a “strategic partnership” that will allow it to boost its exports and gain access to the BRICS.
It is a bit unclear what the ambassador means by this, as Bolivia already had relations rated at a “strategic partnership”. Perhaps he hopes to further upgrade relations to a comprehensive strategic partnership.
Investment, finance, and infrastructure
Minas Gerais and Jiangsu province signed an MOU renewing their 27-year-old cooperation agreement, while the Brazilian state’s governor announced Guangzhou Wondfo Biotech’s new $4 million Chinese manufacturing investment and Sinomach’s potential financing of new grain silos.
Argentina’s Minister of Transportation, Diego Giuliano, met with China Railway Construction Corporation (CRCC) to discuss a possible $1.5 billion subway.
Ganfeng has indefinitely put its investment plans on hold in Mexico after the local authorities canceled their concessions this summer.
Nicaragua’s government signed an agreement with China State Construction Engineering Corporation to expand and build seven new highways and bridges.
Trade and technology
Costa Rica’s trade minister complained that in the 15 years since the two countries established relations, Chinese imports of Costa Rican goods and investments in the country remain minimal.
However, public works minister Amador will likely seek more money from China’s Export-Import bank for the long-delayed Highway 32.
In an interview with CGTN, Mexican Ambassador to China Seade suggested that direct passenger flights were likely to restart in the near future, especially since the country’s Latin American and Caribbean neighbors have been hoping to restart the key air link to Asia.
Venezuelan and Chinese officials signed a science and technology agreement encompassing sustainable development, innovation, poverty reduction, and spatial information in Chongqing.
An anonymous Taiwanese charity donated nearly 900 rolls of fabric to the Secretariat of Social Works of the President's Wife, “a Guatemalan organization that implements social programs to benefit children and women.”
Taiwan’s aid agency, ICDF, signed an agreement with the Inter-American Institute for Cooperation of Agriculture (IICA) to enhance St. Lucia’s agro-processing and rural development over the next four years.
The Taiwanese government also donated $3.9 million to St. Lucia for eight new bilateral projects largely focused on enhancing state capacity.
Society and Culture
The Hunan Daily signed a cooperation agreement with a Chinese community foundation in the Dominican Republic to use “media as a bridge to promote the economic, commercial and cultural development of the two countries.”
The Chinese embassy in Dominica presented scholarships to 22 local students, earning the praise of the Prime Minister.
Analysis and Opinion
Quoting Margaret Myers, Eric Farnsworth, and Jorge Heine, the Wall Street Journal ran an article arguing that the lack of a U.S.-Uruguay FTA has driven the country closer into China’s arms.
Writing for the China Project, Matheus Andrade argues that China is on the precipice of dominating Latin America’s electric vehicle industry given its access to regional mines, ports, and factories.
Considering Chilean President Boric’s lack of comments on China’s human rights situation during his recent visit, Sacha Hannig writes in La Prensa that “Boric had the opportunity on this trip to break taboos… [but] China accounts for about 40% of Chile's trade, so this concern is always present when crossing a red line.”
Román Ortiz is in the Jamestown Foundation discussing Argentina’s relationship with China, writing that “a decrease in political influence with Buenos Aires would deal a serious blow to the Chinese strategy in Latin America.”
That’s it for now! See you next week.
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