Engine of Progress
Xi in Brazil and Peru, Suriname's debt renegotiation, China votes against UN peacekeeping in Haiti, Canada worries about PRC in Mexico
Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers November 11 to November 24.
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The Top 5 Stories:
President Xi made his first visit to Latin America since the pandemic for the APEC summit in Peru and the G20 summit in Brazil. Xi also received a formal state visit in both nations.
In Lima, Xi virtually inaugurated the COSCO-owned and operated Port of Chancay, though the port will start operations in 2025. The two sides also signed several agreements, including a free trade modernization agreement, a joint declaration strengthening their Comprehensive Strategic Partnership, and a FTA with Hong Kong.
Brazil used the opportunity to elevate bilateral relations to a “Community of Shared Future for a Fairer World and a More Sustainable Planet” and signed dozens of new deals, including in areas like trade, science and technology, and health. The China Development Bank (CDB) also loaned $690 million to Brazil’s development bank (BNDES).
APEC featured several high-profile meetings with Xi, including a meeting with Chilean President Boric and a brief conversation with Mexican President Sheinbaum. Argentine President Milei also met with Xi at the G20 summit, and both sides committed to improving commercial ties.
Following years of negotiations, Suriname finally signed a debt rescheduling agreement with China. Payments to one of the PRC’s state-run policy banks, the Export-Import Bank (Ex-Im), will be rescheduled in two phases, while the state-run bank ICBC will have its debt repaid in one tranche.
The Caribbean country currently owes China’s Ex-Im bank about $476 million, of which $140 million is in arrears, while it owes about $68 million to ICBC.
After Canadian Deputy Prime Minister Freeland publicly agreed with U.S. concerns about Chinese investment in Mexico, Mexican President Sheinbaum said that her government is working to replace imports from China with goods made in Mexico. That said, Economic Minister Ebrard later defended Chinese investment in his country.
The remarks come just over a year before the North American countries will hold their first “review” of the trilateral USMCA free trade agreement.
The Vice President of China’s legislature, Li Hongzhong, visited Central America and the Caribbean. During his trip, he:
Discussed education, agriculture, energy, and FTA negotiations with Honduran President Castro and National Congress President Luis Redondo. The VP of Shanghai’s legislature was also in the country to review the Chinese-backed Choluteca Hospital’s construction and to donate two ambulances.
Met with leaders from PARLACEN and Panama’s legislature to discuss areas like agriculture, port development, and international trade. (CGTN)
Sat down with the Dominican Republic’s president, Luis Abinader.
Chinese company CAMC announced it would construct a deep-water port in Bluefields on the Caribbean Sea. At the same time, Nicaraguan President Ortega pitched a new inter-oceanic canal project to 250 Chinese investors who were visiting the country for the XVII China-Latin America and the Caribbean Business Summit.
About 70 Latin American and Caribbean delegates also took part in the two-day conference sponsored by the Chinese Council for the Promotion of Trade and Investment and the PRC’s Political Consultative Conference.
Core Brief
What Xi’s South America adventure reveals about PRC foreign policy
For the first time since before the COVID-19 pandemic, Chinese paramount leader Xi Jinping visited Latin America for a series of meetings and summits with his counterparts. This certainly isn’t his first time to the region, as he’s previously made five trips. But the travel was notable for being his first trip in five years.
This visit made a lot of press because of the inauguration of the Port of Chancay and some pictures that appeared to illustrate the United States’ waning regional influence, but it also revealed some deeper insights into Chinese foreign policy.
First, despite all the concerns about how China’s influence is rising in the Western Hemisphere, the trip shows how Latin America is still stuck at the periphery of Chinese foreign policy.
Since Xi restarted traveling after the pandemic in 2022, he’s been to every other major region aside from Oceania at least once (Southeast Asia, Central Asia, Eastern and Western Europe, the Middle East, and North America). While part of this delay was due to the summits’ timing, Xi’s lack of rush to visit South America reflects the region’s lack of centrality to China’s foreign policy.
Second, though the choice of countries partially reflects the host countries, it also reflects China’s regional priorities.
As shown in the chart above, every other trip through the region (aside from 2019) featured a summit and at least one layover to another country. Xi could have easily popped through Chile or Colombia or another increasingly close friend, but his decision to stick to two of China’s oldest and economically most important regional partners likely reflects just how significant Brazil and Peru are to Chinese foreign policy.
Finally, the biggest announcements were on infrastructure and trade. This generally shows how economic matters are still driving bilateral ties.
Rather than highlighting political,1 social, or military ties (which are often comparatively weak in much of the region), Xi used trade announcements (largely with Brazil, but also with Peru), as well as the major investment at Chancay, to physically show his country’s economic power. While onlookers increasingly fret about China’s regional influence, it is important to note that this is still largely economic, rather than political or military, in nature.
The Roundup
Politics, society, and security
The presidents of Bolivia and China shook hands on the sidelines of the G20 in Brazil, discussing financial cooperation, trade, and mining. They also discussed a trans-Oceanic rail project that would end at the new Port of Chancay. (Telesur)
Two Peruvian media companies (América TV and El Comercio) signed agreements with China Media Group to produce content for the Chinese market.
Signaling their opposition, China (and Russia) refused to discuss a U.S.-proposed resolution that would transform the current Kenya-led multinational force mission in Haiti into a UN peacekeeping mission.
China and Colombia held the 8th China-Colombia Dialogue in Bogotá to discuss increasing trade, cultural exchange, and technological cooperation. (Xinhua)
A PRC general recently visited Uruguay to tour local facilities that had benefited from Chinese donations.
Investment, infrastructure, and finance
The vice president of the China International Development Cooperation Agency (CIDCA) discussedstrategic projects, including possible agriculture cooperation, with Panama’s foreign minister.
The CIDCA official also traveled to Cuba to discuss China’s emergency assistance to the Caribbean country.
Despite tense bilateral relations, the Canada-China Business Council hosted an indigenous trade mission to Beijing to prompt new Chinese investment in the Canadian First Nations communities.
The Chinese Shijing Solar Group announced a new $800 million solar cell factory in Puebla, Mexico that will produce 2GW of solar cells, making it the largest factory of its kind in Latin America.
China’s embassy in El Salvador inaugurated the construction of the country’s new International Fair and Convention Center (CIFCO).
Both Ecuador and Bolivia are hoping to benefit from the newly-inaugurated Port of Chancay in Peru. The port may reduce transport times and costs for these countries.
Trade and Technology
The Chinese embassy in Costa Rica issued a statement calling for “a fair and non-discriminatory business environment” as Huawei tries to bid in the country’s 5G auction (Costa Rica had previously banned Huawei from providing equipment for the telecommunications system).
Colombia announced a new 35% tariff on iron and steel wiring from countries without FTAs. This would generally target Chinese exports.
Taiwan
Former Taiwanese President Tsai visited Toronto, marking the first time a former Taiwanese president had visited the North American country. She urged Canada to promote Taiwan’s accession to the CPTPP trade agreement and met with Canadian MPs.
St. Lucia received a $5.09 million grant from Taiwan “to support strategic development projects,” including education and housing projects. The ROC also donated Mandarin Chinese textbooks to a local secondary school.
A delegation of economic officials from Guatemala and Belize led by the Central American Bank for Economic Integration (CABEI) met with the Taiwanese Deputy Minister of Economic Affairs to discuss energy transition and green transportation. They also agreed to a new project to help female entrepreneurs.
Guatemala and Taiwan agreed to cooperate on “improv[ing] the collection of qualitative and quantitative data” in government-run public opinion surveys.
Seven of Taiwan’s diplomatic allies, including six from LAC (Paraguay, Saint Kitts and Nevis, Saint Vincent and the Grenadines, Guatemala, Belize, and Haiti) advocated for Taiwan’s inclusion in the international COP climate change summit.
On the sidelines of the G20 summit, Paraguayan President Peña defended his country’s relationship with Taiwan, saying “We have trade with mainland China but we are not willing to give up a friendship with the Government of the Republic of China Taiwan.”
Meanwhile, Taiwan’s Executive Yuan eliminated tariffs on 17 Paraguayan products.
Analysis and Opinion
The Wall Street Journal published a long-form piece (with lots of graphs and maps!) on “How China capitalized on U.S. indifference in Latin America” by James Areddy, Ryan Dubé, and Roque Ruiz.
Mie Hoejris Dahl argues in Foreign Policy that China’s infrastructure strategy in Latin America is changing. He argues that this reflects a pivot, rather than an abandonment, of the Belt and Road Initiative (BRI) model.
The Economist has a story about how China is courting Brazil as part of the G20 summit.
That’s it for now, see you again in two weeks!
Make sure you don’t miss the next issue of Chaufa 👇
One of the big asterisks to this was the upgrading of diplomatic relations with Brazil. That said, what exactly the diplomatic upgrade entails beyond a whole lot of words isn’t exactly clear.