Fundamental Interests
Fundamental Interests
A China-Caribbean forum in Hainan, retaliation against Canadian tariffs, and the a Sino-Mexico meeting on fentanyl. Plus: The state of the PRC's arms sales to LAC.
Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers September 2 to September 15.
Listen on Spotify or read the full edition below:
The Top 5 Stories:
The PRC hosted the Fourth China-Caribbean Economic and Trade Cooperation Forum in Hainan from September 12-14, where government representatives discussed cooperation in areas like green, low-carbon development and digital technologies (Xinhua). Cuba also claimed that the forum provided an opportunity to denounce the U.S. blockade against the island.
The forum had originally been established in 2004.
The joint statement also mentioned that all sides agreed to “enhanced trade facilitation and liberalization, with a focus on strengthening cooperation in areas like animal and plant inspection and quarantine, health care and tourism, as well as mutual investment in sectors.”
The China Society for Human Rights Studies, Renmin University of China, and Fluminense Federal University in Brazil hosted the first China-Latin America and Caribbean (LAC) States Roundtable on Human Rights in Rio de Janeiro. The roundtable brought together 120 senior officials, scholars, experts and representatives from social organizations and think tanks from 17 countries (Global Times) (China Daily).
Chinese representatives used the forum to highlight the PRC’s “practice of ensuring the rule of law in counter-terrorism and de-radicalization in China's Xinjiang region” and argued there was “no ‘perfect model’ for human rights issues.”
After Canada imposed tariffs on key Chinese exports a few weeks ago, Ottawa hinted that it might impose duties on other goods like critical minerals, batteries, and semiconductors. In retaliation, China filed a complaint with the WTO and launched an anti-dumping investigation into Canadian canola oil.
Canada had previously announced it would impose a 100% tariff on Chinese EVs and a 25% duty on Chinese steel and aluminum in late August. The action follows similar moves by the European Union and United States.
Despite comments to the contrary by the PRC’s Foreign Ministry Director-General for Latin America and the Caribbean Cai Wei, Panamanian President Mulino said that there has been no formal Chinese request for restarting FTA negotiations and that there was no concrete news on the subject.
Recently, Chinese trade official Li Xingqian had claimed that the Panamanian government expressed interest in restarting FTA negotiations. Panama and China had previously held FTA negotiations after they established relations in 2017, but negotiations ultimately stalled.
Meeting in Mexico City, China and Mexico held the second round of the Working Group on Precursor Chemicals. They used the meeting define “the areas of collaboration to prevent and combat illegal drug manufacturing activities, as well as the diversion of precursor chemicals into illegal channels.”
The working group held its first meeting last October, and it is key to addressing illegal fentanyl precursor chemical exports through Mexico that are fueling the fentanyl epidemic in the United States.
Core Brief
Who are China’s main regional military and defense partners?
This week featured several bouts of news about PRC-LAC military and defense cooperation. Typically, economic and trade relations are usually at the forefront of bilateral ties. But news of the Chilean minister of defense promising greater bilateral defense cooperation to military tribunal exchanges in Peru to joint military exercises in Brazil show that military and defense cooperation is still relevant, if a minor aspect, of regional bilateral ties with China.
That said, China’s defense cooperation isn’t spread evenly across the region.1 Close ties with China’s competitors (namely the United States) and local concerns have inhibited cooperation in certain countries over others.
It’s often hard to compare defense cooperation between countries due to the opacity of the military and defense sectors, but one imperfect measure is the Stockholm International Peace Research Institute (SIPRI)’s database on arms transfers. As shown in the graph below, it’s pretty clear that just a few countries dominate China’s arms sales industry, and in turn Chinese defense cooperation.
Taken as no surprise, the countries that top the list of Chinese arms transfer recipients are those that have been hostile to the United States in recent years: Venezuela and Bolivia, as well as Ecuador under former President Correa. Peru and Argentina have both benefited from Chinese arms sales (though these generally occurred over a decade ago), as have the Caribbean nations of Trinidad and Tobago and the Bahamas.
Venezuela received the most diverse array of shipments since 2010, including trainer/combat aircraft, air search radar, anti-tank missiles, light tanks, and anti-ship missiles. Bolivia also received trainer/combat aircraft, armored personnel carriers (APC), and helicopters, while the other countries listed in the graph generally received items like APCs, radar, and patrol boats.
Of course, these military arms transfers do not perfectly encompass the complexity of military ties and ignores key defense relationships.2 Most notably, even though SIPRI has not tracked any Chinese arms transfers to Havana, Cuba has reportedly been hosting Chinese signals intelligence spy bases for years. Additionally, Chile’s military has long been a close exchange partner with the Chinese People’s Liberation Army (PLA), though this kind of relationship is not captured in SIPRI’s data either.
But taken together, the SIPRI data helps show that only a few LAC countries have embarked on close defense ties with China, and that this level of cooperation varies from country to country.
The Roundup
Politics and Security
China’s foreign minister sat down with Brazilian international affairs adviser to President Lula da Silva, Celso Amorim, in St. Petersburg on the sidelines of the BRICS summit. The meeting came after the two countries declined Switzerland’s offer to provide a platform for their Ukraine peace proposal.
PRC Special Representative on Latin American Affairs Qiu Xiaoqi attented independence day celebrations at the Mexican and Central American embassies in Beijing in early September, while President Xi sent a message congratulations and best wishes to Nicaragua on the anniversary of its independence. (PRCMFA - Mexico) (PRCMFA – Central America)
Venezuelan President Nicolas Maduro sent Chinese President a letter to commemorate one year since their bilateral meeting and upgrading of relations to an “all weather” partnership last year.
Military justices from the Peruvian and Chinese military courts met in Lima to discuss the “current situation of military justice in both countries.”
The Chilean minister of defense expressed “her willingness to continuously expand defense cooperation with China” during a visit to Beijing.
Leaders from the Montevideo and Shanghai international relations offices signed an agreement on bilateral friendship and cooperation between the Uruguayan and Chinese cities.
U.S. and Chinese troops will both participate in military exercises in central Brazil.
Ironically, the exercises will be called “Operation Formosa” (Formosa is a former name for Taiwan).
Investment, infrastructure, and finance
Peruvian Minister of Transportation Raúl Pérez Reyes held a meeting with the Chinese Deputy Minister of Industry and Information Technology of China Shan Zhongde signed an MOU on transportation and communications infrastructure.
China Civil Engineering Construction Corporation (CCECC) signed an MOU with the mayor of the Honduran capital Central District to begin feasibility studies of the $550 million Río del Hombre dam.
Surinamese company Staatsolie Maatschappij Suriname N.V. (Staatsolie) and PetroChina signed production sharing contracts that gives PetroChina exploration, development and production rights in Block 14 and Block 15.
The Chilean Supreme Court rejected Chinese mining firm Tianqi’s attempts to stop the lithium agreement between the local SQM and the state-owned Codelco to operate in the Atacama saltwater. Tianqi owns 20% of the shares of SQM.
Trade and Technology
Because Chinese negotiators have still not agreed to Honduras’s proposals at the most recent round of FTA negotiations, the two countries have not yet set a date for the final round of talks.
Guyana’s Minister of Foreign Affairs signed an MOU on trade facilitation and green development with China’s Vice Minister of Commerce.
The head of one of Colombia’s largest steel firms, Diaco, gave an interview to La Republica where he expressed concerns about Chinese steel dumping in international markets.
Chinese rideshare service Didi announced its plans to invest $52 million to bring 100,000 BYD, JAC and Changan vehicles to Mexico by 2030. It comes as BYD’s decision to build a factory in Mexico has apparently been postponed until after the United States’ November elections.
The Ecuadorian Minister of Agriculture, Danilo Palacios, sat down with the Chinese Ambassador to Ecuador, Chen Guoyou, to discuss possible new dairy exports to the PRC.
The head of the Peruvian National Society of Artisanal Fishing (Sonapescal) complained about the Chinese fishing fleet that frequents near Peru’s waters every year.
A Chinese trade mission led by Yang Zhenwu, the chairman of the Standing Committee of the National People's Assembly of China, visited Uruguay to meet with local businesses and legislators to discuss trade, investment and technological innovation.
Taiwan
The head of Taiwan’s National Security Bureau (NSB) traveled to Paraguay to meet with nine Latin American and Caribbean intelligence heads to sign an MOU and to discuss “political and economic infiltration activities of the Chinese Communist Party.” Director-General Tsai Ming-yen also met with Paraguayan President Peña during the trip.
A Taiwanese commercial mission made up of companies in the green energy, high-tech, pharmaceuticals, textiles, and finance sectors visited Belize to discuss trade and investment opportunities. A similar delegation traveled to Guatemala.
As Taiwan and Belize celebrated 35 years of diplomatic relations, the Caribbean country signed an agreement with Taiwan to fund a new project on enhancing women's economic empowerment entitled “Increasing Economic Power for Micro-Entrepreneurs.”
Ten St. Lucian farmers received 450-gallon water tanks and drip lines from the Taiwan Technical Mission (TTM) on September 11. The Taiwanese said that the donation “aimed to help local farmers improve water management and increase agricultural productivity.”
Two senior U.S. diplomats representing Latin American and China-focused portfolios traveled to Paraguay in support of the country’s formal relations with Taiwan.
Culture and Society
Journalists from the China Media Group and the Nicaraguan Sandinista Communicators met virtually to discuss improving media work, including the influence of social networks.
The Bahamas China Friendship Association held a calligraphy & wine tasting event in conjunction with Caribbean Wines & Spirit to improve outreach to the local community.
The Chinese Ambassador to Trinidad and Tobago gifted the San Juan North Secondary School with 22 laptop computers. The school had previously been designated as a “China-Trinidad and Tobago Friendship Classroom.”
China joined Brazil, France, Chile, and Venezuela in donating to Bolivia to help address recent forest fires. The PRC specifically offered economic support in the crisis.
Analysis and Opinion
Adam Ratzlaff published a new report with Florida International University on China's science diplomacy in the Americas.
A piece in Clarin on Chinese-Latin American trade by Sascha Hanning and Juan Pablo Cardenal argued that “the winner of the relationship is China. It achieved its goals while its Latin American partners saw its expectations totally or partially frustrated.”
Ana Rosa Quintana-Lovett wrote about Taiwan’s remaining relationships in Latin America and the Caribbean for GIS Reports, suggesting that Paraguay was highly likely to break ties in the near future, while Guatemala is on “delicate ground” and Haiti’s “poverty and crime” has kept China “at a distance.”
That’s it for now, see you again in two weeks!
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Of course, multiple LAC countries have long recognized Taiwan over the PRC, but their militaries have also benefited from their relationship with the Republic of China. More specifically, Belize, Guatemala, Honduras, and Paraguay all purchased Bell helicopters from Taiwan between 2012 and 2018.
The dataset also does not record any arms transfer since 2018 (Bolivia), although it seems unlikely that there had been no arms sales in the past five years.