Grateful for the Opportunity
Dominica's PM in China, Port drama in Peru, PRC defends Venezuela's politics, and a new cruise ship terminal in Panama. Plus: Global Times takes on Brazil's anti-dumping policy
Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s Edition covers March 18 to March 31.
The Top 5 Stories:
On March 25, President Xi sat down with Dominica’s Prime Minister, Roosevelt Skerrit, to commemorate the 20th anniversary of diplomatic relations. PM Skerrit signed several agreements with Premier Li Qiang, including on the Belt and Road Initiative, agriculture, green development, infrastructure construction, and the implementation of the Global Development Initiative. He also met with NPCSC Chairman Zhao Leji on the trip. (China Daily) (Xinhua)
The meetings were part of a longer week-long visit to the country, with the PM attending the Boao Forum for Asia in Hainan, meeting with senior Chinese business leaders, and sitting down for an interview with PRC media.
Peru’s National Port Authority sought to annul Chinese firm COSCO’s exclusive rights to the Port of Chancay megaproject, arguing that an “administrative error” had caused the government to grant the company exclusive rights to the port in 2021. In response, COSCO warned that losing its exclusive rights would affect the “security and legal stability of investment.”
The Chinese government considers the Port of Chancay megaproject to be a signature BRI infrastructure project. It is so important to China’s image in Latin America that President Xi is expected to officially inaugurate the port’s opening himself during his upcoming November trip to Peru.
However, indicating that this development has not scared off other Chinese port investors, Peru awarded Chinese firm Jinzhao a 30-year concession to build a port in the southern Ica region that will require at least $405 million in investments.
The Chinese foreign ministry spoke up in defense of the Maduro regime’s handling of the upcoming elections, saying that China “respects the sovereignty and independence of Venezuela, supports Venezuela in its advances in the electoral system.” China’s ambassador to Caracas further demonstrated the PRC’s support for the regime by both meeting with the Venezuelan foreign minister and signing an agreement on seafood exports with the fisheries minister.
This comes as the Maduro regime’s efforts to stifle the opposition and prevent free and fair elections seemed successful this past week. Various governments in the hemisphere, including the United States, Colombia, and Brazil, issued statements warning the Maduro regime against blocking opposition figures from running in the elections.
In an interview, Paraguay’s president promised to continue trading certain goods with China (namely soybeans) while maintaining strong ties to Taiwan. This prompted China’s foreign ministry to refute President Peña’s comments, with the foreign ministry arguing that China has not imported Paraguayan soy for years (Global Times).
According to the OEC, Paraguay exported $33.5 million to China in 2022, with leather, wood, and scrap copper as the country’s leading industries.
In the middle of this week’s dispute, Taiwan continued to deepen its economic relationship with Paraguay both by eliminating tariffs on Paraguayan pork, wheat flour, textiles, and beef burgers and by hosting Paraguay’s ICT minister to discuss development projects.
After six years of construction, Panama inaugurated a new $206 million cruise ship terminal that was built by China Harbor Engineering Company (CHEC) and Belgian company Jan de Nul.
Core Brief
Taking the ‘Anti’ on Anti-Dumping
As China’s economy has begun to heat back up after the pandemic, international experts and media are increasingly warning of a flood of cheap (and often heavily-subsidized) Chinese manufactures that may undercut local producers. In response, many countries like Brazil, Mexico, and the United States are turning to anti-dumping tariffs to stem the flow of cheap goods.
Most notably, the Financial Times reported two weeks ago that Brazil was doubling-down on anti-dumping investigations to protect itself from a glut of cheap PRC imports. This, in turn, prompted the Global Times (an especially nationalist Chinese newspaper) to fiercely argue against the reporting – but strangely on the grounds of resisting the broader narrative of Chinese dumping, rather than pushing back against the Brazilian tariffs themselves.
Brazilian concerns about Chinese dumping is nothing new – in fact, Brazil was the first Latin American country to impose anti-dumping duties on Chinese imports way back in 1989. Since then, the first Lula administration signed an order that imposed a host of temporary safeguards against Chinese products in 2005, and by 2011 the Brazilian government was still so concerned about its trade imbalance with China that it started engaging in talks on how to up its exports to the PRC. More recently over the past eight months, Brazil launched anti-dumping investigations into a wide variety of Chinese manufactured products, including cold rolled steel, latex gloves, steel wires, and optical wires.
The fear of Chinese dumping goes well beyond Brazil. In Latin America, Mexico and Chile have both recently pursued anti-dumping measures on Chinese steel products.1 Moreover, U.S. experts and policymakers are increasingly fretting about the impact of cheap Chinese wares, with concerns that it could out-compete U.S. manufactures both at home and abroad.
Given that the Western Hemisphere’s business communities and commercial ministries are clearly independently concerned about Chinese dumping, the Global Times’ (GT) took an unusual stance on Brazil’s recent actions. Rather than criticizing the Lula administration’s anti-dumping policies, GT took a gaslighting approach by arguing that “some Western observers may try to provoke anti-China sentiment in Brazil with their theory of ‘China dumps cheap goods on the global market.’” It then excused Brazilian actions as a “re-industrialization” policy to accelerate “its economic and social development,” which GT claims has “nothing to do with the so-called Chinese dumping of cheap goods.”
Of course, GT has a reputation for being a tad extremist and shouldn’t necessarily be taken as Beijing’s official stance on any given issue. But this take indicates that some in the PRC are willing to deal with limited anti-dumping measures in developing countries.2 Rather that new tariffs from relatively minor export destinations, they are more concerned about broader narratives about Chinese subsidization and dumping, as well as trade restrictions from economies that are much larger markets for Chinese goods, such as the United States, the European Union, Japan, and Canada.
Checking in on China-Dominica Relations after 20 years
This past week, Dominica’s Prime Minister Roosevelt Skerrit flew to China for a week-long trip to commemorate 20 years of increasingly tight-knit relations between the two nations. The Prime Minister, who initiated bilateral ties with Beijing following his election in 2004, has been no stranger to the PRC, having at least visited the country in 2004, 2005, 2008, and 2013. He’s also met with China’s leader outside of his travels to China, having met Xi when he stopped through Trinidad and Tobago back in 2013.
Yet the island’s relations with Beijing aren’t just marked by close high-level political dialogue: in recent years, China-Dominica relations have comprehensively involved a range of issues, including donations and financing, infrastructure construction, and multilateral cooperation.
Like many countries across the region, Dominica has benefitted from Chinese donations, including medical supplies and vaccines during the pandemic. Additionally, in recent months the government announced that China would support the construction of six new schools valued at $30 million.
PRC companies were also key in building new infrastructure, like the country’s new international airport and the aptly-named “China-Dominica Friendship Hospital”. Dominica has also benefitted from Chinese financing, with the Inter-American Dialogue reporting that between 2017 and 2021, about 12% of Dominica’s publicly-guaranteed debt was held by the PRC.
Additionally, the two countries have very strong political ties, especially in multilateral fora like the United Nations. For example, take Dominica’s remarks during China’s recent UN human rights review. The Caribbean country’s official statement said that it “supports China in its plans to continue to raise the level of human rights protection” and “notes China’s advancement in all areas of human rights.” Likewise, Dominica was one of 69 countries (and one of nine LAC nations) to sign onto a 2022 letter that defended China’s position on human rights in Xinjiang, Hong Kong, and Tibet.
The support in multilateral fora goes both ways. While Western countries like the United States, the United Kingdom, and Germany questioned the integrity of Dominica’s voting registry and its respect for women’s and LGBTQ rights during the country’s most recent UN human rights review, the PRC’s remarks simply “welcomed the efforts made by Dominica in the promotion and protection of human rights.”
That said, not all is rosy for Dominica’s relationship with China – while the PRC has made some notable donations, trade remains highly imbalanced. For example, in 20223 the PRC only imported $415,000 in goods from the Caribbean country (or less than 2% of Dominica’s total exports). By comparison, this is slightly less in total value (and only slightly higher as a proportion of total exports) as Taiwan-recognizing St. Kitts and Nevis. This is also significantly less than the $714,000 in goods4 it sold to Chinese firms in 2003, one year before it flipped formal recognition to Beijing.
Yet while Dominica’s overall trade flows haven’t necessarily benefited from close ties with the PRC, the benefits of landmark infrastructure projects, donations, and political support are clear. Thus, Dominica is likely to keep its close relationship with China for years to come.
The Roundup
Politics and Society
During a press briefing, Mexico’s president promised that “Chinese investment in Mexico is going to continue,” despite growing tensions with the United States over PRC-backed investment in the country. In response, Beijing’s foreign ministry expressed gratitude for AMLO’s remarks.
The U.S. Coast Guard and the Argentine Navy will start conducting joint exercises in April to combat illegal Chinese fishing off the South American coast.
Commemorating one year of formal diplomatic relations, Honduras’s foreign minister called the switch in bilateral ties “successful,” while the Chinese ambassador penned an op-ed praising bilateral relations based on political, developmental, and civilizational ties.
Managuan officials met with their Tianjin counterparts to discuss the upcoming Tianjin-Nicaragua Business Forum, which will be held on May 8 and 9 with key business leaders from the agriculture, logistics, and law firm sectors. Nicaraguan officials also met with leaders from Hubei province to discuss commercial ties.
As U.S. and British authorities imposed sanctions on Chinese hackers, Canada’s signals intelligence service accused the same Beijing-backed hackers of a widespread cyber-espionage campaign.
Investment, infrastructure, and finance
The Barbados’ auditor general found that a Chinese-built steel-framed housing project for victims of Hurricane Elsa was running $23.64 million, or more than 80%, over budget.
The Chilean ministry of public works awarded the $180 million Rengo and Pichilemu hospital projects to the CRRC Chile Group.
A Chinese foundation donated an unspecified quantity to Cuba’s health system when China’s ambassador to Havana met with President Diaz-Canel, while Trinidad and Tobago’s health ministry received 5,000 blood pressure monitors from the PRC.
A delegation from PowerChina discussed renovating the Afobaka hydroelectric complex and installing new solar capacity in the country with Surinamese President Santokhi in advance of the president’s upcoming trip to Beijing.
The Chinese firm Andes Petroleum agreed to invest an additional $163 million in Ecuador’s Block 62-Tarapoa in a contract extension agreement, which is ultimately expected to produce a long-term income of $969 million.
Chile’s SQM mining company got in a dispute with Chinese mining firm (and shareholder) Tianqi over a partnership with Chile’s state-owned copper producer Codelco.
Trade and Technology
Chinese and Brazilian counterparts met for the 10th China-Brazil Economic and Financial Sub-Committee Meeting, as well as the China-Brazil Financial Forum, in Beijing to discuss a range of issues, including “banking, insurance, capital markets and green finance cooperation.”
Honduras and China recently completed their fourth round of FTA negotiations (Xinhua), and while no specific progress was cited, a few days later the two countries signed an agreement for a $276 million donation for renovating local educational infrastructure.
Continuing to on the path of chilly relations, Argentina’s foreign minister said that her government would not interfere in the private sector to encourage private business to deal with China, although she is expected to stop through China in the coming month.
The Chinese customs administration and Chilean agriculture ministry signed a deal to allow the South American country’s almonds into the country.
Taiwan
Taiwan’s foreign minister Joseph Wu met with a rare congressional delegation led by the head of Brazil’s parliamentary Taiwan Friendship Group. The two sides covered Taiwan-Brazil trade, technology, judicial cooperation, and the situation in the Taiwan Strait.
A Taiwanese firm, Tron-e Technology, signed an agreement with an Ecuadorian company to invest $20 million in assembly and manufacturing key electric bus parts in the South American country.
A joint U.S-Taiwan team of doctors went to St. Kitts and Nevis on an eight-day medical mission to provide general surgical care, including ophthalmology care for individuals with cataracts and glaucoma, dentistry services, and audiology services.
Five Taiwanese nationals were evacuated out of Haiti with the assistance of “like-minded country/countries” (likely the United States and Canada) on March 27.
Taiwan donated roughly $100,000 to St. Vincent to help build laboratories at two secondary schools in St. Vincent and the Grenadines.
Culture and Society
Newly-released data from the U.S. Customs and Border Patrol shows that PRC citizens are now the second largest group coming over the San Diego border crossing, with nearly 21,000 migrants and refugees attempting to cross since October. This places China only behind Colombia (and ahead of Mexico or any individual Northern Triangle country).
The PRC hosted a seminar for 25 Nicaraguan journalists in Beijing to review how to better strengthen cooperation and collaboration in communication work.
Analysis and Opinion
The University of the West Indies, St. Augustine Campus held a virtual discussion on “China-Caribbean Trade Trends & Implications for Regional Growth,” with speakers suggesting a CARICOM-level think tank, coffee exports, and tourism as possible trade opportunities for the region.
Leland Lazarus sat down with Infobae to discuss U.S. and Latin American relations with Taiwan, arguing that the region, especially Guatemala, are essential to the country’s foreign policy.
Dialogo Americas published a piece by Sabina Nicholls that cites experts who argue that “since Panama broke relations with Taiwan to establish them with China, the country’s independence has been extremely compromised.”
Joseph Bouchard warned in the Diplomat that only Chinese companies have been able to put up the necessary capital for new Canadian mining projects, despite the government’s anti-China foreign investment restrictions.
That’s it for now, see you again in two weeks!
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It appears that in one case, one of Chile’s duties was too little too late, with a steel plant recently closing in Huachipato in part due to tough Chinese competition.
This would still be bad news for many Latin American and Caribbean consumers. Anti-dumping and countervailing duties often force domestic consumers to buy more expensive goods while also impairing the efficiency and quality of local industry (for an explainer on the costs of anti-dumping policies, Scott Lincicome’s 2022 and 2023 articles on the topic are a good start).
For those wondering if this was a COVID-based phenomenon, China only imported $474,000 in goods (representing 0.58% of Dominica’s exports) in 2019.
Given that Dominica’s total exports have dropped, it is also roughly the same percentage (1.08%) of the country’s total exports.