Nope, No Brinkmanship Here
Labor concerns in Uruguay, new lithium plant in Argentina, tension in the Bahamas, and the OAS on China. Plus: Panama's new flight to Beijing.
Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers February 10 to February 23.
Listen on Spotify
The Top 5 Stories:
China Machinery Engineering Corporation was criminally reported for illegal labor conditions on an electricity infrastructure project in Uruguay. The company currently employs 200 Uruguayans and 500 foreigners (mostly Ecuadorians and Chinese), and it is accused of creating dangerous working conditions, such as crowded living conditions and a lack of drinking water.
Questions of labor conditions under Chinese companies have long been an issue in the region, but a recent case in Brazil when the government forced the closure of a BYD factory site after the Chinese contractor was accused of creating slavery-like working conditions has raised the salience of the problem.
Although a key committee advanced two new Russian and Chinese lithium investments in Bolivia, ultimately the Andean country’s lower house of congress refused to approve the contracts with the Chinese CBC consortium and Russian firm Uranium One. Protests had also broken out over the potential investments.
Owing to the recent opening of the Port of Chancay in Peru, both Colombia and Ecuador opened new maritime routes to China. The former will connect Shanghai with Buenaventura, while the latter will ship goods from Guayaquil to Shanghai. Both routes will connect through Chancay.
At the same time, the General Manager of COSCO shipping (which runs the Port of Chancay) said in a recent interview that his company was consequently looking to invest in a new rail line from Colombia’s interior to Santa Marta. He suggested that the investment would likely be dependent on Colombia’s accession to the Belt and Road Initiative.
The candidates for the OAS Secretary-General race, Suriname Foreign Minister Albert Ramdin and Paraguayan Foreign Minister Rubén Ramírez Lezcano presented different views on the PRC. The former said that “all countries should have the same opportunity to be able to speak, influence and contribute”, while the latter “warned during the session that the OAS must ensure that the support it receives from external nations ‘does not divert even a millimeter’ the organization from its objectives.”
China has been a formal observer of the Organization of American States (OAS) since 2004, and the two sides signed a formal cooperation agreement to create a dedicated fund in 2014. That said, the United States has historically been the largest financial contributor to the organization.
China Ganfeng Lithium inaugurated its $790 million plant in Salta: the Mariana Project. This is the company’s first plant in Argentina, and it has a production capacity of 20,000 tons of lithium chloride per year.
Although Argentina’s president ran on an anti-China platform during the election, this comes as the Milei administration seeks to reinvigorate economic ties with the PRC. Recently, La Nacion reported that the Casa Rosada is looking to restart mega-dam construction in Santa Cruz, another signature Chinese project in the country.
Core Brief
Why the New Panama-China Flight Matters
Earlier this month, Panama City’s international airport announced that Air China would likely return to the Central American country later this summer. Direct flights (via Houston) between Panama City and Beijing were originally launched in April 2018 after the two countries established diplomatic ties. However, the two sides were forced to pause travel during the COVID-19 pandemic.
On the surface, this new flight symbolizes an end (admittedly, a late end) to those COVID-19 disruptions. China, of course, was quite slow to recover from the pandemic. While most other direct flights (such as those to Mexico, Cuba, and Brazil) relaunched over the last couple of years, this one had held off. Though most other facets of life have returned post-COVID, this shows that China is truly reintegrated into the region’s economy post-COVID.
More significantly, this new flight comes as Panama’s relations with China are increasingly a source of tension with the United States. These tensions notably resulted in Panama’s formal withdrawal from the BRI. Yet while Panama is planning to withdraw from the political BRI agreement, this new flight route shows how firms between the two countries plan to continue engaging with one another. Much like other investment, trade, and financing interactions, commercial integration between the two countries won’t necessarily end just because of the withdrawal of a symbolic political accord.
The Roundup
Politics and diplomacy
After the U.S. Charge d’Affaires in the Bahamas criticized China’s “malign influence” in the Caribbean country, both the Bahamian Prime Minister and Foreign Minister claimed their country’s neutrality in any spats between Beijing and Washington. The Chinese Ambassador to Nassau also condemned the remarks.
The head of the Chinese foreign ministry’s Latin America and Caribbean section discussed food, energy, and international affairs cooperation with Cuban President Díaz-Canel. (Granma) Meanwhile, most of Latin America and the Caribbean’s ambassadors to Beijing met with PRC Assistant Foreign Minister Miao Deyu on February 12 to discuss broad cooperation. (FMPRC)
Venezuela’s ambassador to Beijing sat down with the head of the CCP’s International Department to transmit a message from President Maduro and recent political events in each country. (VTV)
The U.S. State Department revoked visas for two Costa Rican legislators who had criticized San Jose’s decision to bar Huawei from Costa Rica’s 5G network.
Investment, finance, and infrastructure
Panama City’s primary airport said that it expects China Air to relaunch direct flights to the PRC later this summer. This expansion would likely revive a previous flight route, and it comes as other airlines from around the world look to restart flights to Panama.
Sinopec and Canadian firm New Stratus Energy proposed to jointly operate Ecuador’s Sacha oil field. Also known as Block 60, the field is Ecuador’s most productive, producing 75,000 barrels per day (or 15% of Ecuador’s output).
Responding to the local Chinese ambassador’s threats that PRC companies might start withdrawing investment from the country, Costa Rica’s trade minister said “There has not been a significant flow of investment in Costa Rica of Chinese origin, it is because there is no interest from China in Costa Rica's value proposition” during a recent congressional hearing.
Cuba inaugurated a Chinese-built solar plant in Cotorro on February 22, just as a high-level Chinese foreign ministry official visited the country. (TV Cubana)
Chinese firm MMG purchased $500 million in Brazilian nickel mines from Anglo American.
Trade and Technology
The Mexican economy ministry launched a new anti-dumping investigation against Chinese cardboard producers, which could lead to new tariffs or quotas. At the same time, Mexico extended a quota on Chinese stainless steel pipes for five years. Similarly, Peru proposed provincial anti-dumping duties on Chinese standard tableware imports.
The Governor of the Chilean province of Ñuble hosted the President of the Shandong Province Trade and Investment Association to discuss agriculture, tourism, and renewable energy cooperation. Meanwhile, companies from Inner Mongolia traveled throughout Uruguay and Brazil and signed 17 cooperation agreements. (CGTN)
While Honduras’s trade deficit with China continued to grow in the years after the two countries established relations, the country’s agriculture minister said the Central American nation will export about 1,000 tons of coffee to the PRC this year. Exports of shrimp are also picking up, with Honduras granting certificates for about 40 tons of shrimp exports.
For the first time, Ecuador exporters shipped canned tuna to China. The exports were possible due to last year’s Free Trade Agreement.
Taiwan
Several potential Honduran opposition presidential candidates, including former Vice President Nasralla and two National Party candidates, expressed support for Taiwan and potentially re-establishing diplomatic ties with the Republic of China.
The Taiwan Cooperation Partnership Trust facilitated by the Central American Bank for Economic Integration (CABEI) announced it will fund feasibility studies for the Northern Regional and Punta Gorda Town hospitals in Belize with nearly $100,000.
After Secretary Rubio’s trip to Central America, the Taiwanese ambassador to Guatemala City said that Taiwan sees the country as a potential economic hub and that “we can build a more strategic alliance between the three countries [Guatemala, Taiwan, and the United States] also based on the same shared values.”
Taiwan’s embassy in St. Kitts and Nevis donated videoconferencing equipment to that government’s foreign ministry and the office of Joseph Nathaniel France Hospital.
The Taiwan Technical Mission (TTM) in Saint Lucia signed an MOU on agriculture data collection with the Caribbean Cooperative Measurement, Reporting, and Verification (CCMRV) Hub.
The $6.3 million Taiwan-Paraguay Intelligent Technology Park in Minga Guazú was launched by representatives from the two countries in mid-February.
Society and culture
CNOOC Petroleum Guyana Limited (CPGL) and the 20th China Medical Team from Jiangsu Province donated a new surgical imaging system to Georgetown Public Hospital in Guyana.
Analysis and Opinion
Former Biden Administration State Department official Eric Jacobstein wrote in the New York Times that “As Mr. Trump alienates our neighbors [in Latin America] through threats and ultimatums, Beijing stands ready to step into the void.” Gimena Sánchez-Garzoli wrote a piece on the same theme for WOLA.
The BBC published a piece by Matt Murphy, Jake Horton, and Erwan Rivault maps where Chinese companies have built and invested near the Panama Canal.
CSIS’s Ryan Berg gave testimony to a U.S. House of Representatives subcommittee on “the PRC’s strategic port Investments in the Western Hemisphere and the implications for homeland security,” including investments near Panama. Isaac Kardon from the Carnegie Endowment also provided notable testimony.
An article in Dialogue Earth by David Papannah details how Chinese agriculture projects in the Caribbean are aiding in the region’s food security efforts.
Sarah Camacho writes for the Carnegie Endowment that “the canal crisis that Panama is facing may be geographically small, but it could have large ramifications for the region and U.S.-China competition in Latin America.”
George Washington University Professor Y. Tony Yang wrote some analysis for the Global Taiwan Institute on how dismantling USAID will affect Taiwan’s and China’s global influence, including across Latin America and the Caribbean.
That’s it for now, see you again in two weeks!
Make sure you don’t miss the next issue of Chaufa 👇