Steely Bridges of Friendship
PRC joins the Andean Community as an observer, BNDES-China Ex-Im investment fund, and Demerara Bridge opens in Guyana. Plus: A WTO Agreement & China's IUU fishing
Welcome back to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers September 29 to October 13.
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The Top 5 Stories:
The PRC officially joined the Andean Community (which is made up of Bolivia, Colombia, Ecuador, and Peru) as an observer state. China applied last July, and the new status allows China’s representatives to observe and speak in certain meetings, though Beijing will not be allowed a vote. The group’s Secretary-General said the development will enhance relations through the “development of political dialogue and the intensification of cooperation.”
Right now, there are six other observer states: Spain, Morocco, Turkey, Greece, Panama, and the Dominican Republic. Notably, the United States is not an observer.
The Andean Community is considerably less prominent than other regional groupings like Mercosur or trade agreements like USMCA, but it does provide some tangible benefits for its members through facilitated border crossings and some free trade. Moreover, the community includes some of China’s closest economic partners (Peru, to a lesser extent Ecuador) and political allies (Bolivia under the MAS). As the region faces increased political turmoil, observer membership gives China another way to maintain its close relationships with these countries.
U.S. Treasury Secretary Bessent claimed that Argentine President Milei is “committed to getting China out.” The comments came after the U.S. government offered Argentina a $20 billion swap line to prop up its economy, which it reportedly conditioned on the country rolling back its $18 billion swap line with the PRC.
Argentina’s central bank has an active $18 billion swap line with China’s central bank, and in recent years, the press has suggested that the PRC had leveraged the swap for political goals. Still, even if the U.S. currency swap and peso purchasing help wean Argentina away from Chinese financing, the country’s reliance on trade with the PRC (as well as PRC infrastructure and commercial investment) means that there really isn’t a way to get China “out” of Argentina.
The Brazilian development bank BNDES and the China Ex-Im Bank created a new $1 billion fund to invest in diverse sectors, including infrastructure, bioeconomy, mining, and agriculture, in the South American country. A few days later, President Lula attended the opening of a $1 billion BYD EV manufacturing plant in Bahia. The founder and president of BYD, Wang Chuanfu, also traveled to Brazil for the event. The plant will reportedly produce 150,000 cars per year in its first year. (Xinhua)
Brazil and China have close financial and investment ties dating back more than two decades, but the size and scope of these developments make them significant. Still, Lula’s participation in the BYD plant inauguration is a bit curious, considering that this Bahia plant seems to be the same one where a Brazilian prosecutor accused a BYD contractor of having used “slave-like” labor conditions.
The Chinese-built Demerara River Bridge officially opened on October 5 in Guyana. The $260 million bridge was built by China Railway Construction Corporation. During the inauguration ceremony, the Chinese Ambassador said it “symbolizes the commitment of Guyana and China to the Belt and Road Initiative.”
Guyana has benefited from heavy Chinese (and Western) investment in the oil sector, but this project shows that the PRC's presence in the Caribbean country is multifaceted. Additionally, in contrast to Secretary of State Rubio’s remarks from earlier this year criticizing what he (incorrectly) thought was a Chinese-built road, this is a genuinely important and eye-catching project that U.S. firms and state financing have not been able to compete with in the region.
Mexican President Sheinbaum said that her government would hold off imposing tariffs of up to 50% on nearly 1,500 products on non-FTA partners (namely China) until after Mexico holds talks with those countries.
In late September, Sheinbaum proposed raising tariffs on non-FTA trade partners. In response, China’s Commerce Ministry (MOFCOM) launched an investigation into whether Mexico’s tariffs were an unfair trade and investment barrier, prompting Sheinbaum to backtrack and propose a high-level working group to resolve trade issues.
All this takes place in the shadow of the 2026 USMCA (formerly NAFTA) trade agreement review. The U.S. government has been critical of Chinese investment and trade with Mexico, especially in sensitive sectors like autos, so this tariff move might initially have been a way to smooth over Washington’s concerns.
Core Brief
Are South America’s illegal and unreported Chinese fishing woes over?
These days, I often feel like the bearer of bad news when it comes to China-LAC updates. But halfway through September, Latin America got some (tentatively) positive news when the World Trade Organization’s (WTO) Agreement on Fisheries Subsidies officially came into effect.
Now, you’d be forgiven for not knowing about the first phase of the WTO fisheries agreement (called Fish I), or even for not realizing that the WTO still functioned at all, given the United States’ multi-year campaign to effectively disable the international body. But this agreement, which is the result of multiple decades of hard-fought negotiating rounds, is both the most significant global trade agreement in years and an agreement that will bind fishermen to more sustainable fishing practices, especially in regions like South America’s coasts.
China’s fishing presence
China is home to the world’s largest fishing fleet, with more than 17,000 vessels operating globally, some of which operate illegal, unreported, or unregulated (IUU) fishing operations. Partly due to the Chinese fishing fleet’s massive size, and partly due to what have historically been weaker environmental regulations from Chinese businesses writ large, Chinese vessels have often been flagged as particularly common practitioners of IUU fishing.
These types of environmental abuses have hit Latin America, particularly the South American countries of Ecuador, Peru, Chile, and Argentina, especially hard. Chinese IUU fishing off South America generated hundreds of millions of dollars in losses for local fishermen, while also forcing South American militaries to expend resources to track these vessels and to make sure they don’t intrude on exclusive economic zones (EEZs).
The glimmer of a solution
The new WTO agreement that China acceded to largely ends subsidies for IUU fishing, which is certainly a start for addressing this problem. Affected South American countries like Ecuador have engaged in bilateral discussions with their Chinese counterparts. Yet because oceans and fisheries management are global issues, resolving Chinese IUU fishing near South America requires multilateral solutions like this agreement.
That said, further work remains. Future agreements will be required to end shipbuilding subsidies that contribute to overcapacity. Moreover, the current agreement has a number of deficiencies, including weak penalties and a lack of transparency enforcement mechanisms. Just this week, InfoDefensa reported that the Chilean Navy is monitoring a Chinese fishing fleet near the Southern Cone country’s shores.
But this is all the more reason for both LAC countries and the United States to continue engaging in these negotiations to resolve this longstanding irritant in Chinese–South American relations.
The Roundup
Politics and diplomacy
Chinese Vice Foreign Minister Miao Deyu attended a China-CELAC foreign ministers dialogue, likely in New York, on September 25 with counterparts from 13 countries, notably including Haiti. Miao contrasted PRC-LAC cooperation with what he characterized as U.S. “unilateralism, protectionism, hegemony and bullying.” He also re-emphasized Xi’s five proposed cooperation programs for the region. (FMPRC)
The President of Dominica, Sylvanie Burton, traveled to Beijing for the Global Leaders’ Meeting on Women. She met President Xi during the trip, where they discussed issues like climate change response and infrastructure. (Xinhua) (People’s Daily)
Colombian President Petro fired all of the country’s Beijing-based diplomats after accusing them of sabotaging relations by canceling meetings and altering his schedule without permission. The news came on the same day that the Colombian foreign minister said that Colombia adhered to Beijing’s “One China Principle.” (CGTN)
The Mexican Chamber of Deputies installed a new China-Mexico Friendship Group with 54 members. Deputy Raymundo Vázquez, a member of the ruling Morena Party, will lead the group.
China’s embassy in Panama accused the United States of “spreading lies” in the country after the U.S. ambassador in the country called the Chinese presence near the Panama Canal “malign.”
The Chinese ambassador to Antigua and Barbuda, Zhang Yanling, is departing her post. In a farewell meeting, the Antiguans’ Foreign Minister praised her for improving relations in infrastructure, health, and education.
Chinese foreign minister Wang Yi discussed UN reform with former Chilean president Michele Bachelet. Bachelet is expected to be nominated by Chile for the UN Secretary General role. (Xinhua)
Investment, finance, and infrastructure
Chinese and Brazilian foreign affairs officials met in São Paolo for the second bilateral forum on financial cooperation, with talks specifically focusing on facilitating transactions in local currencies.
The latest round of China Southern Power Grid Company is reportedly in talks to buy a majority stake worth roughly $4 billion in Transelec, a Chilean transmission firm. China Southern already owns 28% of the firm.
Chinese mining company Gangfeng Lithium announced a new $2 billion investment in its Pozuelos-Pastos Grandes (PPG) project in Salta, Argentina. Meanwhile, Argentine oil company YPF is negotiating with Chinese construction company Wison New Energies to acquire two floating liquefaction units (FLNG).
Trade and technology
The China-Costa Rica Free Trade Committee met virtually on September 18th for its eighth meeting. The two sides discussed issues like “bilateral trade, rules of origin, and investment cooperation” to better implement their FTA.
The Brazilian Minister of Science, Technology, and Innovation, Luciana Santos, gave opening remarks at a Seminar on Innovation, Science, and Technology at the Chinese embassy. The discussions specifically touched on AI, digital transformation, and the energy transition. (TeleSur)
Mirroring how Chinese producers are buying Brazilian soy to replace U.S.-grown beans, Chinese state-owned firm COFCO purchased more than half a million metric tons of canola from Australia in a bid to diversify away from Canadian canola due to geopolitical tensions.
China donated 25 1.8MW generators to Cuba to support the country’s electrical grid, eight of which will reinforce the capacity of the Guanábana power plant in Matanzas.
Montevideo and Beijing agreed to allow Uruguayan bovine gallstone processors to export Argentine, Brazilian, and Uruguayan bovine gallstones to the PRC.
Taiwan
Taiwan’s foreign affairs ministry denied that there were any irregularities in its aid donations to Paraguay. Its statement came after a Paraguayan radio station released audio that allegedly showed corrupt distributions to Senators.
A delegation of 15 Taiwanese businesses traveled to Mexico to explore electric vehicle opportunities. The delegation will also visit Guatemala, Brazil, and Paraguay.
Taiwan donated 1,350 tons of rice to a Haitian Economic and Social Assistance Fund, which will “support families living in extremely precarious conditions throughout the country.”
The Ministry of Agriculture of St. Vincent and the Grenadines received a range of agricultural equipment, including tractors and grading machines, from Taiwan.
Society and culture
China’s Ministry of Foreign Affairs donated $94 million to Trinidad and Tobago in non-refundable grants. The funds will be used for “mutually agreed projects under an agreement on economic and technical co-operation.”
The mayor of the Ecuadorian city of Guayaquil announced it will build a $3 million Chinatown in the city center as part of an effort to boost the local economy and to reconnect the city with its more than 50,000 Chinese-descendant residents.
A small cultural delegation from the Fujianese city of Quanzhou visited Panama City to perform traditional opera styles and to greet locals in traditional clothing. (Xinhua)
Analysis and Opinion
A new report from CSIS claims to provide a new dataset of Chinese (and Russian) military diplomacy in LAC, finding that Brazil and Argentina have had the most military exchanges between 2022 and 2024.
In a study for Brookings, Joshua Meltzer finds that there is some trade circumvention by Chinese producers through Canada and Mexico, although some of the evidence disappears once adjusted for price increases.
In The Diplomat, Evan Ellis explored Peru’s “active neutrality” in relations with Washington and Beijing, arguing that “over the long run, Peru’s ability to successfully balance between the United States and China will depend on putting its own true interests first.” Meanwhile, Victoria Jones suggested that Chinese cultural diplomacy laid the groundwork for Chinese megaprojects in Peru for The Diplomat.
Alonso Illueca wrote about how China’s influence shapes elections in LAC countries like Bolivia, Honduras, Costa Rica, Brazil, and Chile for the China-Global South Project. He also wrote about Nicaragua’s attempts to resuscitate a canal project with China’s help.
Writing for the Guardian, Nesrine Malik argues that China is “eyeing superpower status” in Africa and the Caribbean, suggesting that “China is transacting with poorer countries in an asymmetrical relationship of power.”
That’s it for now, thank you! And a big thank you to the team at CPSI, especially Rasheed and Shem. I am so grateful for their support in publishing this newsletter for the past few years.
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