The Heart of Diplomacy
Colombia considers the BRI, a possible Sino-Panama FTA, and illegal Chinese fishing in Peru. Plus: Milei plans a January 2025 visit to the PRC.
Welcome to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers September 30 to October 14.
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The Top 5 Stories:
During a trip to Beijing, Foreign Minister (and former Ambassador to the United States) Luis Gilberto Murillo announced Colombia’s intention to join President Xi’s signature Belt and Road Initiative (BRI) by forming a bilateral working group to negotiate Bogota’s accession.
Also during the trip, Murillo discussed Taiwan and the country’s One China Policy with FM Wang Yi, while a conversation with the Minister of Industry and Information Technology, Jin Zhuanglong, resulted in talks about new energy vehicles (NEVs), green energy and artificial intelligence. (Xinhua) (People’s Daily)
President of Argentina (and long-running China critic) Javier Milei confirmed he would travel to China in January 2025 to attend a planned Community of Latin American and Caribbean States (CELAC) meeting. He also said that “I was very pleasantly surprised with China. It is a very interesting business partner, because it does not demand anything, the only thing they ask is that [we] do not bother them.”
This marks a slow-burning but notable policy shift for Milei. During the presidential campaign, he took a notable hardline against future relations with Beijing, saying “I'm not going to do business with China. I'm not going to do business with any communist.”
Peruvian fishermen went on strike to protest Chinese ships entering Peru’s exclusive economic zone (EEZ). Partially in response, the Peruvian Ministry of Production issued a decree mandating that “foreign vessels must have a satellite control system on board to enter” Peru’s waters. The fishermen blame a shortage of squid on the Chinese fishing boats’ intrusion into Peruvian waters, though the Ministry of Production attributed the shortage to the El Niño phenomenon.
Illegal, unreported, and unregulated (IUU) fishing by Chinese fishermen has been a problem for South American countries for years. While they have set up working groups and engaged diplomatically with the PRC to address the issue, local fishermen remain concerned about the effects of large Chinese fleets near their waters.
The Panamanian Minister of Commerce suggested that his country might restart FTA negotiations with China by 2025. The Panamanians hope that a new treaty could open up new meat export opportunities for the country’s farmers.
For example, the President of Panama’s National Pig Farmers Association contrasted a possible PRC agreement with the existing U.S.-Panama trade promotion agreement when he said “A treaty with China must be beneficial; it would give us an opportunity that the U.S. will not.”
This news follows months of hints by Panamanian and Chinese officials that they may restart some kind of trade negotiations under newly-inaugurated President José Raúl Mulino.
The PRC company CCCC loaned about $70 million to the Nicaraguan Company of Aqueducts and Sanitary Sewerage (Enacal) to build a solar plant in the Nicaraguan town of Masaya. The project brings Nicaragua’s external debt to the PRC to nearly $1 billion.
Since Managua and Beijing established ties in late 2021, relations have rapidly deepened with a new FTA and numerous infrastructure projects. This solar plant is just the latest sign of this growing relationship.
Core Brief
Let’s not make a mountain out of molehill over Milei’s China visit
When Argentine President Javier Milei remarked that he’d be visiting China early next year for a CELAC meeting, a number of specialists made hay out of Milei’s U-turn. A LinkedIn post by DC-based analyst Edward Owen is emblematic of this kind of thought, with these folks suggesting that Milei’s upcoming travel to China was more a political,1 rather than economic, pivot reflective of U.S. policy failures.
To quote Owen, he thinks that Milei’s travel represents how “Washington DC has[n’t] managed to capitalize on his natural affections for the United States” and that “internal ideological division in the United States” is hampering its “ability to win geopolitical micro-competitions, such as the one taking place over Argentina at present.”
Frankly, this is a bit over the top.
First of all, the U.S. government would probably be the first to dispute that a country’s engagement with China reflects some failure in competition with the United States. Many U.S. officials, including Secretary of State Blinken and Secretary of the Treasury Yellen, have gone out of their way to tell U.S. allies and partners that no one has to “choose” between the U.S. and China.2
Second, contrary to what Owens suggests, Milei’s comments really are about economics. How do I know ? Well, when he announced his trip, he also said China “is a very interesting business partner, because it does not demand anything, the only thing they ask is that [we] do not bother them.”
Moreover, due to the actions of prior Argentine administrations, China is simply too wrapped up in Argentina’s economy for him to ignore Beijing. From China’s multi-billion-dollar currency swap to massive investments in the country’s extractive sectors to trading more than $24 billion in goods and services, it would be economically suicidal for Milei to rip-up his country’s ties to the PRC. For now, this is just economic reality — the same economic reality that has kept China as one of the United States’ top trading partners.3
Lastly, regarding the travel itself, folks are really reading too far into it.
First, for now it’s just for a China-CELAC meeting, not a stand-alone state visit that merits a lot of hoopla.4 Sure, Milei could have skipped the event (much like he did with Mercosur), but it could have repercussions beyond just his country’s relationship with the PRC.
Second, just because a leader travels to the PRC doesn’t mean that it reflects a disdain for the United States or a deep admiration for the Chinese Communist Party. German Chancellor Scholz was in Beijing this past April, while UK Foreign Minister David Lammy is headed there just over 100 days into the new Labour government’s tenure. No one is suggesting that this reflects the United States losing a “micro-competition” with China over Germany or the UK.
Much like Bolsonaro (and most nearly every other democratically-elected leader who pooh-poohs China on the campaign trail), Milei came into office and realized that a country of 1 billion people was too big to ignore. This truly was a notable policy shift from the campaign. But when considering Argentina’s long-standing economic relationship with China, it’s no wonder that Milei ultimately decided to hold some face-to-face talks in Beijing. To say that this some failure of U.S. policy5 or a reflection of a new Argentine pivot to Beijing would simply be a gross exaggeration.
The Roundup
Politics and Security
A delegation of 12 Paraguayan legislators traveled to China (despite Paraguay’s diplomatic relations with Taiwan) to discuss culture and literature at the University of Sichuan. (CGTN)
The deputy head of China’s legislature, Tie Ning, traveled to Mexico to discuss economic exchange and Mexico’s judicial reform with the President of the Mexican Senate Gerardo Fernández Noroña.
Venezuelan Vice President Delcy Rodríguez discussed working towards a new “political and economic world order” with the PRC’s ambassador.
China’s Ambassador to Barbados, Yan Xiusheng, met with the Caribbean country’s Chief Justice and Foreign Minister as he prepares to depart his post.
Investment, infrastructure, and finance
Guyana’s Vice President ruled out banning Chinese supermarkets from the country after some locals expressed “concerns that the increasing number of [Chinese] supermarkets is outcompeting their nearby locally-owned counterparts with cheaper prices.”
Chinese firm Yadea said it would build an $80 million electric bike and motorcycle final assembly plant in Mexico. It also has its sights on expanding investment into Brazil in the future.
The Chinese Ambassador to Honduras said that the Central American country was focused on generating PRC investment in the “textile industry, renewable energy and construction.”
Trade and Technology
The PRC General Customs Administration (GCA) announced that it had re-permitted Chilean poultry farmers to export to China. The GCA has banned Chilean poultry exports in August 2023 over avian flu concerns.
A Chinese deputy science minister, as well as representatives from the Chinese Academy of Science, the National Foundation of Natural Science and technological universities traveled to Cuba to meet with the country’s PM and science minister for the 13th Joint Science and Technology Commission in Havana.
Panama’s Center for Innovation in Space Sciences (Cenacep) signed an agreement with China's Deep Space Exploration Laboratory (DSEL) to launch exchange, training and training programs for Panamanian scientists and students.
The Yuan Longping High-Tech Agriculture Company hosted Antigua and Barbuda Shadow Agriculture Minister Algernon Watts for a three-week trip to discuss cultivating hybrid corn and peppers using advanced agricultural techniques.
Taiwan
After the leader of Belize’s opposition abstained from a resolution on “Belize’s celebration of its 35th year of friendship with Taiwan,” Moses Shyne Barrow later made a statement that he “felt grateful... for all that Taiwan has done for both UDP and PUP governments.”
Taiwanese manufacturer Foxconn announced that they will build their “largest [computer] chip plant on the planet” to build Nvidia’s GB200 superchips in Jalisco, Mexico.
The Paraguayan Senate approved a $150 million non-refundable financial contribution from Taiwan that will be used to support areas like security and defense, social housing, public health, and science and technology.
Belize received $20,000 from Taiwan to “support two micro-projects aimed at managing illegal wildlife trafficking and trade within the Belize Forest Department.”
The Deputy Prime Ministers of St. Vincent and Belize, as well the Guatemalan First Lady, attended the ROC National Day celebrations in Taiwan on October 10. The speakers of St. Lucia’s Senate and House of Assembly also visited the island and met with President Lai.
Culture and Society
Following several similar stories by other newspapers, the Economist reported from Mexico and Colombia about Chinese migrants passing through Latin America as they seek a better life in the United States.
The PRC opened a new Confucius Institute in Mendoza, Argentina. The institute, which will be held at the University of Congress, will be part of a joint exchange program with Nanjing Normal University.
The University of Chile received a delegation from the Chinese Academy of Sciences to discuss astronomy, environmental crisis, energy, and food security cooperation.
Los Tiempos has an article about the impact of Chifas (local Chinese restaurants) on Bolivian tastes and cuisine.
Analysis and Opinion
Writing in Foreign Affairs, Alexander Gabuev and Oliver Stuenkel discuss the competing visions for the future of BRICS (a group that includes both Brazil and China).
A new article in Dialogue Earth by Matt Sandy looks into whether Brazil is increasingly looking into joining China’s signature Belt and Road Intiative.
Evan Ellis wrote a piece for InfoBae on Chile’s growing defense relationship with China, arguing that “the decisions that the democratic and principled government of Boric in Chile will make in the coming months regarding its military relationship with the PRC will be important for the way the country defines itself.”
A commerce-focused Peruvian civil society organization, COMEX Peru, published a report on Chinese FDI and trade with the South American country, finding that exports to China make up more than a third of the country’s total sales.
Arturo McFields wrote about how “Mexico, the main U.S. trading partner, cannot keep positioning itself to become the Trojan horse of the Chinese empire” for the Hill.
That’s it for now, see you again in two weeks!
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More specifically, he says “Milei has come to see China as a potential foreign partner less interested in further empowering his own domestic enemies.” I interpreted this to mean a political relationship (because he contrasts it with economic motivations), though I readily admit he technically doesn’t use the term “political".
Of course, the U.S. government has expressed concerns about how China treats and engages with third countries — whether it’s IUU fishing or Huawei’s growing 5G network, Washington has plenty of problems with China abroad. Nevertheless, the Biden Administration has been clear that its concerns are over specific issues rather than every little (or big) engagement China has with other countries.
That said, the U.S. is looking to reduce its exposure to China in certain targeted areas of its economy.
This could change, and will be a key indicator for how serious Milei is taking his administration’s relationship with China.
To lay out all my cards on the table, I don’t think that the Biden Administration has been faultless. A full-blown FTA, greater financing for infrastructure projects, or at least a partial minerals-focused market access agreement have been missed opportunities for the U.S.-Argentine relationship. But even if Washington pursued these policies, Argentina still couldn’t have afforded to abandon its long-standing and deep economic relationship with the world’s second largest economy.