Think Twice Before Acting
Cubans in Beijing for the PRC's military parade, Mexico raises tariffs, and Paraguayan corruption concerns over Taiwan. Plus: The GGI and LAC
Welcome back to Chaufa, a China-Western Hemisphere Newsletter by CPSI.
Today’s edition covers September 1 to September 15
The Top 5 Stories:
As part of the celebrations marking the 80th anniversary of Japan’s defeat in World War II, Cuban President Miguel Diaz-Canel met with President Xi and Secretary of the CCP’s Central Commission for Discipline Inspection Li Xi. In the latter meeting, the two sides reportedly “drew a new blueprint for bilateral relations.” At the end of the visit, Diaz-Canel attended a Cuba-China Biotechnology Working Group meeting and announced that 30 cooperation agreements had been signed over the course of the trip. Later, the Cuban trade minister commented that the two sides are renegotiating the island’s government, financial, and business debts in China, as well as Cuba’s accession into China’s Interbank Cross-Border Payment System.
Also at the ceremony were the Venezuelans and the Brazilians. The president of Venezuela’s National Assembly, Jorge Rodriguez, represented the Bolivarian Republic, while Celso Amorim, a special advisor to President Lula, attended on behalf of Brazil. Amorim later met with Wang Yi and suggested that their two countries should explore defense cooperation opportunities. (FMPRC)
A delegation led by 20 Nicaraguan municipal secretaries from the ruling FSLN party traveled to China to visit the school of the Provincial Committee of the Communist Party and meet with the CCP’s International Department. At the same time, the co-director of the National Police, Francisco Díaz, attended a PRC security forum and met with the Chinese Minister of Public Security.
Since establishing formal diplomatic relations in 2021, the Ortega regime has swiftly sought to leverage its relationship with Beijing to support its authoritarian political project. The CCP engages with both authoritarian and democratic regimes on security and political issues; the engagement with Nicaragua’s ruling party has been particularly intense.
Mexican officials announced they would raise tariffs on over 1,400 products from non-FTA partners, a new set of duties that would fall largely on PRC exports. Notably, these new tariffs include a 50% tax on Chinese autos. China’s commerce ministry cautioned against the trade action, and Mexican and Chinese officials are expected to begin talks over the trade measures in the coming weeks.
This is not the first time that Mexico raised tariffs on its non-FTA trading partners; back in 2023, then-President Lopez Obrador imposed an average 25% tariff on more than 500 goods. That said, next year’s USMCA review will likely create new pressures on Mexico to reduce Chinese investment, trade, and transshipment in the North American country, so this effort may be an attempt to preempt those concerns.
A Paraguayan radio station released leaked audio that purported to show that Paraguayan senators were receiving kickbacks from Taiwanese economic development funds that were supposed to be spent on new elevators. The president of Paraguay’s congress denied the rumors, arguing that Taiwan was directly paying the contractors and that there was no opportunity for graft.
Most of Taiwan’s foreign assistance to its diplomatic allies goes to real projects that help locals with issues like food security, education, and healthcare. That said, corruption and payoffs are not unheard of when it comes to Taiwan’s foreign policy. For example, former Guatemalan President Alfonso Portillo received $2.5 million in bribes to maintain diplomatic relations with Taipei. Relatedly, the Economist previously reported that Paraguay’s ruling Colorado Party often treats Taiwanese foreign assistance as a “stash of ‘petty cash.’” While this might be a big misunderstanding, it is also not impossible that some Taiwanese money was not being used for its intended aid purposes.
The Chinese General Administration of Customs (GACC) approved Brazilian sorghum imports, clearing the way for a new alternative U.S. sorghum. The first shipments are expected to ship as early as this year. The approvals follow through on a commitment President Xi made during his visit to Brasilia in 2024.
China and the United States used to be highly interdependent on sorghum exports: back in 2023, 53% of Chinese sorghum imports were from the United States, while 85% of U.S. sorghum (totaling $999 million) went to China. Experts expect that Brazil has strong potential for long-term sorghum cultivation, which could heavily displace U.S. sorghum trade in the future.
Core Brief
The Global Governance Initiative (GGI) and Latin America
The SCO summit of Asian leaders and a plethora of goose-stepping young Chinese men and women grabbed the Chinese headlines from early September. But lying in the background, China’s foreign ministry (MOFA) announced a new major policy proposal that anyone following Chinese foreign policy will soon have to memorize: the Global Governance Initiative (GGI).
The GGI is premised on maintaining and enhancing the UN-led world order. Explicitly criticizing (U.S.) unilateral sanctions and slow progress on multilateral issues, the GGI is made up of five core (but admittedly bland) concepts: sovereign equality, international rule of law, multilateralism, people-centered approach, and “real results.” Priority areas for multilateral engagement are “international financial architecture [reform], AI, cyberspace, climate change, trade, and outer space,” as well as boosting “the representation of the Global South” in multilateral organizations.
Though the GGI’s older siblings, namely the GDI, GSI, and GCI, have not amounted to much in the way of tangible deliverables, at least three traditional China-friendly regimes quickly signed on to MOFA’s new plan: Cuba, Nicaragua, and Venezuela. These three are among the most China-aligned governments, so this provides little indication of how far the GGI’s adoption will actually go in the region.
That said, three immediate implications from the initiative stand out to me:
Boosting representation in international institutions can take many forms, but one of the most obvious would be expanding the UN Security Council’s (UNSC) permanent members. Brazil has previously sought a permanent seat at the UN, but any configuration of expanded UNSC membership would likely mean a more active voice for one or many LAC countries in the body.
China’s foreign ministry previously addressed international financial architecture reform in this spring’s China-CELAC forum declaration, but the GGI further cements the importance of addressing the issue in future Chinese foreign policy. Considering that nearly every Latin American and Caribbean country has relied on the World Bank and IMF, any reform of the international financial architecture would immediately affect the region’s interests.
Supporting “regional and subregional multilateral institutions” suggests that China will continue, if not enhance, its relationship and support for regional multilateral bodies like CELAC, CARICOM, and even the OAS.
None of the GDI’s complaints or proposals are all that new to Chinese foreign policy, but it does succinctly lay out China’s vision for the multilateral world order. In the coming months and years, China will probably encourage other LAC countries to support the initiative, as well as the reforms themselves.
The Roundup
Politics and diplomacy
At a ceremony attended by various Venezuelan officials and the Chinese ambassador, President Maduro inaugurated a monument to the 80th anniversary of the Chinese victory against the Japanese in World War II on the outskirts of Caracas.
Canadian Parliamentary Secretary and top aide to Prime Minister Carney, Kody Blois, met with Chinese Vice Foreign Minister Ma Zhaoxu, exchanging views on “bilateral relations”. (FMPRC)
Chinese naval hospital ship Silk Road Ark set sail on September 5 for its maiden overseas deployment, with the ship expecting to stop in Mexico, Jamaica, Barbados, Brazil, Peru, and Chile for a humanitarian medical mission. (PRC MND)
The U.S. State Department announced a new policy to restrict visas to Central American citizens who “act intentionally on behalf of the Chinese Communist Party” to “support or carry out activities that undermine the rule of law in Central America.”
Investment, finance, and infrastructure
China’s embassy and the Dominican Republic’s foreign ministry signed an economic cooperation agreement for $40 million in non-refundable grants for emergency management and natural disaster response projects and 450 scholarships for DR government officials.
Mexico agreed to purchase 15 electric trains for the Mexico-Pachuca route from CRRC Zhuzhou Locomotive for about $318 million.
Zijin Mining began operations on its $600 million lithium project in Catamarca, Argentina. The investment will start off producing 20,000 tons of lithium carbonate equivalent (LCE), but it expects to eventually ramp up to 50,000 LCE.
The Chinese and Honduran governments showcased the economic benefits of their cooperation by inaugurating a new agriculture processing plant in Comayagua that had been built with a $3.1 million grant, announcing a new expert mission to evaluate the Patuca II-A Hydroelectric Project, from the Chinese Agency for International Cooperation for Development, and agreeing to a new $3 million sale of tobacco to PRC buyers.
A new floating oil production facility that will eventually produce 60,000 barrels of oil per day in western Venezuela arrived in the country at the beginning of September. The facility is part of a broader investment by China Concord Resources Corporation.
A new report by the Brazil-China Business Council found that Chinese investment more than doubled in 2024 compared to the year before. Total investment by Chinese companies totaled more than $4 billion across 39 projects.
Trade and technology
China’s Ministry of Commerce lengthened its anti-dumping probe into Canadian canola oil by six months, giving negotiators additional time to resolve the trade dispute.
A business delegation led by Nicaraguan presidential advisor (and son of the Ortegas) Laureano Ortega met with PRC companies and signed an MOU on information systems technology during a visit to China.
Due to an outbreak of avian flu in Argentina, China’s customs administration banned imports of poultry and related products on September 3.
A new cargo shipping route between Zhangjiagang Port in east China's Suzhou City to Chancay Port in Peru opened on September 12, further linking the two countries. (Xinhua) The new route was launched as Peru’s finance minister expressed confidence that his government could maintain strong trading relationships with both the United States and the PRC.
A new Buenos Aires-Shanghai flight route by China Eastern via Auckland will officially launch on December 4. The new air route to Argentina will be among the longest in the world.
Taiwan
The ROC Ministry of Foreign Affairs allocated $174 million to its Latin American and Caribbean operations for the coming year to both support existing relations with its diplomatic partners and to build new, likely unofficial, ties across the region.
The Taiwanese embassy in St. Vincent and the Grenadines donated a host of medical supplies like wheelchairs and walkers, as well as an ambulance, to the country’s Ministry of Health.
Taiwan’s Foreign Trade Development Council and the foreign ministry sponsored a business conference in Lima. Twenty-eight Taiwanese manufacturers from the electronics, technology, agriculture, finance, manufacturing, machinery, hardware, and food industries met with Peruvian companies.
Paraguay’s air force received four Bell UH-1H Iroquois helicopters from Taiwan, and the country’s armed forces expect to get additional armored vehicles in the near future.
Society and culture
The eighth China-Latin America Civilizations Dialogue Forum was held in Wuxi on September 12. The forum brought together more than 150 participants from 20 countries to discuss cultural issues, sustainability, and trade.
The Honduran Institute of Anthropology and History (IHAH) and the Institute of Archaeology of the Chinese Academy of Social Sciences (IACASS) signed an agreement on “research, conservation and promotion” of Honduran cultural heritage.
The University of Chile’s agronomy faculty signed an agreement with Tianjin Nongkenjing to build a demonstration farm in Maipú that could host experimental cultivation areas.
Chinese oil company CNOOC, which has notable oil investments in Guyana, sponsored 7 Guyanese doctors to attend a three-month training program in Nanjing.
The Barbados Ministry of Health and Wellness signed an MOU with the Chinese embassy to allow for the arrival of the eighth Chinese Medical Team at the Queen Elizabeth Hospital.
The PRC embassy in Antigua and Barbuda will donate 1,800 solar street lights to the Caribbean nation, as well as sponsor a new training series on modern irrigation techniques.
Analysis and Opinion
Howard Shen and Frank Alley argue in World Politics Review that the upcoming elections in Honduras are a referendum on the country’s relationship with China (and possibly a future relationship with Taiwan). Two leading candidates have suggested they would restore ties with Taipei at the expense of Beijing.
A new article in Foreign Affairs by Hussein Kalout argues that under the Trump Administration, “U.S. policy [in Brazil] is playing into China’s hands.”
Eric Olander of the China Global South Project spoke with Alonso Illueca on his podcast to discuss small-state diplomacy with Latin American and Caribbean countries like Dominica. Illueca later wrote about how China’s lithium investment bid in Bolivia has gone awry now that two center-right candidates who do not support Chinese investment in the country made it past the first round in the country’s presidential elections.
Writing in Responsible Statecraft, Jorge Heine argues that the United States has little to offer countries like Ecuador in competition with China.
A new piece in The Diplomat by Evan Ellis explores Peru’s “active neutrality” between the United States and China, finding that Lima’s “ability to successfully balance between the United States and China will depend on putting its own true interests first.”
That’s it for now, see you again in two weeks!
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