The China Signal - August 12
Uruguay/China defense agreement, Brazilian agricultural exports, Taiwan
G’day, and welcome to The China Signal. This week, Uruguay’s parliament passes a defense agreement with Beijing, Beijing moves to increase agricultural imports from Brazil amidst geopolitical uncertainty, Argentina’s Ambassador to China condemns Nancy Pelosi’s visit to Taiwan as a “provocation”, plus much more. Read on.
Military 🎖️
Uruguay 🇺🇾
Uruguay's Parliament passes defense agreement with China | MercoPress | August 10, 2022
[On Tuesday 9 August], Uruguay's Congress approved the implementation of joint defense efforts with China agreed upon in 2019, when the two countries pledged to increase cooperation between their respective Ministries of Defense.
The document also provides for “the exchange and cooperation in the areas of research and acquisition of defense goods and services and logistical support in the area of international peacekeeping operations” and “the promotion of combined exercises and training, cooperation in matters related to science, technology and military equipment, humanitarian assistance in case of disasters and cooperation in anti-terrorist matters, among others.” (RP)
We will keep a close eye out for further details of this agreement, particularly given the security pact between China and the Solomon Islands signed in April. A leaked copy of the draft agreement referenced Beijing’s right to “make ship visits to, carry out logistical replacement in, and have stopover and transition in Solomon Islands,” stoking fears in Washington and Canberra that it could be a pretext for Beijing to establish a naval base on the island. (MH)
Agriculture 🌽 🌱
Brazil 🇧🇷
China has opened its market to soybean meal produced in Brazil, adding shipments would begin when certain bureaucratic hurdles are removed. Authorization for exports could be granted within the next two months.
Soymeal is an important protein source used to feed farm animals.
China is already the biggest export destination for Brazilian agricultural products, including soybeans, chicken and pork. (RP)
China to Speed Brazil Corn Imports Amid Ukraine War, US Tensions - Bloomberg - August 11, 2022
Brazil’s agriculture minister Marcos Montes is also in discussions with his Chinese counterparts to temporarily waive sanitary requirements and expedite Brazilian corn exports to China, in an effort to replace disrupted Ukrainian corn exports, and diversify from US corn amidst ongoing US-China tensions. Prior to Russia’s invasion of Ukraine, 70% of China’s corn was imported from Ukraine, and 30% from the US. Exports could commence before year-end, earlier than initially planned. (RP, MH)
Uruguay 🇺🇾
Uruguay avanza con un acuerdo para exportar sorgo a China | Infobae | August 3, 2022
~Article above is in Spanish~
China and Uruguay made progress on a protocol of phytosanitary requirements for the export of sorghum to China, the world’s main importer, Uruguay’s Foreign Ministry, and Ministry of Livestock, Agriculture and Fisheries reported on Wednesday 3 August.
The announcement comes after the two countries announced they have begun formal negotiations on an FTA agreement (see TCS July 26). (RP)
Oil 🛢️
Brazil 🇧🇷
Brazil’s oil exports to China have been hurt by China’s increased imports of discounted Russian oil, as Russian exporters, cornered by US and EU sanctions, offloaded oil normally bound for these markets. In detail: (RP)
According to data from Brazil’s Foreign Trade Secretariat (SECEX), in the first half of the year, Brazil exported 36% less oil to China than in the same period last year (about 12.5 million tons of oil instead of 19.56 million tons in 2021).
However, high global oil prices diminished the financial impact on Brazilian exporters:
…exports went from US$ 8.06 billion last year to US$ 7.9 billion in 2022 (-2%).
Transportation 🚌
Chile 🇨🇱
FOTON Secures the Biggest Overseas Order of Electric City Buses from Chile - August 11, 2022
FOTON officially signed a deal of 1,022 units electric city buses with a total value of 1.6 billion RMB send to Chile, serving the public transportation system of Santiago. The deal marks the biggest order of domestically manufactured electric city buses from the overseas market, catapulting FOTON into the first place in Chilean new energy vehicle market.
Currently, over 300 units FOTON electric buses (accounting nearly 40%) are working in Chile. After this arrival, FOTON electric bus fleet will become the biggest one in Latin America.
FOTON obtained Chilean's first order of 215 units new energy buses in November, 2019, ushering a brand new era of public transport in Chile. In 2021, FOTON secured an order of 138 units and became one of the leading players in the local electric bus market.
Critical Minerals ⛏
Argentina 🇦🇷
Argentina gets $290 million to develop lithium assets | Mining.com | July 28, 2022
Miners Ultra Argentina SRL and China’s Zangge Mining have committed $290 million in investments to explore and develop lithium deposits in northwest Argentina, and to build a plant, the Argentine Minister of industry Daniel Scioli announced.
Zangge Mining will initially invest $40 million in the exploration and development of the Laguna Verde lithium project in the province of Catamarca. A further investment of $250 million is planned at a later stage for the construction of a lithium carbonate processing plant.
On June 20 (see TCS July 4), Canada’s Ultra Lithium and Zangge signed a definitive association agreement for the Laguna Verde project. (RP)
Diplomacy 🕊️
Paraguay 🇵🇾 + Taiwan 🇹🇼
~Article above is in Spanish~
In a speech acknowledging an official Taiwanese donation of US$4 million to female Paraguayan small business entrepreneurs, Paraguay’s Minister of Industry and Commerce, Luis Castiglioni, recalled how China “undermined” Paraguay’s response in the middle of the COVID-19 pandemic, by prohibiting the purchase of Chinese antiviral vaccines from Taiwan at the height of the outbreak in 2021.
Castiglioni noted how Paraguay had managed to purchase from Taiwan, "a friendly and brotherly country", a percentage of vaccines produced by China. However, he indicated that "when China found out" that the vaccines "were for Paraguay, it demanded that the Taiwanese government immediately break the agreement and not deliver a single dose to Paraguay". (RP)
Paraguay expresa apoyo a Taiwán ante "amenazas" | Swissinfo.ch | August 3, 2022
~Article above is in Spanish~
On August 3, Paraguayan President Mario Abdo Benítez expressed via Twitter his "support and solidarity" to Taiwan in the face of the "threats" it has faced after the visit of US Speaker Nancy Pelosi. Benitez added that "the democratic values of the Taiwanese people are an example for their region and the world, and deserve to be vindicated by the international community".
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Argentina’s Ambassador to China Sabino Vaca Narvaja described Pelosi’s visit as “a provocation” and “a problem for the international community”, thus claiming Beijing has the right to defend its “territorial integrity”. For a background on Vaca Narvaja and his close political affiliation to Argentina’s Vice President Cristina Fernández de Kirchner amidst a political turf war between her and President Alberto Fernández, see TCS May 1, and TCS May 13. (RP)