The China Signal - August 18
Bogotá Metro, U.S. warns Brazil against choosing Huawei for 5G, Xiaomi’s smart phone expansion, Chinese money launderers, XCMG's growing supply of construction machinery
G’day, and welcome to The China Signal! It’s been a while since the last edition, as I took some time away to devote my full attention to our twins. They’re growing so quickly (they’re 4 months old today!), and I know that before we know it this very special (and sometimes demanding) time will pass, and we’ll only have memories of it. So, thanks for your understanding that The China Signal took a back seat for a little while.
I’m writing to you from Bogotá, where we will be for another four weeks. Please do reach out if you’d like to meet up for a tinto while I’m here.
In this edition, construction of Bogota’s rail yard begins; the U.S. warns Brazil against using Huawei for its 5G network; Xiaomi’s global smartphone market share is driven by Latin America; the role of Chinese money launderers for Latin American drug traffickers; vaccine diplomacy; XCMG’s growing supply of construction machinery in the region; plus more. Read on.
Infrastructure
Colombia 🇨🇴
Colombia inaugurates construction of rail yard of Bogota Metro's first line - August 18, 2021
*Xinhua is a Chinese state sponsored media outlet.
Colombia on Tuesday marked the inauguration in its capital city of Bogota of construction of the rail yard of Bogota Metro's first subway line.
The subway line is being built by a consortium of Chinese companies, namely China Harbor Engineering Company Limited and Xi'an Metro Company Limited.
"Few projects are going to improve quality of life more," said Lopez, adding that the project is to cut travel time by half, improve mobility and productivity.
The 23.9-km-long first line is expected to be operational by 2028, according to Lopez.
5G
Brazil 🇧🇷
U.S. warned Brazil that Huawei would leave it 'high and dry' on 5G | Reuters - August 9, 2021
WASHINGTON, Aug 9 (Reuters) - U.S. national security adviser Jake Sullivan raised concerns about Huawei (HWT.UL) equipment in Brazil's 5G telecoms network during his visit to the country last week, a White House official said on Monday, but Brazil made no promises about whether it would use products from the Chinese company.
Brazil’s 5G auction has progressively been delayed, and is now expected to occur by October at the latest. I’ve previously discussed Brazil’s 5G dilemma with China in my USCC testimony (page 7.), TCS January 29, and January 22.
Smart Phones
Mexico 🇲🇽 + Colombia 🇨🇴 + Peru 🇵🇪
“Mexico and Colombia were key to beating Apple worldwide: President of Xiaomi AL”
~Paraphrased translation~
… Xiaomi became the second largest seller of smartphones in the world, taking the position of Apple's iPhone. Despite the growth that the company has had in markets such as Eastern Europe, its accelerated growth in sales is largely due to one region: Latin America, particularly countries such as Mexico, Colombia and Peru.
…Xiaomi se convirtió en la segunda empresa que más smartphones vende en el mundo, quitándole la posición al iPhone de Apple. Pese al crecimiento que la compañía ha tenido en mercados como Europa del Este, su crecimiento acelerado en ventas tiene un responsable: América Latina, particularmente países como México, Colombia y Perú.
Narco Trafficking
Broader Latin America 🏔🏝
A Chinese businessman laundered tens of millions of dollars in drug money through a Guatemalan casino, a US seafood export company, Miami banks, and Chinese bank accounts, in a case that reveals the wide reach of such money laundering networks.
According to prosecutors, bulk cash made from US cocaine sales was moved among different states to cover up its origins. It was later sent to Chinese bank accounts to purchase Chinese goods. Goods were also bought in the United States and sent to China. Merchants in Latin America looking to import these goods then used their local currency to pay Li and others for the items.
You can read further into the role of Chinese money launderers and Latin American drug cartels in TCS May 14.
Vaccine Diplomacy
Paraguay 🇵🇾
Paraguay's purchase of Sinopharm cancelled under Chinese pressure | Taiwan News | - August 2, 2021
Paraguay’s Ministry of Health announced on Saturday (July 31) that drug manufacturers in the United Arab Emirates cancelled a deal to supply the country with China’s Sinopharm vaccine.
Paraguay is Taiwan’s only South American ally, and it’s likely the purchase was cancelled due to diplomatic pressure from Beijing, according to a report from UDN. Paraguay negotiated the purchase of 1 million doses of the vaccine in April this year, with 250,000 doses arriving by the end of May, per Yomiuri Shimbun.
However, the manufacturers suddenly pulled out of the deal and refunded the US$5.6 million Paraguay had paid for the vaccines.
Paraguay’s Ministry of Foreign Affairs stated in March that breaking ties with Taiwan was becoming a precondition for the purchase of Sinopharm vaccines, wrote UDN.
Construction Machinery
Broader Latin America 🏔🏝
Chinese construction machinery manufacturer XCMG recently exported 972 units of construction machinery products to customers in South America via COSCO Shipping from Lianyungang, China. XCMG's batch delivery included excavators, loaders, graders, and others, were loaded in 935 containers, marking the single largest overseas shipment for the company in five years.
XCMG and COSCO Shipping have formed a powerful alliance since XCMG won the bid for a major project in South America in early 2021 but then faced the enormous challenge of delivering all products within a short period of time during the pandemic as the global supply chain and sea freight logistics capacity was significantly restricted. COSCO Shipping acted quickly to allocate resources and customized a solution plan for XCMG to solve the container transportation issues to ensure timely and orderly shipping.
By the end of the first half of 2021, XCMG's export volume increased by 70 percent year over year. Its products are now sold in 187 countries and regions worldwide, including 97 percent of Belt and Road Initiative countries, and XCMG now holds the highest export market share in 30 countries.
XCMG is the third largest construction equipment manufacturing firm in the world, according to the article.
Diplomacy
Broader Latin America 🏔🏝
LatAm calls for stronger economic ties with China - Global Times - July 27, 2021
*The Global Times is a Chinese state-backed media outlet.
The forum, called Win-Win Cooperation for Common Development of China-Latin America and the Caribbean, was organized by the Chinese People's Association for Friendship with Foreign Countries (CPAFFC).
Ambassadors from countries including Chile, Colombia and Guyana to China were present at the event to explain their advantages and areas where Chinese investment would be welcomed.
Videos featuring the culture, tourism sector and business aspects of Uruguay, Mexico, Ecuador, Peru, Argentina and the Bahamas were also presented.
Chinese firms - from carmakers such as Shenzhen-based BYD and Chongqing Chang'an Automobile and telecommunications technology giant Huawei, to China Railway Construction - also joined the forum in hopes of gaining more opportunities in the emerging region.
"The US still adheres to an outdated Cold War mentality and plays a zero-sum game … and it plunges the world into a never-ending, life-and-death struggle. Whether to step onto the path of win-win cooperation and common development, or follow the old path, people of insight in the world will make their correct choices," Lin Songtian, president of the CPAFFC said during the opening remarks at the forum on Tuesday.
Military
U.S. Southern Command - Broader Latin America and the Caribbean 🏔🏝
Adm. Faller: China exploiting corruption in Latin America - POLITICO - August 12, 2021
How should the United States respond to growing Chinese influence in Latin America —economic, diplomatic and military — without seeking confrontation?
We have what the PRC does not — a deep history of friendships and shared values throughout the region. Our strategic asymmetric advantage is our partnerships built to last, based on shared democratic values. This trust is the foundation, but we also must invest in tangible, mutually beneficial security cooperation programs. That means expanding our International Military Education and Training efforts and enhancing our global exercise program. We must meet our partners at the point of their needs, and work with all of them to get after common global threats like transnational criminal organizations, climate change and PRC influence, together.
When I talk to my regional counterparts, I don’t ask them to choose between the U.S. and China. But we do talk about values: free speech, the rule of law, respect for human rights, gender and racial equality. What I do say to my partners is “Wheredo you want to ultimately be with respect to those values, and how do you think China stacks up on that scale?” Our team at U.S. Southern Command works tirelessly to be the good partners, modeling ethics and professionalism, and our partner nations want to emulate that professionalism.
U.S. activities, including humanitarian assistance donations, noncommissioned officer development programs, human rights training and programs like Women, Peace and Security are all making a difference. A mother finally getting the much-needed medical treatment for her child. Thousands of families who received purified water with the help of a Joint Task Force-Bravo project. Building partner military capacity and combat readiness as part of our joint exercise program. All of these stories prove that our team is providing real results to our partner nations.
All of this goes a long way to build professionalism, resiliency, partnerships, and trust. That deters the PRCs strategic objectives in this region.
Country Overview
Argentina 🇦🇷
New directions in the deepening Chinese-Argentine engagement | Diálogo Americas - July 30, 2021
Evan Ellis provides an overview of the China-Argentina relationship with his typical thoroughness.