The China Signal - November 12
ICBC's trade promotion with Argentina, illegal timber trafficking, lithium
G’day, and welcome to The China Signal. This week, an interesting insight into the ICBC’s trade promotion programs in Argentina, the toll of Beijing’s Brazilian beef ban becomes apparent, more lithium developments in Argentina, and illegal timber trafficking in Peru. Read on.
Banking
Argentina 🇦🇷
This interview provides an interesting insight into the types of trade programs that the ICBC, one of China’s major commercial banks and one of the world’s largest banks, is offering to their Argentine clients. Not only does this serve commercial interests, but it acts as a form of bilateral diplomacy (ICBC is a state-owned enterprise) between the two countries.
~Paraphrased Translation~
In the search to create business opportunities for Argentine companies in the Chinese market, ICBC uses the “ICBC Business Matchmaker”, a tool that builds an agile bridge between Argentina and China. The platform aims to generate networks for both exporting and importing firms.
Journalist: What is the ICBC Business Matchmaker platform about?
Emma Fontanet: It is a service of ICBC, which aims to strengthen economic and trade cooperation between China and Argentina. It aims to be the bridge in this bilateral relationship, making it easier for companies from both countries to find partners. It is a tool that allows virtual business meetings to be carried out, where both Argentine exporters and importers can establish contacts with potential clients or suppliers as the case may be.
Q: What opportunities do you offer Argentine companies?
EF: Argentine companies can access potential parties in their products if they want to export, or with potential suppliers if they want to import. It allows them to have information and access to different sectors and to develop a commercial link via a virtual connection, and to start an exchange from which new business can emerge. All this while doing it from their offices, which they would otherwise have to travel far to do.
Q: What results have you obtained so far?
E.F .: The platform was launched in December last year, where we organized different export and import focused events. For the former, the platform was launched in early December 2020 in conjunction with the Ministry of Productive Development, the Argentine Investment Agency and the Argentine Foreign Ministry, within the framework of a business round for exporters from the meat and wine industry. Then, this year, within the framework of the inaugural Hainan Expo, we organized a business round for suppliers of gourmet food products. It was very interesting because the Chinese counterparts were supermarket chains who stock imported products, who are often difficult to gain access to. We also organized rounds with the dairy sector interested in exporting to China, which was achieved jointly with the Federal Investment Council, the Ministry of Productive Development, the Argentine Investment Agency and the Ministry of Foreign Relations. In addition, we did a round with the Chamber of Commerce of Import and Export of Chinese Tools and Machinery for the auto parts sector, for Argentine companies who were looking for suppliers.
Q: What other tools do you offer companies to reach the Chinese market?
E.F .: In the foreign trade campaign we not only have the ICBC Business Matchmaker platform, but we also have ICBC Mall China, a marketplace for products to be marketed directly to Chinese consumers. We also have the expertise of the ICBC Foundation, which promotes associative programs, training and courses oriented to foreign trade in general and the ICBC Foreign Trade award, which already has two very successful editions where the winning companies participate free of charge in a trade mission to China. There are also commercial immersion trips to China, which are slowed down by the pandemic, but which we will probably resume shortly. We take companies that are interested in exporting or importing providing them with training, information and specific advice on the Chinese market, adapted to different sectors and realities.
En la búsqueda de crear oportunidades comerciales para empresas argentinas en el mercado chino, ICBC potencia el ICBC Business Matchmaker, una herramienta que tiende un puente ágil entre Argentina y China. La plataforma apunta a generar redes tanto para firmas exportadoras como importadoras.
Periodista: ¿De qué se trata la plataforma ICBC Business Matchmaker?
Emma Fontanet: Es un servicio de ICBC, que tiene como objetivo fortalecer la cooperación económica y comercial entre China y Argentina. Ser el puente en esta relación bilateral, facilitando a las empresas de ambos países a encontrar socios globales. Es una herramienta que permite realizar rondas de negocios virtuales, en la cual tanto exportadores como importadores argentinos pueden establecer contactos con potenciales clientes o proveedores según sea el caso.
P: ¿Qué oportunidades ofrece a las empresas argentinas?
E.F.: Las empresas argentinas pueden acceder a potenciales interesados en sus productos en caso de que quieran exportar, o con potenciales proveedores en el caso de que quieran importar, les permite tener información y acceso a distintos sectores y desarrollar un vínculo comercial a partir de un contacto virtual, comenzar un intercambio a partir del cual puedan surgir nuevos negocios. Todo esto haciéndolo desde sus oficinas, lo que de otra manera tendrían que hacer viajando.
P: ¿Qué resultados obtuvieron hasta el momento?
E.F.: La plataforma se lanzó en diciembre del año pasado donde organizamos distintas actividades, tanto de exportación como de importación. En el caso de las primeras, el lanzamiento de la plataforma se realizó a principios de diciembre de 2020 de forma conjunta con el Ministerio de Desarrollo Productivo, la Agencia Argentina de Inversiones y la Cancillería Argentina, en el marco de una ronda de negocios para empresas exportadoras del rubro de carnes y vinos. Luego, este año, en el marco de la feria Expo Hainan (esta fue la primera edición, pero se hará todos los años), organizamos una ronda de negocios para proveedores de productos alimenticios gourmet con valor agregado. Fue muy interesante porque las contrapartes chinas eran compradores de free shops y cadenas de supermercados de productos importados, empresas difíciles de acceder en forma individual. También organizamos rondas con el sector lácteo, interesados en exportar a China, esto se logró de forma conjunta con el Consejo Federal de Inversiones, el Ministerio de Desarrollo Productivo, la Agencia Argentina de Inversiones y el Ministerio de Relaciones Exteriores. Además, hicimos una ronda con la Cámara de Comercio de Importación y Exportación de Herramientas y Maquinarias de China del sector de autopartes, para empresas argentinas que buscaban proveedores.
P: ¿Qué otras herramientas ofrecen a las empresas para llegar al mercado chino?
E.F.: En la campaña de comercio exterior no sólo tenemos la plataforma de ICBC Business Matchmaker, sino que también contamos con ICBC Mall China, un marketplace para que los productos sean comercializados directamente a los consumidores chinos. También contamos con el expertise de Fundación ICBC, que promueve los programas asociativos, la capacitación y los cursos orientados al comercio exterior en general y el premio ICBC Comercio Exterior, que ya cuenta con dos ediciones, muy exitosas donde las empresas ganadoras participan sin costo de una misión comercial a China. Asimismo, hay viajes de inmersión comercial a China, que se encuentran pausados por la pandemia, pero que probablemente retomemos en breve. Llevamos empresas que están interesadas en exportar o importar después de un proceso de acercamiento al mercado, brindándoles previamente capacitación, información y todo el asesoramiento específico sobre el mercado chino, adaptándonos a los distintos sectores y realidades.
Agriculture
Brazil 🇧🇷
China’s ban on Brazilian beef following two cases of mad cow disease in September are hurting Brazil’s beef industry.
Exports of Brazilian beef totalled 108,600 tons and raised USD 542 million in revenue last month. That represents a drop of 43 percent in volume and 31 percent in revenue compared to the same month last year, according to Brazilian slaughterhouse association Abrafigo, with data from Brazil’s Foreign Trade Secretariat.
Note that the majority of Brazilian beef that was exported to China did so via Hong Kong, a “grey channel” that I mentioned in TCS October 28.
According to the association, in October there was a “residual” export of 27,700 tons to China, with the majority — 19,466 tons — entering via Hong Kong.
However, some Brazilian beef is finding new buyers elsewhere, particularly in the United States, with Bloomberg reporting a 183% increase in exports to the U.S. from January to October, with a heavier proportion of this occurring in October.
Critical Minerals
Argentina 🇦🇷
Eramet said on Monday it was relaunching a lithium production project in Argentina through a partnership with Chinese steel group Tsingshan as it seeks to expand in minerals needed for electric vehicles.
Eramet owns a large lithium deposit in Argentina but had suspended its development in April 2020 at the start of the covid-19 pandemic.
The agreement with Tsingshan covers the construction of a lithium processing plant from the first quarter of 2022, with commissioning scheduled for early 2024.
The French group will control the project with a 50.1% interest and retain operational management responsibility while Tsingshan will finance around $375 million of an expected $400 million investment and acquire a 49.9% interest, Eramet said.
An Eramet executive told Reuters last month that Europe was not investing enough in the battery supply chain and that the group might have to turn to non-European partners.
Eramet and Tsingshan are already partners in Indonesia in a nickel mining and processing site.
The partners will take lithium supply corresponding to their share in the project and Eramet is talks about potential supply agreements with European car manufacturers and battery makers, Bories said.
Illegal Timber Trafficking
Peru 🇵🇪
Peru Governor Accused in China Wood Trafficking Network - InSight Crime - November 10, 2021
A Peruvian governor is accused of playing a lead role in a timber trafficking network that involved Chinese logging businesses – in a case that provides further evidence of the growing involvement of Chinese actors in Peru's illicit timber market.
Luis Hidalgo Okimura, governor of the Madre de Dios department, is under investigation for allegedly taking bribes to provide logging concessions and transport permits to timber firms, Dionisio Quicaño, a prosecutor in the anti-corruption unit of the Attorney General's Office, told Peruvian media outlet Punto Final. Among the beneficiaries of the concessions are five companies belonging to Chinese businessmen Xiadong Ji Wu, who is also under investigation after prosecutors raided one of his properties and discovered planks made from a protected tree species, according to Punto Final.
A logging business connected to Ji Wu benefited from a 42,000-hectare concession being moved to a protected area of Madre de Dios in the Amazon region, according to the report.
China has become a significant driver of the illegal timber trade in Peru. According to data collected by the Centre for International Environmental Law, more than 70 percent of timber exported from Peru to China via the port of Callao port was on the "red list." This means that the exporting company either faces legal proceedings or has been sanctioned for crimes related to illicit timber.
China is currently the world's largest importer of timber, and the country has no restrictions on the import of illicit wood.