The China Signal - November 19
China-LAC Business Summit, arms sales to Venezuela, human rights, soy beans, Beijing's mis/disinformation + propaganda
G’day, and welcome to The China Signal. There is a lot to discuss this week, including the China-LAC Business Summit in Chongqing; a new report on China (and Russia’s) arms sales to Venezuela; Argentina’s ambassador to China praises Beijing’s treatment of Uygur minorities in Xinjiang; China’s growing soy bean trade with Brazil - at the United States’ expense; more on Ecuador’s planned debt swap agreement for marine conservation and IUU fishing regulation; a new report on China’s role in misinformation, disinformation, and propaganda in the region; plus much more. Read on.
Diplomacy
Broader Latin America 🏔🏝
Via Xinhua, a Chinese state-sponsored media outlet.
China-LAC Business Summit kicks off in Chongqing - China.org.cn - November 17, 2021
The 14th China-Latin America and the Caribbean (LAC) Business Summit kicked off in southwest China's Chongqing Municipality on Tuesday to further boost trade ties and corporate investment.
According to China Daily, the event is a “sub-summit” of the China-CELAC (Community of Latin American and Caribbean States) Forum, first held in 2007. It is backed by the China Council for the Promotion of International Trade, the Chongqing Municipal Government and the People’s Bank of China. I’m told the Inter-American Development Bank was also involved in the summit’s early years.
China is the second-largest trading partner of the LAC region, and the annual bilateral trade volume has exceeded 300 billion U.S. dollars for three consecutive years. The LAC region is also the second-largest destination for China's outbound investment, with more than 2,700 Chinese-funded enterprises operating in Latin America and the Caribbean.
The initiative included jointly tackling the challenges of COVID-19, firmly embracing openness, continuing to promote infrastructure connectivity, effectively promoting financial integration, vigorously engaging in cooperation on innovation, and fully supporting small and medium-sized enterprises.
China Council for the Promotion of International Trade (CCPIT) signed memorandums of understanding on cooperation with its counterparts in Ecuador, Argentina, and Mexico respectively. China-LAC enterprises signed eight cooperation agreements worth nearly 1.1 billion U.S. dollars, covering such fields as animal husbandry, minerals, automobiles, and medical devices. In addition, the China-LAC Think Tank Cooperation Webinar, a sub-forum of China-LAC Business Summit, released two reports, namely the Research Report on China-LAC Five-Area Cooperation and Exchanges in the Framework of the Belt and Road, and the Report on China-LAC Economic and Trade Cooperation Development (2021)”.
Many other activities were also held, including China-LAC Business Council Annual Meeting and China-LAC Business Matchmaking (online), so as to further promote China-LAC development strategy matchmaking, expedite economic and trade cooperation and share cooperation results.
Ambassadors, agents, and representatives of 16 LAC countries in China also attended the summit.
The summit attracted enterprise representatives from key China-LAC cooperation fields such as infrastructure, finance, energy, transportation, and technology. Relevant enterprises included Brazil’s Vale and Mexico’s central bank Banco de México with worldwide reputations, as well as China’s renowned centrally administered State-owned enterprises and private enterprises, involving China Communications Construction Company Limited, ZTE Corporation, China Three Gorges International Limited, and China Export & Credit Insurance Corporation.
Details on the eight MOUs are still scarce, however it seems that the bulk of the reported USD 1.1 billion consists of 2 to 3 agreements. The largest is a $700 million lithium agreement between Tibet Summit Resources Co. and the provincial government of Salta in Argentina. The other two, according to Chinese state broadcaster CCTV, are agreements to import beef from Uruguayan and Brazilian companies, at a combined value of $200 million.
Oddly, state backed media outlet The Global Times reported negatively on the lithium agreement today:
China's Tibet Summit Resources Co, which inked a contract for battery-grade lithium carbonate with the provincial government of Salta, Argentina, said on Thursday that the project is facing great uncertainties and the company has not kicked off production yet.
According to an announcement by Tibet Summit Resources Co, there is no clear plan to raise funds for the project so far, online outlet stcn.com reported.
The project has not entered production stage and whether it can raise the necessary funds to start production or earn profits is uncertain.
The Ecuadorian port city of Guayaquil will host the forum in 2022.
Honduras 🇭🇳
Honduran president due in Taiwan in surprise state visit - State Visits - AP - November 12, 2021
The outgoing Honduran President Juan Orlando Hernández was due to start a three-day surprise visit to Taiwan on Friday as the self-ruled island, which is also claimed by China , worries that the next president of the Central America n nation may break off relations and switch to diplomatic ties with Beijing .
Hernández’s trip comes just weeks ahead of the presidential election in Honduras. He is due to leave office in January…
Taiwan, meanwhile, is concerned about the election as one of the leading candidates has openly said she is in favor of establishing ties with China, which means Honduras will cease recognizing Taiwan as a country. Xiomara Castro, the presidential candidate, said in a June 28 post on her Facebook page: “I believe in multipolarity and because of that I propose opening international relations with continental China, which would help the country incorporate into the market with the market of the world’s greatest growth.”
Local Taiwanese media carried the following statement from Hernández following his meeting with Taiwan’s President Tsai Ing-wen in Taipei:
“At this very moment amid tensions in the region, Honduras is here to demonstrate that we are real friends, and only real friendship can be seen at difficult times,” Hernandez said at a meeting with President Tsai Ing-wen (蔡英文) at the Presidential Office on the second day of his three-day visit to Taiwan.
“We hope to deepen such friendship and diplomatic ties either within or after my presidency,” he added.
Military / Arms
Venezuela 🇻🇪
“Russia and China continue as arms suppliers to the Maduro regime”
~Paraphrased translation~
The report shows that only China and Russia remained arms suppliers to Venezuela over the past five years, and that so far in 2021, only “one undetermined acquisition of a drone has been registered, acquired from Russia”.
El informe en cuestión demuestra que solo China y Rusia se mantuvieron los últimos 5 años como proveedores de armas a Venezuela, y que en lo que va de 2021, solo ha sido registrada “una adquisición no determinada, de vehículo(s) aéreo(s) remotamente tripulado (dron) de reconocimiento, adquiridos en Rusia”.
Unlike previous periods, the contracts signed for the supply of weapons, aircraft, ships and other equipment with companies from China, Germany, Holland, Russia, among other countries, were not finalized or the deliveries were partial, due to to non-compliance with payments, as reported by some of the providers cited in this report.
A diferencia de lo que ocurría en periodos anteriores, los contratos firmados para el suministro de armamento, aviones, buques y otros equipos con empresas de China, Alemania, Holanda, Rusia, entre otros países, no se concretaron o las entregas fueron parciales, debido al incumplimiento en los pagos, según informaron algunos de esos proveedores citados por el informe.
You can view the full report here, in Spanish only.
Argentina 🇦🇷
The latest from Evan Ellis of the U.S. Army War College.
China’s current interest in building and possibly operating an Antarctic “logistics base” in Ushuaia, at the tip of Argentina, raises concerns because it is strongly consistent with the logic and pattern of the PLA’s advance in expanding its global strategic reach. The $300 million, multi-phase project could, in principle, be financed by China, although as noted by then head of US Southern Command ADML Craig Faller when visiting the area, the question was not only who finances it, but who operates it.
Construction and operation of a polar logistics base in Ushuaia fits the PLA Navy pattern for expanding its global presence in multiple ways. First, such a base would support PRC access in an area that the PRC wants to be in. As with China’s base in Djibouti, establishing an ostensibly commercial facility at the southern tip of Argentina would give the PLA both plausible deniability and some distance from the United States, in an area where China already has a significant commercial and strategic presence, as noted previously.
For the time being, Argentina’s government has attempted to provide reassurances that it is not moving forward with a Chinese controlled base in Ushuaia, yet the strategic implications of such a presence should not be taken lightly. From a strategic standpoint, the prospect of PRC control of the transit from the Atlantic to the Pacific through the Straights of Magellan or the Drake Passage in time of conflict would be significant, particularly if the PRC were able to shut down the Panama Canal in the context of a war such as that potentially unleashed by a PRC attempt to forcibly incorporate Taiwan into China.
From a British standpoint, such a PRC presence would add to the threat posed by Argentina to Falkland/Malvinas islands, already heightened by Argentina’s programmed acquisition of Chinese FC-1 combat aircraft.
The article is also available in Spanish on the same page.
Clean Energy
Chile 🇨🇱
I’m including this more to note the highly ambitious nature of the idea, which as the article notes, would require an enormous increase in Chile’s solar capacity, alongside a substantial financial outlay and international agreements.
The Chilean government is planning to build a submarine cable to export photovoltaic energy to China, according to Chilean solar energy association – ACESOL – which cited a statement made by Chilean president, Sebastián Piñera, during the National Meeting of Entrepreneurs (ENADE).
Called Antípodas, the project is aimed at taking advantage of the huge solar potential of the Atacama Desert, which is the world's region with the highest solar radiation.
Piñera explained that, through the cable, the electricity produced by between 200 and 600 GW of photovoltaic generation capacity may transmit power to Asian countries when it is daytime in Chile and nighttime across the Pacific, or when it is winter in Asia and summer in the southern hemisphere.
The president clarified that the idea is particularly ambitious and that just to carry it out requires studies and strategic alliances with large Asian economies. The cable should be about 15,000km long and building a 1,300km cable would cost $2 billion. In addition, it would be necessary to invest in new solar plants since Chile has 3,106 MW of photovoltaic capacity installed, according to IRENA.
Human Rights
Argentina 🇦🇷
Remember, the Global Times is a Chinese state sponsored media outlet.
More foreign diplomats, experts stand up for Xinjiang - Global Times - November 15, 2021
Being in the crosshairs of Western anti-China forces, Northwest China's Xinjiang Uygur Autonomous Region held a development forum on Monday, with government officials, business leaders and academic researchers coming together, discussing the region's development and its active participation in the Belt and Road Initiative (BRI).
Government officials at the 2021 China Xinjiang Development Forum, held in Beijing, refuted insidious accusations from anti-China forces in the West, and called for better integration with the BRI, winning greater recognition and support from foreign diplomats and experts who are standing up for justice.
Commenting on Western media accusations of human rights abuses and forced labor in Xinjiang, Gustavo Sabino Vaca Narvaja, Ambassador of Argentina to China, told the Global Times at the forum that many of the media outlets produced their reports under the influence of some countries.
"I have been to Xinjiang. What I saw there is prosperous development and different ethnic minority groups living in harmony. Seeing is believing," he said.
Trade and Agriculture
Brazil 🇧🇷
China Buying More Brazil Soy in Sign of Shifting Trade Flows - Bloomberg - November 16, 2021
The Asian nation needs soybeans to feed its expanding hog herds, and November is a prime time for the U.S. to sell its crops, having just finished the harvest. Supplies are at their peak and American prices should be the most attractive in the world.
Yet this year, Brazil is even cheaper and cutting into the U.S.’s key sales window. Last week China bought at least 30 soybean cargoes from the U.S. and Brazil, with more than half coming from the South American nation, according to people familiar with the matter. The move shows that Brazil, already the No. 1 shipper, is becoming ever more competitive on world markets.
While China’s purchase of around 30 cargoes is substantial, it’s not atypical for the season, according to traders and analysts.
[Brazil’s] crops are winning on the world marketplace because everything from land to labor to fuel is cheaper, and it’s benefiting from weak local currency. Brazil shipments totalled 1.5 million tons in the first 12 days of November, more than what was shipped the whole month last year.
Environmental Conservation/Illegal, Unreported and Unregulated Fishing
Ecuador 🇪🇨
As I speculated in TCS November 5, the Ecuadorian Government is in discussions with the US International Development Finance corporation for a debt swap arrangement, where the proceeds would be used for marine conservation around the Galapagos. This will include further restrictions on IUU fishing in the area.
The exact details of the fundraising have yet to be worked out, but would likely involve a buy-back by Ecuador of a portion of its more expensive debt and the issuance of a less expensive “blue bond” backed by the International Development Finance Corporation. from the US, Manrique said. The operation would reduce the government’s debt burden by around US $ 300 million on the condition that Ecuador increases spending to help the Galapagos, according to [Ecuador’s Environment Minister Gustavo] Manrique.
The agreement, part of the Administration’s vision to take advantage of capital markets to finance the conservation and greening of the economy of the former OPEC member, will allow the Government to double or triple its annual budget of US $ 6 million for the Galapagos National Park , which manages the protected areas of the famous archipelago home to giant tortoises, green sea turtles and marine iguanas. It will severely limit commercial fishing in 60,000 square kilometers of the Pacific Ocean.
Ecuador’s plan is similar to a Belize deal, where the government, its creditors and the Nature Conservancy have completed one of the largest debt restructurings in history aimed at helping the environment, also with US backing.
Critical Minerals
Argentina 🇦🇷
In TCS November 5, I noted Canadian firm Lithium America’s Corp’s bid for Millenial Corp, who is focused on lithium development in Argentina. The bid surpassed China's Contemporary Amperex Technology Co Ltd (CATL). Lithium America’s Corp’s offer $400 million in cash and stock has now been accepted by Millenial.
Misinformation, Disinformation, and Propaganda
Broader Latin America 🏔🏝
Each of our project partners has conducted rigorous quantitative and qualitative research, covering Argentina, Chile, Peru, Colombia, Mexico, and Venezuela.
Our cross-regional research project revealed the following high-level findings:
China, Russia, and other undemocratic actors are active in promoting disinformation and propaganda in Latin America through their state-sponsored media channels, though the degree and scope of these efforts vary from country-to-country. The most active of these are Russia Today (RT), Telesur, Sputnik Mundo, and Xinhua Español; Twitter and Facebook are actively used in the social media sphere.
Chinese and Russian misinformation, disinformation, and propaganda are disproportionately concentrated on thematic targets that lie at the intersection of democratic fault lines, inflaming local political rifts, promoting like-minded and often non-democratic local forces, and portraying China and Russia as benevolent partners and alternatives to the United States throughout the region.
While Chinese and Russian government disinformation operations are often similar, there are key differences. Russia lacks the means to properly court deeper commercial opportunities and its disinformation strategy is focused on disrupting social order and political stability at a national level, as seen in Colombia and Chile, two known U.S. allies. Russia also seeks to gain new friends that are preferably disinclined to the U.S. in the hope of expanding their political influence. In contrast, China is the world’s second largest economy, a major trading partner throughout the region, and an important foreign investor. While the Russian government generally attempts to disrupt, the Chinese government’s disinformation strategy tries to position China as the new benevolent hegemon and the dominant international power in the current international system.
While Mexico lies at one end of the disinformation paradigm, with propaganda from foreign state media considerably less intense and much more engaged in the cultural activism space, Venezuela lies at the other the end of the disinformation extreme, home to overt and direct disinformation from China, Russia, and the Venezuelan authorities themselves, all undermining democratic forces in the country.
Research on Peru revealed that Chinese state media is the most active in the Andean country, likely due to Peru’s wealth of mineral resources and oil, and the existence of a relatively sizable community of Chinese descent. Chinese influence is most felt through the local media, academic circles, and government officials, many of whom have visited China. Research points to Chinese government messaging centered on painting a positive picture of China’s achievements in reducing poverty and effectively fighting COVID-19, while helping Peru with medical care and supplies. In contrast, among foreign state media efforts in Peru, Russian engagement is far less a factor, particularly compared to Russian engagement in other Latin American countries, such as Colombia, Venezuela, and Argentina.
Research indicates considerable Russian and Chinese engagement in Argentina in the media and information space. For China, Argentina is a significant source of key commodities, including soybeans, meat, and seafood, while for Russia, the Argentine government’s lukewarm relationship with the U.S. is of keen interest, as it allows Moscow to cast its influence outside of its traditional spheres of influence in the Middle East and Eastern Europe. Research found that Chinese efforts largely centered around promoting the Chinese economic model and narratives of solidarity, while Russian propaganda was particularly active in positively portraying its vaccine, Sputnik V, with its disinformation operations seeking to tarnish American and European vaccines.
Chinese messaging in Colombia centers on its role as an important trade partner and therefore the narrative projected is one of mutually beneficial partnership between the two countries. In contrast, Russian state media in Colombia has engaged most actively during moments of social discontent, with that messaging largely centered around anti-government talking points.