The China Signal - November 21
Tibet Summit Resources $2.2bn lithium investment, Boric invited to Beijing, Nicaragua's police receive equipment, China Unicom wins Mexican permit
G’day, and welcome to The China Signal. In this edition, Tibet Summit Resources announces a $2.2bn lithium investment in Argentina; Xi invites Boric to China in 2023; Beijing donates “a notable amount” of equipment to Nicaragua’s police force; China offers to buy out El Salvador’s debt as free trade talks begin; BYD enters dealership partnership in Brazil and considers production plans; China Unicom wins 30 year permit to operate in Mexico; plus much more. Read on.
Critical Minerals 🔋
Argentina 🇦🇷
~ Article above is paraphrased from Spanish ~
China's Tibet Summit Resources will invest US$2.2 billion in two lithium exploration projects in Argentina.
…The Chinese firm plans to allocate US$700 million to a project called “Salar de Diablillos” (Salta province), where starting in 2023, it expects to produce 50,000 tons per year of lithium carbonate for batteries.
Another US$1.5 billion will be invested to build the “Salar Arizaro” plant in the same jurisdiction. Due for completion in 2024, this plant should provide between 50,000 and 100,000 yearly tons of the mineral.
…According to the current lithium reference prices, Argentina could earn at least US$8 billion when the two plants are fully operative. Tibet Summit Resources aims at generating around 10,000 new jobs for the local population. (RP)
Diplomacy 🕊️
Argentina 🇦🇷
Argentine President welcomes Chinese investors | MercoPress | October 25, 2022
On Monday 25 October, Argentine President, Alberto Fernández, met at Casa Rosada with China Railway International Group (CRIG) President, Bi Yanchun, to discuss future investments in infrastructure, energy, and technology projects.
…Among the projects under evaluation are the modernization and electrification of the Belgrano Norte railway line between Villa Rosa and Retiro, and road connections linking the provinces of Chaco and Corrientes, and Santa Fe and Ente Ríos across the Parana River.
…CRIG is the international business subsidiary of China Railway Group Limited (CREC), one of the world's largest civil construction companies with strong expertise in rail and road infrastructure.
Background: China Railway Group Limited (“CREC”) + China Railway International Group Co., Ltd. (“CRIG”) 🔎
Founded in 2007 and listed on the Shanghai, and Hong Kong (both December 2007) Stock Exchanges respectively, the China Railway Group Limited (“CREC”) is the world’s second largest construction company, and China’s 10th largest company by revenue. Headquartered in Beijing, CREC is a subsidiary of Chinese state-owned holding company China Railway Engineering Corporation (“CRECG”).
CREC’s business scope covers almost all fields of infrastructure construction. It is actively involved in Belt and Road Initiative (BRI) projects spanning over 90 countries. CREC is particularly active in African, South-East Asian, and East Asian projects. In Latin America, CREC’s major projects are in Argentina (Mariana Lake lithium mine), Chile and Peru (railway construction, and road maintenance respectively). CREC is ranked 34th on Fortune’s Global 500 2022 List, with revenues around US$166 billion.
China Railway International Group Co., Ltd. (“CRIG”) is a subsidiary of CREC, charged with expanding its overseas operations.(RP)
Chile 🇨🇱
President Xi invites Chile's Boric to China in 2023 | Reuters | November 18, 2022
China's President Xi Jinping has invited Chilean leader Gabriel Boric to visit the country in 2023, following the bilateral meeting the two held on the sidelines of the APEC summit in Thailand on Friday 18 November, Chilean Foreign Minister Antonia Urrejola said.
China is the South American country's main trading partner.
Boric designa a Mauricio Hurtado como embajador en China | La Tercera | October 27, 2022
~ Article above is paraphrased from Spanish ~
After the failed nomination of Andreas Pierotic in July, the Chilean government has nominated Mauricio Hurtado as Chile’s Ambassador to the Asian country.
Pierotic’s nomination was halted following accusations of employee mistreatment, conflicts of interest, and corruption allegations linked to his role as a shareholder in Chilean company "Info Technology Solutions Chile S.A".
Hurtado is a former Minister Counselor of the Chilean Embassy in China (2004-2008), and Chile’s ambassador to Cuba during the second term of Sebastián Piñera’s Presidency (2018-2022). (RP)
Cuba 🇨🇺
Cuba's president to visit China Nov 24-26 | Reuters | November 21, 2022
Cuba's President, Miguel Díaz-Canel, will visit China from Nov. 24-26, Chinese state media reported on Monday 21 November.
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Chinese community newspaper relaunched in Cuba | Xinhua | November 14, 2022
~ Xinhua is a Chinese state backed media outlet ~
After its publication was suspended for more than four years, Kwong Wah Po, the only newspaper serving the Chinese community in Cuba, was relaunched on the weekend of November 12.
…At the relaunching ceremony, Chinese Ambassador to Cuba, Ma Hui, said that the newspaper helps strengthen the historic and cultural bonds that unite the two friendly nations …Cuban Deputy Minister of Culture, Fernando Rojas, said Chinese culture plays a key role in the formation of Cuba's diversified culture.
Nicaragua 🇳🇮
~ Article above is paraphrased from Spanish ~
On Tuesday 8 November, China’s Ambassador to Nicaragua, Chen Xi, announced the Chinese government’s donation of “a notable amount” of logistical equipment to the Nicaraguan National Police. More specific details of the donation weren’t disclosed. The move was widely criticized in relation to Nicaragua’s President Daniel Ortega's record of widespread human rights abuses. (RP)
Taiwan Diplomacy 🇹🇼 🕊️
Paraguay 🇵🇾
On Tuesday 1 November, Paraguay and Taiwan signed a sanitary agreement whose main objectives include the harmonization of regulatory medical procedures.
China/Taiwan recognition is becoming an increasingly divisive topic in Paraguay (see TCS October 21).
One presidential candidate for Paraguay’s April 2023 elections Santiago Peña has vowed to break relations with Taiwan in order to “open Paraguay to international markets, and [thus] China,” he declared on 27 October.
On 2 November, Pedro Galli, the president of livestock body the Rural Association of Paraguay (ARP) stated that Paraguay’s political class should abandon its “romantic view of diplomacy" and switch recognition to mainland China. Galli compared Paraguay’s meat export to Brazil and Uruguay, who export beef to China. (RP)
Saint Lucia 🇱🇨
Eastern Caribbean Solar Challenge: Race to the Sun - TFIGlobal - November 12, 2022
…Taiwan has come forward to offer financial aid of US$200,000 to Saint Lucia to finance the “Eastern Caribbean Solar Challenge: Race to the Sun Initiative”.
The official handover of an initial US $80,000 of the total sum of US $200,000 was done on Thursday, November 3, 2022. This aid will go towards promoting the use of solar power in Saint Lucia’s public sector.
Through this Organization of Eastern Caribbean States (OECS)-coordinated initiative, Saint Lucia hopes to reduce overall petroleum gas imports from China - one of its main global suppliers - the US, and India. (RP)
Saint Kitts and Nevis 🇰🇳
Saint Kitts and Nevis’s Prime Minister Terrence Drew chose Taiwan for his first state visit since taking office in August, visiting Taiwan from November 9 to 12. Drew and his Taiwanese counterpart Tsai Ing-wen expressed the will “to continue to achieve excellent results through wide-ranging bilateral collaboration”. (RP)
E-commerce 📦
Brazil 🇧🇷
Alibaba's Cainiao opens LatAm headquarters in Brazil | CNBC | November 13, 2022
Alibaba’s logistics arm Cainiao announced Monday the opening of its Latin American headquarters in Sao Paulo, Brazil.
Cainiao ships most AliExpress orders from China to Brazil, the company said, claiming it operates eight charter flights a week between the countries.
Cainiao also works with local merchants in Brazil. The company on Monday officially opened a package sorting center in the country, following the launch in October of sorting centers in Mexico City and Santiago, Chile.
The company claims its local express delivery network covers more than 1,000 cities in Brazil, with one-day delivery to customers in Sao Paulo and some other cities.
Over the next three years, Cainiao said it plans to set up 1,000 more lockers in 10 cities in Brazil for package and food delivery. The company also said it aims to launch nine more distribution centers in seven states in Brazil.
Cainiao said its expansion will also help Brazilian businesses sell goods such as coffee, nuts and propolis - a health product - to Chinese consumers via Alibaba’s Tmall e-commerce platform.
Cainiao launched a weekly cargo flight between China and Brazil in March with Qatar Airways. See TCS March 11. (MH)
Finance 💸
Argentina 🇦🇷
During an interview with local newspaper “El Cronista”, Argentinian Ambassador to China, Sabino Vaca Narvaja announced that the Argentine government is coordinating a technical mission to be led by Marco Lavagna, director of the National Institute of Statistics and Censuses (INDEC), before the end of the year to advance several planned BRI projects.
As detailed in TCS October 21, these projects include the stalled Atucha III nuclear power plant, the expansion of gas pipelines to Vaca Muerta, the rehabilitation of the Belgrano Cargas and San Martín railroads, and the reactivation of the Patagonian dams (whose financing was reactivated at beginning of November).
The two Presidents further discussed bilateral relations at the G20 in Bali.
Argentina y China afianzan su relación comercial con el yuan | Escenario Mundial | November 9, 2022
~ Article above is paraphrased from Spanish ~
On Wednesday 9 November, Argentina’s yuan clearing service was officially launched.
With this, Chinese and Argentine companies and financial institutions can use the yuan for cross-border transactions. (RP)
Military 🎖️
Argentina 🇦🇷
According to recent reports by French independent media Intelligence Online, China aims to extend its influence into South America by establishing a port at Argentina’s Ushuaia. The port could become a naval base. It is also alleged that China's military has already made the arrangements with Gustavo Melella, the provincial governor. In detail:
…The proposed enclave would be accessible only to Chinese military personnel, and control a vital passage connecting the Atlantic and Pacific oceans.
According to the same sources, discussions were mediated by an official of the Chinese Communist Party (CCP) based in Argentina, Shuiping Tu. Tu also represents Chinese state-owned HydroChina Corp in South America. (RP)
Natural Gas 📈
Colombia 🇨🇴
China's Setco lands Colombian gas pipeline contract | BNamericas | October 24, 2022
Independent gas producer Canacol Energy Ltd. has signed an agreement with Chinese engineering group Setco for the construction of a 289 km pipeline in Colombia, the Canadian-based firm said on Monday 24 October.
The Jobo-Medellín project is expected to be concluded in December 2024, initially transporting up to 100Mf3/d (million cubic feet a day) from natural gas fields near the Caribbean coast to Colombia's second largest city.
“The construction of this pipeline will allow [us] to ship our gas to the interior market of Colombia and will lift our gas sales above 300Mf3/d in 2025,” Canacol CEO Charle Gamba said in a statement on Monday …According to permitting documents seen by BNamericas, overall investment in the project is forecast to reach around US$430 million (≈ COP 2.13tn).
Gamba said Canacol's key selection criterion for the BOOM (build, own, operate and maintain) contract was the shipping price proposed by bidders. Under the terms of the deal, Setco will be required to cover 100% of the project's costs and will own, operate and maintain the pipeline.
"[Our] sole commitment ... is limited to the execution of a transportation agreement whereby [we] will pay a fixed fee for a certain volume of gas over a certain period of time," the statement said …According to Gamba, the firm is negotiating additional long-term take-or-pay agreements to ensure the pipeline is fully utilized at its initial capacity when commercial operations begin. (RP)
Trade 📊
El Salvador 🇸🇻
China and El Salvador to begin free trade talks | Reuters | November 9, 2022
China and El Salvador will begin FTA talks, the Chinese ambassador to the country, Ou Jianhong, and Salvadoran President, Nayib Bukele, said during an event in El Salvador on Wednesday 9 November.
Both countries said a treaty would be finalized "as soon as possible". The announcement came as El Salvador received more than 1,400 tonnes of fertilizer and more than 900 tonnes of wheat flour from the Asian nation, which El Salvador said would "mitigate the impact of the worldwide economic crisis."
Earlier on 7 November, the Salvadoran Supreme Court issued a proclamation to formally suspend the 2007 FTA with Taiwan. El Salvador broke diplomatic relations with Taiwan in August 2018.
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According to Salvadoran Vice President, Félix Ulloa, China has also offered to buy El Salvador's debt to help refinance its foreign obligations. The Central American country is trying to reorganize its external debt to avoid defaulting, and currently has about US$670 million in bonds maturing on January 24, 2023.
El Salvador has already repurchased part of the bonds maturing in 2023, and 2025 with a public offering that closed in September. A new offer to purchase the remaining debt is expected by the end of this month. El Salvador currently holds the lowest credit rating in Central America from Moody's, S&P, and Fitch Ratings. (RP)
Automotives 🚙🚛
Brazil 🇧🇷+ Mexico 🇲🇽
~ Global Times is a Chinese state backed media outlet ~
BYD said on October 26 that it has entered into a partnership with Saga Group, the largest dealership group in Brazil, and established its first store in the capital city of Brasília. Currently, BYD boasts 10 dealerships operating in Brazil, with franchises across 31 major cities.
In the Brazilian market, BYD has worked with its local partners to introduce a series of BYD new-energy vehicles (NEVs), including the pure electric SUV Tang EVs, Premium Sedan Han EVs, and D1 EVs, and recently launched presales of the BYD plug-in hybrid model, the Song Plus DM-i, according to a statement published through the company's WeChat account.
…Ningbo Tuopu Group Co, a Chinese enterprise specializing in R&D, manufacturing, and sales of auto parts, announced in September that the company will establish a subsidiary in Mexico with total investment no more than $200 million in order to win more orders and provide support for strategic clients.
BYD considers production in Brazil - electrive.com - November 3, 2022
BYD plans to produce electric vehicles and process battery raw materials in Brazil. To this end, the Chinese manufacturer has signed a letter of intent with the government of the state of Bahia to set up three production lines in the city of Camaçari.
…final details still need to be clarified, but according to the information so far, the construction of the BYD plants in Camaçari is to begin in June 2023.
…Two assembly lines for raw materials …and electric bus and truck [chassis are planned] to go into operation in October 2024, followed by the third line for electric and plug-in hybrid cars in January 2025.
BYD plans to be based on a former Ford industrial site in the city, which closed in 2021. According to the Bahia government, the Chinese manufacturer is willing to invest three billion reals (about 600 million euros) in the facilities and create 1,200 direct jobs.
Agriculture 🌽
Brazil 🇧🇷
Beijing is diversifying its import of key commodities including corn and soymeal to mitigate against geopolitical risk.
Brazil moves closer to China corn exports as Beijing approves traders | Reuters - November 2, 2022
Chinese customs updated its list of approved Brazilian corn exporters on Wednesday [2 November], a move a Brazilian agriculture official said could jumpstart sales of corn to the world's second-largest economy.
The approvals could reshape global trade flows and result in fewer sales for farmers in the United States, the world's top corn supplier. China relied on the United States and Ukraine for most of its corn supplies but Russia's invasion of Ukraine has disrupted exports.
Small Chinese imports from Brazil may begin soon, but larger shipments are not expected until the next harvest begins in early 2023, he added.
Beijing and Brasilia had signed a protocol for exporting corn from Brazil to China in 2014 but little trade had happened due to complex inspection requirements.
The countries agreed to a revised protocol during talks in May, just months after Russia invaded Ukraine.
Buenos Aires Times | China set to buy Brazilian soymeal to diversify supplies - November 5, 2022
China has approved 14 Brazilian facilities to ship soymeal, including some that belong to Bunge Ltd, Olam Group Ltd and Coamo, one of the world’s largest agricultural cooperatives, according to a list published recently on the Chinese customs website. This indicates that China could become a bigger buyer of soymeal when margins are profitable.
At least 30 sites applied to the Brazilian Agrictulture Ministry for a licence to export soymeal to China, according to people familiar with the matter, who asked not to be identified as they’re not authorised to speak publicly. In addition to the 14 approved, five are under review, three are waiting to be reviewed, two have issues to fix and three were denied, which may soon bring the total number of authorised facilities to more than 20.
This was first covered in TCS August 12. (MH)
Telecommunications 📱📡
Mexico 🇲🇽
State-owned Chinese telecom gets permit to operate in Mexico - Mexico News Daily - October 21, 2022
The Federal Telecommunications Institute (IFT) has granted China United Network Communications Group, known as China Unicom, a license to operate here [for 30 years], the newspaper El Economista reported Wednesday.
It said that the license allows the Hong Kong-based business – one of China’s largest telecommunications companies – to enter the fixed and mobile telephone markets in Mexico.
Citing IFT documents, El Economista also said that the Chinese company is interested in developing its own fiber-optic networks.
China Unicom’s authority to operate in the United States was revoked by the U.S. Federal Communications Commission (FCC) in January due to national security concerns. The FCC last month named China Unicom and two other Chinese telecommunications companies as threats to U.S. national security as they are subject to Chinese government influence and control.
Air Connectivity ✈️
Mexico 🇲🇽
This week, Mexico’s Embassy in China reported the possibility of Hainan resuming its service between Beijing International Airport (PEK) and Tijuana International Airport (TIJ).
This would re-establish direct routes between the countries for the first time since early 2020. The pandemic halted seven flights between the two countries – three from Aeromexico, two by Hainan, and two by China Southern. (RP, MH).
Surveillance 👮🏼
Argentina 🇦🇷 + Brazil 🇧🇷 + Chile 🇨🇱 + Ecuador 🇪🇨
110 Overseas - Chinese Transnational Policing Gone Wild - Safeguard Defenders - 12 September 2022
Published by Spanish-based human rights NGO Safeguard Defenders, the report claims that “between April 2021 and July 2022, Chinese police ‘persuaded’ 230,000 ‘fugitives’ to return to China in order to face potential criminal charges, often by means of threats and harassment to family members back home, or directly to the target abroad either through online or physical means”.
The report details over 54 Chinese police centers in 27 countries. Six are in 4 Latin American countries: Argentina (Buenos Aires), Brazil (Rio de Janeiro, and São Paulo), Chile (Viña del Mar), and Ecuador (Guayaquil, and Quito).
Chile’s Home Office Minister, Carolina Tohá, said the local authorities are willing to contribute to an international investigation. The local Chinese Embassy confirmed the center’s existence in Viña del Mar, but asserted that the center provides services to Chinese citizens in the country. (RP)
