China-in-Latin-America-AEI-Presentation-Evan-Ellis

ChinainLatinAmericaChinainLatinAmericaChinainLatinAmericaChinainLatinAmericaPresentationfortheAmericanEnterpriseInstituteWashingtonDCœJanuary18,2011Formoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail]2AnExpanding2--WayInteractionWayInteraction•$118.8binbilateraltradein2009(IMF)•From$10bin2000(PRCMOFCOM)•Butdownfrom$143bin2008•$55.6bImportsfromPRC•$63.2bExportstoPRC$63.2bExportstoPRC•↑Attentionfromleadersonbothsides•RoussefftovisitPRCbeforeApril2011p•PiñeravisittoPRC-November2010•FernandezvisittoPRC-July2010•HuvisittoBrazil–April2010•HuvisittoBrazil–April2010•OtherpresidentialvisitstothePRCby:Golding(Feb10),Lula(May09),Chá(A09)PH:PrePH:Pre--2004invisiblegrowth|20042004invisiblegrowth|2004--2008Emergence|20082008Emergence|2008--PostPost--RecessionRecessionFormoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail]ávez(Apr09)…PH:PrePH:Pre--2004invisiblegrowth|20042004invisiblegrowth|2004--2008Emergence|20082008Emergence|2008--PostPost--RecessionRecessionNatureofPRCinterestNatureofPRCinterestinLatinAmericainLatinAmerica•Reliableaccesstoprimaryproducts•Petroleum,coal,iron,uranium…•Metalsandminerals(Chinaasthe“factoryfloorof•Metalsandminerals(Chinaasthefactoryflooroftheworld—factorinputs+capitalformation)•Agriculturalgoods•↑increasingmeatconsumptionw.affluence↑increasingmeatconsumptionw.affluence•Only13%ofitslandusableforagriculture•Droughts+contamination+zoning•AccesstomarketsforChinesegoods•Traditionalmarkets:Littlegrowth+protectionism•LAamarketof$3trillion/500millionpeople•Price-sensitivef•AdvanceinternationalisolationofTaiwan•12/23nationsthatrecognizetheROCareinCentralAmericaandtheCaribbean•2007diplomaticchangebyCostaRica•2007diplomaticchangebyCostaRica•Paraguay,Panama,ElSalvador:Nomore“checkbookdiplomacy”?Formoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail]tureofPRCinterestinLatinAmericainLatinAmerica(contd.)(contd.)•StrategicPosition:aworldsafefortheriseofChina•Presence–AseatatthetableatallofthekeytablesBildiltihili•Buildingrelationships,learning•MINUSTAH–(8PLAkilledinearthquake)•IADB–LeveragingforworkprojectsinLA•$10BArgentinedebtswap•$10BArgentinedebtswap•OAS–InterestinobserverstatusatIADC•AvoidDominationofeconomicandpoliticalterrainbyapowermotivatedtoblocktheriseofChinabyapowermotivatedtoblocktheriseofChina•Benefitfromsurvivalofanti-USregimes•Vehicle:South-Southties•AlternativestoinstitutionsdominatedbytheUSy(eg.WorldBank),commercialregimes(FTAA),DollarascurrencyButcounterbalancedbyPRCneedforaccesstoButcounterbalancedbyPRCneedforaccesstowesternmarkets,capitalandtechnologyforitsrisewesternmarkets,capitalandtechnologyforitsriseFormoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail]eyCharacteristicsofPRCPRC--LATAMRelationsLATAMRelations1.↑Roleasinvestorinminingandpetroleumsectorƒ$16.3bforJunin-4,$7.1bforSinopecfor40%ofRepsolBrazil,$5bWuhan-MMXJV,$4.4b+(RioBlanco,Toromocho,Galeno),$3.1bWuhanMMXJV,$4.4b(RioBlanco,Toromocho,Galeno),$3.1bStatoilstakeOffshoreBrazil,$3.1bfor50%ofBridas,$3bTonglinginEc.Mining,$2.3bAcquisitionofOxyArgentina,$2bBahamasresort,$1.2BItaminas(MinasGerais)byECE,$1bHierro,Cobriza(Peru),$1bUreaplantinCochabambabSinomach$1BbStateGridforpoerUreaplantinCochabambabySinomach,$1BbyStateGridforpowertransmissionfacilitiesinBrazil,$700mCheryplantinJacarei,$400maluminumsmelterinTrinidad2.↑Roleassellerofincreasinglymoresophisticatedgoods2.↑Roleassellerofincreasinglymoresophisticatedgoods•Climbingthevalueaddedchain–eg.Cars,telcom,computers,appliances,machinery,A/C…Particularlyinpopuliststates3.↑Roleasbanker•$110b:PRClentmoreabroadinpast2yearsthanWorldBank•$28btoVen.,$10btoPetrobras,$10.2bilArgentinedebtswap,$1+$1+$1.7billiontoEcuador+$400mExImbankloantoJamaicaforroadproject+$15bforElMutún?Formoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail]+$15bforElMutún?ƒ$2.6Tcurrencysurplus/$200bCICsov.wealthfund(since07)•Highratesofinterest(Ec)–LenderoflastresortKeyCharacteristicsofKeyCharacteristicsofPRCPRC--LATAMRelationsLATAMRelations(3)(3)4.↑RoleinRegionalInstitutionsƒIADB(Feb09)+OAS(Observerstatus04)+ECLAC(sinceIADB(Feb09)+OAS(Observerstatus04)+ECLAC(since04),ObserverinLATAMIntegrationAssn.(Since93),ALBAƒUN–LatinAmerica5.↑RoleinontheGround(eg.Services)ƒTelecommunications:Huawei,ZTEƒLogistics:COSCO,ChinaShippingƒConstruction:ƒ$10BArgentinerailwayprojectƒ$6BCubanrefineryexpansion/LNGterminal(CNPC)ƒChinaRailwayRoad-$75BVenezuelaprojectbyƒChinaRailwayRoad-$7.5BVenezuelaprojectbyƒSinoHydro(Ecuador,Venezuelanhydroelectricprojects)ƒChinaGezhoubaGp.(Ecuadoranhydroelectricplants)ƒChinaHarborEngineeringCorp.(Ven.ContainerterminalatFormoreinformation,contact:Dr.R.EvanEllisTel:202-685-4195Email:[e-mail],JamaicaRoadProject)ƒChinaCAMCEngineering(VenPowerPlants)KeyCharacteristicsofKeyCharacteristicsofPRCPRC--LATAMRelationsLATAMRelations(4)(4)6.↑MilitaryRelationshipsƒSales–↑value-addedchain/VenezuelaasalaunchingpointƒVenez