Archive for the ‘China’ Category

Ecuador: Chinese loans, social media censorship

Friday, March 27th, 2015

Two seemingly unrelated items:

Item 1:
Ecuador Expects $4 Billion in Loans From China in 2015
It is estimated China has committed more than $12 billion in financing to Ecuador between 2009 and 2014
(emphasis added),

Most financing operations from China to Ecuador have been tied to oil sales and several have been backed with presales of crude oil.

Mr. Herrera said the new loans aren’t linked with the selling of crude oil.

The minister said despite the decline of around 50% in oil prices, the Andean country plans to maintain its level of public spending this year, thanks to loans from China, credits from multilateral lenders and governments as well as the selling of Ecuadorean bonds in international markets and domestic debt.

The minister, however, ruled out that the country plans a new bond issue in international markets, citing high interest rates.

Last Thursday the country sold $750 million of five-year bonds at a yield of 10.5%.

In plain words, it sold $750 million worth of junk bonds.

Item 2:
Correa’s Social-Media Troll Center Exposed in Quito
Lucrative Contracts to Shout Down Detractors at Taxpayer Expense

According to Mil Hojas, Ribeney employees operate multiple social-media accounts dedicated to monitoring and attacking the Ecuadorian opposition.

At taxpayer expense, and perhaps a little help from junk bond sales and Chinese loans, too?

Colombia: What other weapons were in the Chinese ship heading to Cuba

Thursday, March 5th, 2015

Along with long-range weapons systems, the BBC reports that the Chinese ship Da Dan Xia, intercepted last week by Colombian authorities as it headed to Cuba, was carrying

About 100 tonnes of gunpowder, almost three million detonators and some 3,000 cannon shells were found on board the Da Dan Xia, officials said.

But according to the ship’s records, it was carrying grain products.
. . .
The Da Dan Xia is operated by China’s largest shipping company, Cosco Shipping.

Cuba isn’t saying anything yet, but the Chinese say,

We were engaged in “normal trade cooperation involving normal military supplies.”

Rather than dig into the illegal weapons trade, American media is focused instead on Conan’s trip to Cuba,

Looks like Conan spent more time interacting with dogs than with dissidents.

Humberto Fontova reminds us that

(BTW, over TWENTY TIMES as many people have died trying to escape the place Conan advertised last night, as died trying to escape East Berlin.)



Colombia Intercepts Shipment of “War Materiel” Headed to Cuba

Tuesday, March 3rd, 2015

From the U.S. State Department website:

State Sponsors of Terrorism:

Countries determined by the Secretary of State to have repeatedly provided support for acts of international terrorism are designated pursuant to three laws: section 6(j) of the Export Administration Act, section 40 of the Arms Export Control Act, and section 620A of the Foreign Assistance Act. Taken together, the four main categories of sanctions resulting from designation under these authorities include restrictions on U.S. foreign assistance; a ban on defense exports and sales; certain controls over exports of dual use items; and miscellaneous financial and other restrictions.

Designation under the above-referenced authorities also implicates other sanctions laws that penalize persons and countries engaging in certain trade with state sponsors. Currently there are four countries designated under these authorities: Cuba, Iran, Sudan and Syria

In the news:
Colombia Intercepts Shipment of “War Materiel” Headed to Cuba (emphasis added)

Colombian authorities have intercepted a Chinese-flagged ship loaded with “war materiel” headed for Cuba.

Headline in Spanish: Autoridades Colombianas interceptan barco de bandera china cargado de armamento de guerra de largo alcance con destino a Cuba.

It was intercepted near the Port of Cartagena. The cargo includes long-range weapons systems.

According to El Tiempo, the ship did not have appropriate documentation — indicating that this was a clandestine shipment.

Capitol Hill Cubans point out,

Cuba was found to be in violation of U.N. sanctions — the most egregious violation of these sanctions to date.

Yet, Castro’s regime got away scot-free — despite a U.N. Panel of Experts documenting how the Cuban authorities lied and sought to conceal the weapons shipment.

Instead, the Obama Administration rewarded Castro’s regime with the normalization of diplomatic relations and eased sanctions for travel and trade with the Cuban military’s monopolies.

While everybody’s talking about Paris Hilton in Havana, the Communist regime’s importing long-range weapons systems; That’s today’s news in “smart diplomacy.”

China: Cristina’s twit UPDATED

Wednesday, February 4th, 2015

er, tweet,

Argentine President’s Tweet Mocks Chinese Accent During Official Visit

Argentine President Cristina Fernandez de Kirchner mimicked the Chinese accent in a tweet, replacing r’s with l’s, as she met with Chinese President Xi Jinping during a visit to raise investment in the recession-hit South American economy.
“Did they only come for lice and petloleum?” Fernandez wrote in Spanish on her Twitter account in reference to 1,000 businessmen who attended a conference where she spoke.

The best way to get a foreign government to give you billions of dollars to bail out your economy, is to make fun of their accents.

She must be off her meds.

UPDATE:
Cirstina’s ¿Serán todos de “La Cámpola”? refers to La Cámpora, a political patronage network whose purpose is to secure political support within the government for Cristina’s own Front for Victory party:

Kirchner has direct control over the network that has significantly increased its presence in state ministries and companies over the past several years.

Venezuela: Maduro does/doesn’t get $20billion UPDATED

Thursday, January 8th, 2015

After Russia, Venezuelan dictator Nicolas Maduro headed to China in his search for funds. He wore a suit:

He didn’t get what he was after:

When Nicolas mentioned US$ 20 billion, the Chinese smiled. An unscrutable [sic] smile at that. US$ 20 billion, they said, we would not pay that for all of Mongolia, said one of the Chinese. Nicolas argued back saying Sidor alone was worth US$ 10 billion, to what Ling Pin answered: “Chavez paid US$ 1.97 billion for it when it was functioning and eporting [sic]”. As we went out Maduro asked me what that was about and I said: “I did not know that”

Devil’s Excrement has the unofficial Road Trip or The Fantastic Voyage tale.

Bloomberg has the serious take:
Maduro Says Venezuela Gets $20 Billion New China Investment.

Let that heading sink in: Maduro says.

Moving right along (emphasis added),

The impact of the announcement will depend on how much of the $20 billion will be a cash transfer instead of long-term contracts for Chinese goods and labor, Eurasia Group analyst Risa Grais-Targow said in an e-mailed report.

“The funds do not necessarily represent freely available cash that the government can use for imports or to make debt payments,” Grais-Targow said.

Venezuela owes China over $45 billion in loans over the past decade, mostly in return for oil supplies, including a $4 billion loan in July. [Note: In Wednesday’s podcast, I said that Venezuela owes China over $50 billion, not including the July 2014 $4b. I stand corrected.]

Things are bad enough that

Foreign companies working to develop some of Venezuela’s most prized oilfields are asking to be compensated with crude as a way to recover hundreds of millions of dollars in unpaid cash owed to them

which, by the way, also avoids the foreign currency control mess.

But wait!

Maduro’s not the only guy looking to China for a handout:
Correa Heads to China for Financial Lifeline
Ecuadorian President Secures US$7.5 Billion Loans to Plug Oil Shortfall

Correa has already netted loans worth US$7.5 billion and signed nine bilateral cooperation agreements with his Chinese counterpart, Xi Jinping.

China Boosts Support for Latin Leftists
China Pledged Billions of Dollars of Financing to Venezuela and Ecuador, Two South American Energy Exporters Battered by Falling Oil Prices

Experts said it was unclear without further details what kind of impact the new financing would have on the Venezuelan and Ecuadorian economies.

Next thing you know, Nic & Rafa may have to start building canals.

UPDATE:
The planned investment is weird stuff

Venezuela: Maduro wants a Puerto Rican out jail

Tuesday, January 6th, 2015

. . . who didn’t want to be pardoned.

Taking a cue from the U.S.-Cuba sweet deal (sweet for Cuba, that is), Venezuelan dictator Nicolás Maduro wants to make a deal:
Venezuela’s Maduro would free Lopez if U.S. freed Puerto Rican

Venezuelan President Nicolas Maduro said on Sunday he would only seek the release of jailed opposition leader Leopoldo Lopez if the United States agreed to release a Puerto Rican nationalist currently held in a U.S. prison.

The man in question, Oscar Lopez Rivera, is serving

70 years for seditious conspiracy and a variety of weapons charges as well as the second thwarted escape attempt (which included plans for the use of violence)

in Leavenworth, and,

he is a dangerous terrorist as well as a sociopath, and has never been known to express any regret or remorse. He was a co-founder of a deadly terrorist group, who constructed bombs (their weapon of choice) and trained others in both how to build them and how to use them. He twice attempted to escape from prison, and the latter attempt included plans of violence and murder.

Lopez-Rivera was offered clemency by Bill Clinton in August of 1999 (in a move that was engineered by then Deputy Attorney General Eric Holder) but refused to show remorse.

So, not only is Maduro meddling into Puerto Rican politics again – where he clearly is not wanted, he’s offering to exchange Leopoldo Lopez, an innocent man, for a sociopath terrorist:

“The only way I would use (presidential) powers would be to put (Leopoldo Lopez) on a plane, so he can go to the United States and stay there, and they would give me Oscar Lopez Rivera – man for man,” Maduro said during a televised broadcast.

After his offer, Maduro headed overseas – in a Cuban jet – in search of money, since at home the shelves are empty and oil hit $50/barrel as of the writing of this post.

He bundled up for the occasion:

First Russia, where Putin couldn’t fit him in his schedule. After that, China, where he has a date with

Chinese President Xi Jinping during his visit and take part in a meeting between China and the Community of Latin American and Caribbean States Jan. 8-9 in Beijing.

Busy, busy.

UPDATE:
Regarding China, read today’s post by David Goldman.

China will be more active in Latin America.



Arguing with idiots about #Cuba

Tuesday, December 30th, 2014

A. J. Delgado has a great post (complete with Big Lebowski gifs), Arguing with idiots about #Cuba (h/t Babalu). Here’s a sample,

“But we do business with other repressive regimes.” 
Hm, I’m aware.

Screen Shot 2014-12-25 at 9.04.59 PM

But…

a) The “America might as well trade with Cuba because we do with X, Y, Z” is simply hogwash. Do eight wrongs make a right? Also:

– Is a single ONE of those nations in the Western Hemisphere? No. (Hard truth: we do care more about what happens in, say, England, than in Tibet. Sorry.)

– Do we have strong cultural and historical ties with any of those nations, dating back over 200 years? No.

– Did any of those nations confiscate over $1 billion dollars in US property at the time, done by the very same regime/family in power now? No.

b) More importantly, though, we’re bound by reality. Are some of our oil-supplier partners not exactly good guys? Sure. But our economic realities prevent us from ignoring that market. Ditto with China. Cuba, however, we can realistically shun.

c) Speaking of China (which anti-embargo proponents love to bring up, thinking it’s their pièce de résistance), China is not a fully Communist model in its economic approach. Unlike Cuba, a surprising amount of private enterprise and ownership is allowed. And, a surprising amount of the wages paid to factory workers, for instance, end up in the workers’ pockets. Meanwhile, Cuba has been busy passing legislation this year (no doubt in anticipation of the Obama-deal) dictating the government will keep over 90% of a worker’s wages derived from a foreign company. In any event, thanks to this business, the Chinese government is now the most well-funded tyrannical regime in history. Is that something we want to do again? Just askin’…

On the China issue, Noah Rothman points out,

First, as The Federalist’s Sean Davis pointed out, the parallels between the extension of diplomatic relations to Cuba and similar overtures toward China and Vietnam are misguided. The American interest in “opening” China was primarily political; exacerbate Sino-Soviet tensions, bifurcate the communist world, and provide America with a freer hand to prosecute the Vietnam War.

China under Zhou Enlai and Deng Xiaoping engaged in dramatic market-oriented economic reforms in the 1970s, and there was no “normalization” of relations between Beijing and Washington until 1979 – well after Kissinger and then Nixon had famously visited the reclusive communist giant in 1971 and 1972 respectively. Reforms first, normalization second.

Moreover, the suggestion that the opening of bilateral diplomatic ties and business relations between America and China helped to transform the People’s Republic into a human rights paragon overnight is complicated by the 1989 massacre of peaceful pro-Democracy protesters in Tiananmen Square. Even today, despite a booming and markedly capitalist economy, China remains one of the world’s leading human rights abusers.

No, Cuba is not China.

No, you can’t have free markets without free peoples.

No, objections to Obama’s “normalization” are not caused by our “outdated Cold War perspective”.

Yes, those who oppose the embargo were vociferous about South Africa’s apartheid, even when Cuba’s communist regime is blatantly racist, and practices a de facto apartheid medical system.

But, as A.J. is aware, when it comes to Cuba, you can’t cure stupid.

Parting question, has anyone found the list of the 53 political prisoners that were supposed to be released yet? I’m still looking.

About that Nicaragua Canal . . . UPDATED

Monday, December 29th, 2014

Instapundit links to a post on the proposed Nicaragua canal, and, since his website rejects my comment on the grounds that “Your comment currently includes words that are not allowed,” I’m posting it here (links added):

I’m very skeptical on the proposed project.

So far the only investor is Wang Jing’s HKND Group, which may (or may not) be a cover for the Chinese government, a company that made a $300 million telecommunications contract with Nicaragua.

For the Canal deal, “HKND would raise the $40 billion needed to build the canal and would have the right to operate and manage it for up to 100 years before turning it over to Nicaragua. In the meantime, Nicaragua would have a controlling interest in the canal and receive income from it.”

A final route for the canal has not yet been announced.
The following have not been made public:
No details on where the funds come from.
No feasability studies.
No environmental impact studies.
Indeed, no studies for the project have been made public.

Additionally, “it appears that the project would also include an oil pipeline, two deepwater ports, an airport, a railway, and two free trade zones. With a projected total price tag of $40 billion, the overall project would cost four times Nicaragua’s 2011 gross domestic product ”

The expansion of the existing Panama Canal cost $5.7 billion. The Nicaraguan canal would be 3 1/2 times longer over an existing shallow lake, & is estimated to cost only $40 billion? On the Country of Lakes and Volcanos?

While i agree that “a healthier Latin America, both economically and politically, is very much in our interest”, Nicaragua, hostile to the US, is following the Venezuelan model, not the healthiest economically and politically.

Until all these items are clarified, my advice is “don’t be the next Lord Crawley.”

UPDATE
Comment
from Doug Wenzel,

Jorge Luis Quijano, Administrator of the Panama Canal Authority says in an interview granted to La Estrella de Panamá that ACP experts estimate this as being a $65-70 billion project, and that five years is way too optimistic. There are also many questions about Environmental mitigation.

http://laestrella.com.pa/panama/nacional/quijano-invertiria-solo-real-canal/23831295

My personal focus is not on that, but on OpEx for this canal. First, the much longer time in canal waters at slow speed mitigates some of the distance advantage for certain port pairs, and has the largest effect on time-sensitive cargoes, which may be willing to pay the highest tolls per ton.

More importantly, the route will require triple the maintenance dredging, as well as triple the piloting and tugboat hours. Those will all affect what the canal can charge for a transit, and therefore the gross margin per transit.

Furthermore, of all the ships that could only use this canal, and not the one in Panama, most transport low value, time-insensitive cargo. (bulk carriers and VLCC’s). The Maersk EEE and larger container ships can call on only a few dozen ports worldwide, not just because many ports can’t physically handle their size or draft, but because most ports can’t produce enough demand to justify a weekly or even biweekly port call.

This canal is obviously a threat to the tolls that Panana could charge. However, in a race to the bottom, the low cost provider usually wins, and Panama will have lower costs because the Panama Canal is so much shorter.

—————————-

Panama’s neighbor to the north, Nicaragua, is hoping a transoceanic canal and similar prosperity are in its near future; now that Venezuela’s oil money dries up, does this mean China is willing to prop up the Nicaraguan economy?

From back in 2008, China’s Control of the Panama Canal Revisited.

Ecuador: Selling it to China

Friday, December 19th, 2014

This is a photograph of a 420,000-gallon oil spill in Ecuador’s Amazonian region in June 2013:

Andrew Ross, writing at The Nation, asks,
Why Is Ecuador Selling Its Economic and Environmental Future to China?
The slick, oily underside of Correa’s “citizens’ revolution.”
(emphasis added)

While large swaths of the Amazon Basin remain uncharted, the most telling maps depict the region carved into numbered oil blocks, some of them hundreds of square miles in area. The Pañacocha field, for example, sits in Block 12; the ITT oil reserve is located in Block 43; and Block 57 is where Suárez took me. The blocks are periodically auctioned off as concessions to oil companies, and more and more of them are marked as a Chinese claim or interest. The Chinese extraction sites are remote, but anyone traversing the Amazon waterways, as I did this past summer, will routinely pass boatfuls of Chinese oil workers. At this point, China exercises a near monopoly on Ecuador’s oil—up to 90 percent this year alone—and is fast becoming the dominant player in mining and mineral extraction.

Of course, Ecuador is hardly alone in its growing dependence on Beijing. China committed almost $100 billion in loans to Latin America between 2005 and 2013—$15 billion last year alone, while the World Bank lent a mere $5.2 billion. But many believe that the erosion of sovereignty has been sharper in Ecuador than elsewhere in the region. The terms of its loans from Beijing are not fully transparent, giving rise to the worst suspicions. A March 2014 Amazon Watch report alleged that Petrochina has the contractual right to seize assets from any oil companies operating in Ecuador if the nation does not pay back China in full. A more extreme version of this claim is that the terms of loans include a “sovereignty immunity waiver,” that permits China to seize Ecuador’s own assets if it defaults. One of the administration’s chief critics, Acción Ecológica director Alexandra Almeida, told me that “the agreements with the Chinese are unlike any other. Even with Chevron we knew what we were getting. No one knows that much about the Chinese loans.”

Ross views the situation from the left, saying things such as “On the face of it, Beijing is not as easy to demonize as the infamous Paris Club, which represents the interests of Northern creditors,” and “has no history of ecological debt to Latin America.” But Ross is not blind to the fact that

environmentalists, like the YASunidos, have become Correa’s number-one enemy, labeled by some of his ministers as “enemies of the state.” Recent shifts in the interpretation of the penal code have made it possible to criminalize dissidents as “terrorists,” and domestic repression is growing.

Read the whole thing.

Venezuela: Oil break-even price?

Tuesday, December 2nd, 2014

Tom Bemis looks at Breakevens for most major oil-producing countries (emphasis added)

A widely used measure of the impact of oil prices on major producers’ governments is the fiscal breakeven price. That’s “the average price at which the budget of an oil-exporting country is balanced in a given year,” according to Standard & Poor’s. Estimates of fiscal breakeven prices can vary considerably based on a variety of factors including actual budget expenditures, and differences in oil production forecasts.

In most cases, the oil price necessary to balance the budgets of major oil producing countries is above $100 a barrel in 2015, according to data from Citi Research’s Edward Morse.

Venezuela, already facing serious fiscal woes and rampant inflation, needs oil at $151 a barrel next year to balance its budget, according to the data.

Iran, which has yet to agree to curb development of nuclear weapons and heavily subsidizes gasoline for its citizens, needs oil at $131 a barrel.

And Russia, whose seizure of Crimea and continuing aggression towards Ukraine has raised tensions throughout Europe and inspired western financial sanctions, needs oil at $107 for a chance of getting its finances in order.

Silvana Ordoñez:

Venezuela’s future? ‘Barbarity and people looting’One analyst at Nomura recently estimated that Venezuela may need oil prices to hit $200 a barrel to balance its budget. (The precise figure is difficult to determine, because Venezuela doesn’t disclose as much economic data as other countries do.)

Will The Minister Come Back Empty Handed From China?

It seems as if President Maduro really believed that OPEC would cut production after he sent Ramirez to visit a few countries, including Russia, who happens not to be a member of OPEC. But as most analysts expected, OPEC did not cut production and scheduled the next meeting for next June, bringing a lot of people back to reality, including Maduro. It was only after Ramirez reportedly left the meeting “red faced”, that it sunk in that maybe Plan A was not going to work. Thus, Maduro switched to Plans B and C. Plan B is to “hope” that oil prices bounce back and plan C was to send Minister of Finance Marco Torres to Beijing to see if he can get some money there. Plan D was to name a commission to cut salaries and luxurious expenses. Yeah, sure!

I have been arguing with a bunch of friends about the probability that Torres will come back with a significant loan, which I peg to be around 0.00001, but they seem to think it is somewhat higher. You see, they actually believe that Venezuela has something to offer the Chinese, like oil or oil fields. But the reality is that Venezuela has little to offer at this time and the Chinese know it, so that Minister Torres is very likely to come back empty handed.

Related:
María Corina, and a unified theory of rationed repression