Steve Hanke has the graph:
Expect continued investment in Latin America.
Faustam fortuna adiuvat
American and Latin American Politics, Society, and Culture.
Steve Hanke has the graph:
Expect continued investment in Latin America.
China’s been buying raw materials big-time in Latin America. Brazilian company Vale made a deal for Chinese-built ships, and, bam! now the world’s biggest iron ore ship is not allowed to dock in China:
Last December the first vessel, the Valemax Berge Everest, docked in the northeastern Chinese port of Dalian, where it discharged 350,000 tons of iron ore in 55 hours—a world record. The head of China’s steel industry association said the ships would help lower costs.
But a month later China’s Transport Ministry, citing concerns about Chinese ports ability to handle such ships safely, issued a circular that effectively banned them. The Chinese Shipowners’ Association had denounced the Valemax ships as “a matter of monopoly and unfair competition, which not only harms the shipping interest of mainland China, but also that of South Korea, Japan and Taiwan area.” The association declined to comment for this article. The Transport Ministry didn’t respond to requests for comment.
The appearance of a 60-centimeter crack on the hull of a Valemax ship in Brazil last December bolstered the ministry’s concern. But engineers specializing in ship safety said the incident was isolated and insufficient to cast serious doubt on the safety of Valemax ships. Valemax vessels have docked at ports in such places as Japan, Italy, the Netherlands and the Philippines.
The chairman of the shipowners’ association is Wei Jiafu, who also is chairman of state-controlled shipping line China Ocean Shipping (Group) Co., the country’s largest shipping line by capacity. Captain Wei, as he is often called, is a rare colorful executive in China’s staid business sphere and once was captured by pirates. The Cosco chairman also is a senior member of the Communist Party and a member of the powerful CPC Central Committee for Discipline Inspection, an internal discipline watchdog.
Mr. Wei has been critical of shipping-industry overcapacity and at a September conference decried “vicious competition” from new entrants into the sector. The company’s China Cosco unit posted a 10.5 billion yuan ($1.69 billion) loss last year, hobbled by a sector glut, slowing global trade and the company’s own shipbuilding binge. The unit, which is publicly traded, is on track to declare a sizable loss this year.
Industry watchers said Cosco’s opposition represented the biggest barrier to Valemaxes docking in China. “Cosco had the most to lose from Vale’s plan,” said Macquarie Securities analyst Janet Lewis, who described Mr. Wei as the “most vocal” proponent of banning Valemax ships.
Vale’s representatives are waiting to meet with the Transport Ministry; Dilma Rousseff pressed for a joint task force with China’s top economic planning agency, the National Development and Reform Commission; China’s leadership is in transition.
The only thing you can count on is that nothing’s going to happen until the powers-that-be in China’s new leadership get to profit from all of this.
In case you are under the impression that China has a capitalist economy, here’s the dictionary definition of mercantilism.
Cholera death toll at 158; Cuba scrambles to fight rare cholera outbreak, and the understatement of the week, An outbreak of cholera tests a much-praised health system
Puerto Rico Seeks US Help to Fight Crime, Drugs
To Power Syria, Chávez Sends Diesel
The weeks’s posts:
10 ways Chavez has presented a national security threat
El Nuevo Herald reports that Hugo Chávez is ceding control over Venezuela’s oil to China, (link in Spanish) Hugo Chávez cede a China el control del petróleo.
The article states that El Nuevo Herald has obtained documents showing that Venezuela’s increasingly dependent on China’s financing and direct investments to the tune of US$80 billion. In exchange, China is playing a greater part on Venezuela’s strategic decision making regarding especially the oil-producing Orinoco area.
The documents obtained by El Nuevo Herald detail a series of negotiations earlier this year between the Venezuelan government, China International Trust and Investment Corporation (CITIC), and the Industrial and Commercial Bank of China Ltd. (ICBC) for 10% on Petropiar, a joint venture with assets previously expropriated from ConocoPhillips. ConocoPhillips is suing Venezuela in international courts for compensation over these assets.
According to the documents, the purpose of the venture is
“To create a joint venture in China for the special purpose of entering the Asian markets and obtain investments for the Orinoco oil belt.”
In the article, Evan Ellis of the Center for Hemispheric Defense Studies points out that, as this is clearly a risky venture, China is taking control of how the money will be spent, introducing review and monitoring mechanisms, and deciding how the revenues will be distributed and to what accounts.
Hence, what we’re seeing here is Chávez playing a game of 3-card monte: Stealing from ConocoPhillips, taking from the Chinese, and exchanging hard assets for entering the ever-risky Chinese stock market…with China in charge.
Related business news: China State Grid Signs Contract With Venezuela
State-owned China State Grid Corp., the country’s largest grid operator and power distributor, said it signed a $1.31 billion power-transmission agreement with Venezuela’s National Electric Corp.
The agreement, signed last week, would create the largest Chinese power-transmission project in Venezuela by value and is State Grid’s first overseas grid construction contract, it said on its website.
The contract includes building a power-transmission facility in Caracas and nearby regions that will significantly boost Venezuela’s transmission capacity, it said.
In other Chávez news, he’s declared himself cancer-free, again.
Gasoline rationing, Hugo style, Another Day, Another Control In Venezuela.
Cross-posted in The Green Room.
State Grid Corp. of China said Tuesday it agreed to buy seven high-voltage electricity transmission assets in Brazil from Spanish construction firm Actividades de Construccion y Servicios SA ACS.MC -2.06% and its subsidiaries for 2.04 billion real ($1 billion), including debt.
The acquisition marks State Grid’s second investment in Brazil and its fourth major investment overseas, and is the most recent in a string of deals in which a European company has looked to exit an investment amid the debt troubles facing the continent.
State Grid’s latest deal involves seven electricity-transmission assets spanning eight states in Brazil, with a total length of about 2,792 kilometers. A majority of the assets to be acquired are currently in operation, with the remainder expected to begin commercial operation by the end of this year, the company said in a statement.
This continues the trend where China expands its reach in our hemisphere; this time, however, China is not acquiring a raw materials company.
Chen Guangchen and his family are on their way here,
BEIJING — Blind legal activist Chen Guangcheng, who emerged at the center of a diplomatic row between the U.S. and China, left Beijing on a United Airlines flight bound for Newark, N.J., Saturday afternoon after Chinese officials and American diplomats swiftly arranged his travel out of the country for an uncertain new life in the United States.
Chen, in a brief telephone interview with The Washington Post, said he still did not have a valid passport in hand when he received a call Saturday from Chinese officials telling him to pack his belongings.
“They came to my ward suddenly at around 11 o’clock this morning,” Chen told the Post. “It’s a surprise.”
Chen said U.S. diplomats arrived at the airport around 2 p.m. Chen’s wife, Yuan Weijing, reached by telephone while waiting for the flight, said Chinese officals gave the family their passports after they arrived at the airport. U.S. diplomats readied the visa papers.
United Airlines Flight 88 to Newark took off several hours behind schedule. The delay was likely caused, among other things, by a thunderstorm.
His flight is scheduled to arrive in Newark at 6:05PM.
The Wall Street Journal reports that Chen will most likely study at NYU rather than seek political asylum.
U.S. Rep. Ileana Ros-Lehtinen (R-FL), Chairman of the House Foreign Affairs Committee, released the following statement today regarding the announcement that Chinese lawyer and human rights advocate, Chen Guangcheng, has left China for the United States. Statement by Ros-Lehtinen:
“I am pleased and relieved by the announcement that blind Chinese lawyer and human rights advocate, Chen Guangcheng, his wife, and their two children have left China for freedom in the United States.
“Mr. Chen’s journey to the U.S. marks the end of a seven-year ordeal of harassment, imprisonment, and beatings by the Chinese regime. He dared to publicly speak the truth about the abuse and violence that Chinese officials inflict on the women and families of his home province and, for that, he suffered greatly.
“I remain gravely concerned about Chen’s relatives and fellow human rights advocates who remain in China and face retribution by a Beijing regime that denies the most fundamental freedoms to the Chinese people.
“Congress will remain vigilant on behalf of Mr. Chen’s relatives and fellow activists. Their well-being must remain a priority for the United States. Responsible nations must not lose sight of our moral responsibility to support those who suffer under the chokehold of repressive rulers.”
Linked by Instapundit. Thank you!
Heritage held a press conference with Bob Fu, President of China Aid and Tiananmen Square student leader and Reggie Littlejohn of Women’s Rights Without Frontiers. Both have long established relationships with Chen.
It is worth noting that Chen shares with Cuban dissident Dr. Oscar Elias Biscet a concern for the rights of women not to endure forced abortions.
Activist Chen Guangcheng: Let Me Leave China on Hillary Clinton’s Plane
In an exclusive interview with The Daily Beast’s Melinda Liu, blind dissident Chen Guangcheng says he’s been abandoned by American officials at a Chinese hospital and begs to leave the country on Hillary Clinton’s plane.
When U.S. officials escorted him out of the U.S. embassy shortly after 3 p.m. Wednesday, Chen thought he’d extracted a promise that at least one of them would stay with him at the hospital, he said. “Many Americans were with me while I checked into the hospital and doctors examined me. Lots of them,” he told me from his hospital bed, where he’s being treated for broken bones in one foot, an injury sustained when he fell after climbing a wall during his daring escape from house arrest late last month. “But when I was brought to the hospital room, they all left. I don’t know where they went.” The ordeal was all the more bewildering because Chen is blind and was hurt during his escape; he needs crutches or a wheelchair to move around.
The hours ticked by, and Chen became more and more agitated. Even though he’d originally told friends and embassy officials that he wished to remain in China, now he wanted to leave. “I hope to seek medical treatment in the U.S. with my family, and then I want to rest,” he said. “As for the future, we’ll deal with that in the future.” At the hospital, Chen’s fears mounted as his wife told him she’d been tied to a chair, beaten, and interrogated by Chinese guards after they learned he had entered the U.S. embassy in Beijing last Friday.
Nick Zahnpoints out,
Congressman Frank Wolf (R–VA) reminds us in his Foreign Policy piece:
During a visit to Asia early in her tenure as secretary of state, Hillary Clinton famously said that U.S .concern with human rights issues in China “can’t interfere with the global economic crisis, the global climate change crisis, and the security crisis.”
It is likely that this prioritization has not been forgotten by China’s leadership.
one wonders what impact this might have on the Obama Administration internationally and domestically. Frida Ghitis, in an opinion piece at CNN.com, puts it this way:
The Chen case, however, could become iconic. If the Obama administration cannot explain what went wrong, it will have opened itself to criticism from human rights advocates and from Republican rivals, that he badly fumbled.
The Chinese government has demanded an apology from Washington for helping Chen and for interfering in Chinese domestic affairs. But the Obama administration, which claimed it had stayed true to American values in the Chen case, needs to prove that it has the moral strength to stand up for one courageous individual who sought help.
This is not just about Chen. It is about universal principles of human rights, really, and about America’s willingness to defend them on the global stage. The whole world is watching.
We can’t save every political prisoner in China, but when they show up at the doorstep of our Embassy and we let them in things change significantly. If it turns out that we’ve turned Chen and his family back over to the wolves that’s going to be something the Obama Administration will have to answer for at some point.
Doug is an optimist. The media will turn a blind eye on Chen, and the Obama administration will have to answer to no one.
Prior post on Chen here.
Didn’t take long for the Taiwanese Animation folks to come up with something,
What initially seemed like a potential victory on the human rights front for the U.S. administration was quickly spiraling Wednesday evening into a worst-case scenario, fuelled by a series of updates blasting out regularly on Twitter. Chen was no longer under American protection, but in a Beijing hospital surrounded by Chinese plainclothes police, and it was uncertain whether Chen had left on his own free will, as U.S. officials maintained, or under coercion.
Clinton, who spoke by phone with Chen in what U.S. officials described as an “emotional” conversation, said in a statement that she was “pleased that we were able to facilitate Chen Guangcheng’s stay and departure from the U.S. Embassy in a way that reflected his choices and our values.”
Follow-up post here.
A couple of notes here. First, note that the upside of the sale goes to the Chinese, not to, for example, to Venezuelan investors. Perverse, no?. Two, for Venezuela this is a no-brainer, PDVSA gives up dividends (investors will have to be paid somehow), but the Venezuelan Government will continue to charge royalties, taxes and windfall taxes on each barrel produced, which is where the big money really is.Three, the Chinese have realized a profit in their investment and can now plow the money back into Venezuela. Simply recirculate it, they can buy 40% of Petroanzoategui (formerly Petrozuata, fully owned by PDVSA) or they could buy 23.3% of Petromonagas (formerly Cerro Negro, where BP has a small stake). Then, they can turn around and sell these in the Hong Kong Stock Exchange.
And they can take their money and their profits or whatever they sell their shares for and plow it back into Venezuelan oil fields.
But more importantly, PDVSA has found a way to raise money for the new projects, which are not producing yet and the Chinese to establish how much they will be worth when producing, a nice way to know your return in investment ahead of the project. After all, a barrel of improved oil from any of these projects is worth roughly the same in all of them. The Chinese get some money back, likely have clauses that the oil from new projects will be shipped exclusively to China and more importantly, they can sell their stakes in the new projects once they are fully functioning too.
And in a virtuous circle, an almost pyramid, as long as people need oil, they can invest the money in ever new projects in Venezuela’s heavy oil fields. The much-hated markets will provide the endless funding, like this, as long as it is profitable:
You must read the whole post.
Remember, as oil prices rise and the Keystone pipeline cancellation benefits Venezuela, this will matter to us.