China in Latin America

Cuba: foreign investment law takes effect

Cuba's new Foreign Investment Law went into effect on June 28, as was planned when the National Assembly of Popular Power passed the measure in March. The government is hoping to generate some $2.5 billion in investment each year under the law, which cuts tax rates for foreign investors from 30% to 15% and guarantees that most foreign-owned companies will be exempt from expropriation. Investment is expected to be focused on light industry, packaging, chemicals, iron and steel, building materials, logistics and pharmaceuticals; much of it will go to the Mariel port, 40 km west of Havana, which is being developed as a major "free trade zone." The government is currently studying 23 proposals for projects from Brazil, China, Spain, France, Italy, the Netherlands and Russia. The new law doesn't allow for private Cuban citizens to invest, and Cubans will work for the foreign companies through state-owned employment companies, not directly. (La Jornada, Mexico, June 29, from DPA, AFP, Prensa Latina; Global Post, June 29, from Xinhua)

Mexico: more narco-mineral exports seized

Mexican authorities on May 1 announced the seizure of a ship carrying 68,000 tons of illegal iron ore bound for China—hailed as the latest blow in a crackdown on the contraband mineral sideline by the Knights Templar drug cartel. Federal police were apparently tipped off by an anonymous phone call after the ship left Lazaro Cárdenas, the Pacific port in conflicted Michoacán state. Authorities detained the ship, the Jian Hua, off Manzanillo, the next major port up the coast, in neighboring Colima state. The ship's crew produced documents showing it had authorization to transport the iron ore. But authoriites said the paperwork listed a legal mine that was not the actual source of the contraband ore. The company operating the ship, China's Fujian Huarong Marine, has been given one month to prove to authorities that the ore was extracted legally. Mexican authorities say they have seized more than 200,000 tons of illegal iron ore so far this year, most of it headed for China.

Rival trade pacts vie for Pacific hegemony

In a move being openly portrayed as part of a race with the US-backed Trans-Pacific Partnership (TPP) for hegemony in the Asia-Pacific region, China has set up a working group to study the feasibility of a Free Trade Area of the Asia Pacific (FTAAP). The proposal comes ahead of a meeting in May of trade ministers from the Asia Pacific Economic Cooperation (APEC) forum, which China will host. Wang Shouwen, an assistant commerce minister, assured: "We think there will be no conflict between the FTAAP and the region's other FTAs under discussion." But reports note that the news comes just as progress of the TPP has snagged over Japanese insistence on protecting its agricultural and automotive sectors. Chinese President Xi Jinping in October said at the APEC business forum in Indonesia that Beijing will "commit itself to building a trans-Pacific regional cooperation framework that benefits all parties"—an obvious veiled criticism of the TPP. (Tax News, May 5; AFP, April 30)

Michoacán crackdown on narco-mineral nexus

Mexican authorities on March 4 announced the seizure of 119,000 tons of iron ore—with an estimated value of $15.4 million—along with 124 bulldozers, backhoes and trucks at Michoacán's Pacific seaport of Lázaro Cardenas, following tips about drug cartels exporting black-market ore to China. More than 400 federal police and military troops were involved in the coordinated raids on 11 processing facilities in the port city. Six Chinese workers at the sites were arrested, apparently on immigration charges. The federal security commissioner for Michoacán, Alfredo Castillo, told Periódico Digital that the ore is being tested to determine which mines it came from in order to crack down on the operation. In November 2013, the Mexican Navy took control of Lázaro Cardenas to cut off illicit exports for the Knights Templar drug cartel. (Metal Miner, March 7; Mining.com, Port Technology, March 4)

Panama, Nicaragua canal plans stalled

Construction of a interoceanic canal in Nicaragua has been delayed by a year and will "probably" begin in 2015. The head of the canal authority, Manuel Coronel Kautz, announced Jan. 4 that more time is needed to carry out feasibility studies and choose a route. President Daniel Ortega, who promotes the project as key to Nicaragua's "economic independence," had projected construction to start in May 2014. (BBC News, Jan. 4) The setback comes as Chinese workers brought in by HK Nicaragua Canal Development Investment Co Ltd are swelling the population of Brito, a small town projected as the canal's Pacific terminus, in Rivas department. (IBT, Dec. 12)

Panama ups ante in Nicaragua canal race

The current expansion of the Panama Canal will allow close to 90% of the world's 370-vessel liquified natural gas (LNG) fleet to pass through by 2015, the Panama Canal Authority announced Oct. 30. Currently the canal can accommodate only 8.6% of the global LNG fleet. Voyages to Asia from the US will cost 24% less than longer routes, according to the authority. The US, now the world's top natural gas producer due to extraction from shale rock, is projected to  become the third-largest LNG exporter by 2020. Excavation to double the Panama Canal's capacity, which began in 2007, is said to be 64% complete. (Bloomberg, Nov. 4; Platts, Oct. 30; IBT, Sept. 20)

Bolivia ready for nuclear power: Evo Morales

Bolivia's President Evo Morales said Oct. 28 that his country has achieved the conditions to obtain nuclear power for "pacific ends," and that Argentina and France would help "with their knowledge." He made his comments at the opening of a "Hydrocarbon Sovereignty" conference in Tarija. In May, Bolivia and Argentina signed an accord on nuclear cooperation. In an obvious reference to the United States, Morales anticipated political obstacles, saying that "some countries have [nuclear energy] but don't want to let others."

Brazil: protesters target oil auction, transit fare

Hundreds of Brazilian unionists, teachers, students and leftists held a militant demonstration outside the Windsor Hotel in Rio Janeiro's Barra da Tijuca neighborhood on Oct. 21 to protest an auction being held there for rights to develop the Libra oilfield in the Bay of Santos. Denouncing the auction as a partial privatization of the country's largest source of petroleum, the demonstrators attempted to invade the hotel, confronting some 1,100 soldiers backed by agents of the National Security Force, and the federal, civil and militarized police. Protesters, some of them masked Black Bloc activists, fought with the agents, who responded with tear gas and rubber bullets. At least six people were injured, and a vehicle belonging to the Rede Record television network was set on fire.

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