Double Handshake

You may remember my sneering at the phrase describing Latin America as “the US’s backyard” a year ago. Well, now, courtesy of a recent Bloomberg article, there’s now some competition. The story is officially about Hu Jintao’s current visit to Brazil, but it’s really a News Story that we shall undoubtedly come to loathe in the coming years: BRIC-clashes. The story has some truly venomous interview quotes describing the high-level meeting as “sleeping with the enemy” and comparing China’s trade with Brazil to Portuguese colonialism in the 17th and 18th centuries. Most importantly, we get lots of territorializing.

When Brazilian President Luiz Inacio Lula da Silva hosts his Chinese counterpart today, he will welcome a leader whose economy is growing faster than his own — and whose exporters are outstripping Brazil in its own backyard.

So, Latin America is Brazil’s backyard. Well, that’s a nice twist on the usual “US’s backyard” at least. Then again, if  you’re being “outstripped” in your own backyard how long can it really stay yours? I wondered. This was cleared up later in the article:

“The world is China’s backyard and Brazilians shouldn’t be so hyped up about it,” Jim O’Neill, London-based chief global economist for Goldman Sachs Group Inc, said in an interview. “There’s a natural symbiosis in trade between the two countries despite Brazil’s legitimate desire to be a manufacturing powerhouse.”

I read this. Then, I read it again. It still doesn’t make total sense to me. I’m not sure if this is a case of sloppy editing, if he was quoted out of context or if Jim O’Neil (who coined the term BRIC in 2001, the article points out) was just speaking bombastically without meaning. I’m guessing O’Neil was arguing that since China exports more goods to other Latin American countries, Brazil “shouldn’t be so hyped about it” because it is no different than any other country whose exporters are being undermined by the Chinese.

Trouble is, the paragraphs leading up to the quote are about China-Brazil trade and investment. Also, the “symbiosis” second half of the quote seems to be about the dynamic only between the two countries – ie. Brazil produces oil and China consumes it, etc. This reading makes sense if you remove the bit about “the world is China’s backyard” first. In other words, “Don’t get worked up Brazil, in fact your trade relationship with China is largely symbiotic.”

But, what about the message: “Relax, Brazil, because the world is China’s backyard and you have a symbiotic trade relationship with it,” makes any sense – logically, geographically or economically? What am I missing?

Well, since DH cannot be anymore “harmonized” in China than it already is, I thought I’d offer a quick update on the “Amazon’s Tiananmen,” a label that’s been used to describe the violent clashes between indigenous Indians and Peruvian police in June over land use in Peru’s Amazon jungle. The tensions bubbled over three months ago, as Peru’s government continued opening up more areas of the country for oil and mineral exploration without consulting the local inhabitants. All in all, around thirty police officers and protesters were killed and more than 200 were injured.

When I first wrote about the clashes in the days that followed, I questioned the “Tiananmen” comparison. Aside from the timing (happening in early June, around the time of the 20-year anniversary of the China protests) and easily simplified narrative (oppressive government cracking down on its own people), I didn’t find a lot of similarity between the two protests.

One thing that I did get wrong in that earlier post, however, was the amount of media coverage Peru’s protesters got. I had rashly predicted that the incident would not capture international attention like China’s protesters got twenty years previously. Yet, in the weeks that followed Peru’s clashes, the incident made front-page headlines worldwide. Some of these news sources jumped on the “Amazon’s Tiananmen” label, while most did not.

Regardless, mounting international pressure and Lima’s backtracking culminated in the apology and resignation of the country’s prime minister Yedude Simon and congress’s repealing some of the laws granting wanton commercial development in tribal areas. This is not to say that all foreign development has stopped in the area, but I submit that the protests did have a major impact in Lima, something I would not have predicted had you asked me in June.

So, what then of the “Tiananmen” label? Survivor International, a British NGO, whose director Stephen Corry coined the term as far as I can tell, is still using it. Last week, Survivor published another indictment of Peru’s government in the 100 days that followed the “Amazon’s Tiananmen” and called for an independent investigation of what happened really happened in June.

But while China’s Tiananmen legacy inside the country is hushed at best and forgotten at worst, it seems to me that the Peru’s “Tiananmen” stands to be held up by indiginous groups as a major (if bloodied) victory, given Lima’s repentance over the incident. Would anyone in participating in the 1989 demonstrations claim the same?

Taiwan’s president Ma Ying-jeou heads to Central American this week for visits to three of the island’s remaining diplomatic allies in the region. Ma is expected to land in Panama on Wednesday for the presidential inauguration of Ricardo Martinelli and then spend the rest of the week splitting time in Nicaragua and Honduras. All three countries, along with twenty other nations worldwide, still recognize Taiwan instead of the PRC as their diplomatic partner.

Not especially good timing for a visit to Honduras, to say the least. A military coup on Sunday exiled president Manuel Zeyala, still in his pajamas, to Costa Rica. Electricity has been barely functional in Tegucigalpa over the past few days, and Zeyala ally Hugo Chavez has put his country’s armed forces on alert. Surprisingly, as of yesterday afternoon, Taiwan’s leadership has said Ma’s itinerary hasn’t changed despite “tensions” in Honduras. He is still planning on signing a joint communique on bilateral cooperation with Zeyala. Don’t hold your breath on this one. — In fact, as I am set to publish this post, here comes news that Ma has indeed canceled the Honduras portion of his trip.

But beyond the Honduras quagmire, there seems to be a new dynamic at play between Taiwan and the PRC in their “chequebook war” for influence in Central America. The Economist has more:

SINCE he took office in May last year, Ma Ying-jeou, Taiwan’s president, has presented himself as a peacemaker, seeking to ease tensions with China. This conciliatory approach has led to the first regular cross-strait flights, the opening of Taiwan to Chinese tourists and investors, and the attendance by a delegation from Taiwan as observers at the United Nations’ World Health Assembly in May, for the first time since China took Taiwan’s UN seat in 1971. Now, Mr Ma told The Economist this week, he believes China has even adopted the surprising policy of refusing requests from countries that recognise Taiwan to switch their diplomatic ties to China instead.

This is scoop is both astonishing and head-scratching. Given the above context, the article seems to suggest that the PRC is offering a “truce” (meaning it will stop poaching Taiwan’s diplomatic allies) as a something of a goodwill gesture toward the island. Officially, China strongly opposes any country having diplomatic relations with Taiwan and has spent billions in investment projects and aid to ensure those countries recognize Beijing over Taipei. Over the last twenty years, there’s been no question which side has overwhelmingly been winning this chequebook war.

So, why would China, the unequivocal “winner,” now refuse requests from countries hoping to switch ties from Taipei to Beijing, as Ma claims it is? Is it goodwill toward Taiwan, or something else? It indeed might be that the warming Beijing-Taipei ties mentioned in the above article incline China to goodwill gestures such as these. Certainly having good relations with Taiwan is a much higher priority for Beijing’s leadership than its relationship with any Central American country. Comments from US Secretary of State Hillary Clinton about China’s “disturbing” new presence in Latin America may have also factored into Beijing laying low in the region for awhile.

Whatever the reason, China’s goodwill “truce” in Central America may explain the case of El Salvador. When Mauricio Funes won El Salvador’s presidential election in March, he vowed to switch ties from Taiwan to the PRC upon taking office on June 1. Then, a strange thing happened. At his inauguration, Funes changed his mind. “On the basis of the long friendship and cooperation between the two countries, I promise to maintain diplomatic relations with Taiwan,” reported the Taiwan News. It may have been that Funes had a sudden change of heart, but most likely, China’s leadership put him off for awhile. Panama, whose whose president-elect is also rumored to favor switching ties to Beijing, may find itself in the same position as El Salvador, playing the waiting game until it gets the green light from Beijing.

The China-Brazil trade connection has made headlines this past month as China became the South American country’s top trade partner for the month for April, and the two countries said they were looking into making some trade deals with yuan and reals instead of US dollars. Then, Brazilian President Luiz Inacio Lula da Silva visited Beijing it what was being billed as a meeting between players in the “new economic order.” So, did meeting live up to expectations? Not quite. A reality check on the flurry of China-Brazilian news comes our way from the Global Post (via the Huffington Post) Wednesday.

Seth Kugal notes that though trade volumes are indeed increasing, the variety is not. Raw commodities like iron ore and soya are still far and away the most important facet of the relationship. And this doesn’t look to change anytime soon, despite Lula’s best efforts. A major priority for Lula on his recent trip to Beijing was to diversify his country’s exports beyond raw resources.

Lula’s visit to China was in part portrayed here as a meeting of giants. “No economic discussion is possible that does not take into account China, Brazil, India and Russia,” he boasted while there, and upon his return declared it the most successful of his foreign trips. But all signs pointed to the visit not meeting expectations, at least in the short term. It broke little new ground and largely saw the signing of deals that had been virtually concluded, most notably a $10 billion loan from China to the Brazilian state oil company, Petrobras, and an agreement to allow Brazilian chicken into China.

Other efforts failed: pork exports are still halted, and Brazilian textile industry leaders were unable to squeeze any voluntary reductions in exports out of the Chinese, whose imports have flooded the Brazilian market this year. Efforts to jump-start a stalled 45 plane contract between Embraer and the Chinese were unsuccessful. The trip was shortened to three from five days, and several events were canceled.

“Lula comes home empty-handed from Beijing,” according to a Folha de Sao Paulo newspaper editorial, “without having advanced the objected to diversify bilateral trade.”

And his thorn in Lula’s side raises a very important point for most Latin American economies’ trade with China: What can they offer China in addition to natural resources? Given China’s manufacturing competitiveness, is Latin America doomed to the same role it played for the Spanish, British and US throughout history, to export their resources (and lion’s share of the profits) to be processed abroad?

“What we are doing hasn’t worked very well and in fact, if you look at the gains, particularly in Latin American, that Iran is making and China is making, it is quite disturbing … They are building very strong economic and political connections with a lot these leaders. I don’t think that is in our interests … I have to say that I don’t think – in today’s world that is a multipolar world where we are competing for attention and relationships with at least the Russians, the Chinese, the Iranians – that it is in our interests to turn our backs on countries in our own hemisphere.”

Words shared by Secretary of State Hillary Clinton at a town hall meeting in Washington last Friday. She went on to criticize the Bush administration’s failed attempts to isolate anti-US leaders in the region. To compensate, she said, this administration must engage with Latin American leaders – especially with ones we don’t like, like Venezuela’s Hugo Chavez and Bolivia’s Evo Morales – if the US wishes to remain a relevant power in the region.

Now, while I don’t think the above sound byte indicates anything as drastic as a New Cold War over the ideological future of Latin America, I do find the logic “quite disturbing.” A few thoughts:

I fully understand that it is precisely Secretary Clinton’s job to push her country’s political and economic agenda abroad, but I don’t think that makes foreign countries doing the same thing “disturbing.” We don’t hear much from the State Department when China, Russia and Iran make political and economic inroads in their respective neighboring countries. Although it was unsaid by Clinton (and feel free voice disagreement below), I think what is implied here is the chestnut about Latin America traditionally being in the US’s “sphere of influence.” The murky trio: China, Russia and Iran are suddenly on America’s doorstep, and we haven’t approved it.

First off, let me try to add a quick non-State Department perspective. There is no quicker way to raise the ire of someone in Latin America than to describe the region as “America’s backyard.” The paternalism implied by this Monroe Doctrine/Roosevelt Corollary-derived phrase really does not go over well. On top of this, despite the US’s enormous influence in region through decades of political and economic intervention, Latin America today is not the United States’ backyard anymore than Africa is the backyard of Europe. President Barack Obama kind of recognized this with his talk of a “new era” in relations between US and Latin America at the Summit of Americas last month, saying “there are no senior of junior partners in the Americas.”

If, then, the US follows Clinton’s calls for the US to re-engage with certain countries in Latin America (a great idea, as far as I’m concerned), it should NOT be in some kind of belief that doing so will prevent these countries from pursuing diplomatic, economic and, yes, military ties with China and other countries of the world. US negligence in Latin America during the Bush years did push countries toward China, but China was coming anyway. And its presence, however “disturbing,” is here to stay (and grow). The State Department returning to Caracas yelling “hi, remember us?” is not going to change that fact.

Clinton is right to point out that the US is “competing for attention and relationships” in Latin America, but this competition is not a zero-sum game. Just as fully developed nations across the planet seek to diversify their economic and diplomatic channels, Latin American countries are after the same thing.

Second point. I won’t pretend that I’m privy to anywhere near the intelligence info that Ms. Clinton is, but I feel confident enough to take issue with her line about “they are building very strong economic and political connections with a lot these leaders. I don’t think that is in our interests.”

Economically, yes, China’s rise in Latin America creates competition for US interests there. Yes, US companies must be fitter to survive in Latin America than before China arrived on the scene. Is competition a bad thing? Aren’t fostering adaptability and wealth creation (both in China and Latin America) ultimately positives for the US, in a global economy?

Politically, I think China’s presence in Latin America fundamentally differs from countries like Iran, who I peg as likely having a true anti-US agenda in Latin America. For all the “socialist solidarity” rhetoric between Beijing and Caracas (generally emanating from Caracas), the word “oil” appears in every news article I’ve read about China and Venezuela. China’s surging economic prominence in the region means a stronger political presence by default, I don’t see Hu Jintao staying up late into the night dreaming up ways to undermine the US’s presence in Latin America.

Image: CNN

Chinese-Mexican relations took a few shots on the chin over the weekend over the Asian country’s dealing with the Swine Flu threat. In China, where the memory of SARS looms large, Mexican citizens have been quarantined based on nationality and flights between the countries have been suspended. Mexican Foreign Minister Patricia Espinosa criticized China for what she called a discriminatory quarantine set up in Hong Kong as well.

I was off gallivanting in Trujillo, in Northern Peru this weekend, and am only now getting caught up to speed. Luckily, the venerable James Fallows has followed the story and has predictably added a few great insights. He relays a Wall Street Journal report filed over the weekend of Mexican citizens in Beijing also forced into quarantine:

According to accounts from Mexicans in the hotel, Mexican travelers arriving on various flights from Mexico and the U.S. were singled out by health officials who boarded the aircraft wearing white protective suits, masks and rubber gloves. They led away Mexican passport holders. Several travelers said Chinese television camera crews surprised them at the doors of their aircraft as they emerged. They said the filming continued through the windows of an isolation ward at the Beijing Ditan infectious diseases hospital.

“We felt like we were in a zoo,” said Angel Yamil Silum, a 27-year-old business student, who arrived in Beijing with his girlfriend Saturday en route to Bangkok for a holiday, and ended up at Ditan and then the Guo Men Hotel.

I think the above quote best captures the real danger of this situation: How the detainees were detained. Families were paraded out of airplanes as fellow passengers openly gawked. Business men were woken up with flashlights from their hotel beds. The conditions of the hotels used for quarantines have been described as “fairly rundown,” serving such appetizing meals as this. John Pomfret of The Washington Post wonders whether or not China would have treated people from developed countries in the same way.

I think most reasonable people are willing to put up with some amount of discomfort and illogic (ie. detainment based on one’s passport) in the face of an unfamiliar epidemic. Certainly no one would expect a stay in the Four Seasons during a quarantine, but can’t China do a little better than this? If SARS taught the country anything, shouldn’t it have been how to quarantine someone with an amount of open communication and decency?

Stop press: Just as I was set to publish this, I came across this dispatch from the Metropark Hotel in Hong Kong (quarantine site). In fairness, it looks like some of the conditions are improving there. Let’s hope they continue to do so.

Image: The Daily Mail

Former Peruvian president Alberto Fujimori was handed a 25-year jail sentence yesterday for his role in a handful of killings and kidnappings that took place during his time in office. The ruling came down from a three-judge panel around 9:30am, the culmination of an epic 15-month trial. The 70-year-old Fujimori said he will appeal the decision.

Fujimori, who was president from 1990 to 2000, remains an polarizing figure in Peru. One poll released Monday found 64% of Peruvians believe he was guilty of human rights crimes, while 72% believe he is guilty of corruption. When most people describe Fujimori as “guilty” or “innocent,” however, it has less to do with the specific facts of the case and more to do with offering judgment on the Fujimori years as a whole. The real polarizing question is: Did Fujimori go too far or did Peru’s chaos justify his actions?

The answer from abroad is and has been clear. Fujimori began drawing the ire of human rights groups as early as 1991, during his heavy-handed campaign to wipe out the Shining Path. Terrorists and innocents were executed without trial. He dissolved congress and the judiciary in 1992 and re-wrote the constitution in 1993 to allow himself a second five-year term.

All of this did not help his popularity among democracy-loving nations. Within the country, there remains a big rural/urban divide with comes to the Fujimori issue – it depends on how the 1990s treated you. Nearly all the Limeans I’ve asked come down on him hard. “Asshole,” says the bus driver. “My brother was thrown in jail as a terrorist in 1983,” says the woman buying a newspaper. “He should die in jail,” says the restaurant owner. Fancy eateries in the city’s Miraflores district sell post cards with a cartoon Fujimori, in prison-stripes, getting kicked to the slammer.

In the countryside, the story is different. Here, where the Shining Path threat was much more palpable and economic stability is needed for outright survival, Fujimori remains popular. In countless villages, crumbling brick houses have “Fujimori Innocente” painted in red and white letters, usually alongside “Keiko” – the name of Fujimori’s 33-year-old daughter, who is a popular congresswoman. Keiko Fujimori has said she will pardon her father of all crimes if she is elected president when she runs in 2011.

The most remote place I’ve heard Fujimori’s name come up was on a trip to the floating islands on Lake Titicaca, where Peru borders Bolivia. About 250 people still live on the islands, which are handmade from floating totora reeds. Nearly everything on the islands – the houses, boats, kitchen, tools – are made from the reeds. In the 1990s,  Fujimori visited the islands twice, we were told. The president’s legacy here is not quashing terrorism or inviting foreign investment, but rather electricity. Fujimori and his people donated solar panels to the islands on their visit, which still stand today.

“Fujimori cares about us here. That is why we poor people support him,” our host Roberto said.

“El Chino”

Though his parents were Japanese immigrants to Peru, Fujimori’s nickname is “el Chino” or “the Chinaman.” “Chino” can be used either affectionately or derrogatively, serving as a catch-all for “East Asian.” Fujimori himself is said to have liked the moniker, though as a dark horse presidential candidate in 1989, he likely didn’t have much electoral room to dislike it too much. It certainly is catchier than a nickname like “la segunda generación japonés.”

More importantly, “chino” is a term loaded with associations for most Peruvians, many of them positive. “Chinos” are spendthrift shop owners, hard-working restaurant chefs. They have also been in Peru for 150 years. “Chinos” are just as legitimate to run for office as anyone else. Take the image of the “chinito de la esquina” (the little Chinese man on the corner) for instance. Here’s one recollection of growing up with the “Chinaman on the corner” from a Peruvian now in Australia. Translated (roughly):

Almost every neighborhood (in Lima) had its “Chinese Corner,” each with a picturesque character. The characteristics and habits of all of them were almost similar. The Chinaman at the corner could be identified by having a cigar in his mouth, a pencil in his ear, the cats, his credit book, scooping rice and sugar with khaki paper without spilling even one grain.

In reality, Fujimori was no shop owner nor chifa chef, but cultivating the “chino” image was especially useful given the time he arrived on the national scene in the late 1980s, Peru’s economy was in shambles with an annual inflation rate of more than 10,000% in 1990. Trust the Chinaman, he’s got his credit book.

Fujimori has been depicted many other ways as well. I’ve seen him as Christ, Satan, Blind Justice, a jail bird and a samurai, among other things.

Barrios Altos, then and now

Barrios Altos is a poor and run-down district of Lima, east of the city’s center. On the night of November 3, 1991, members of the Grupo Colina – members of the Peruvian Armed Forces – killed fifteen people at a chicken barbecue suspected of being Shining Path rebels. The Colina were dressed completely in black and sprayed the neighborhood gathering for about two minutes. This incident, and Fujimori’s role it, was at the heart of the 15-month trial.

Yesterday afternoon, five hours after the sentencing, I found myself walking in Barrios Altos, a poor and run-down district of Lima, east of the city’s center. Narrow, treeless streets baking in the sun, graffiti, peeling paint and piles of trash in the street. I walked past Jirón Huanta, the site of the massacre (which I didn’t realize at the time).

Two blocks east of the site, at Plaza Buenos Aires, I examining a historic plaque when I was surrounded by six guys in their twenties. I knew immediately what was going to happen, and it only took twenty seconds. The group bolted down the residential alley. Relieved of money, camera, phone, voice recorder and backpack, I walked back where I came from to find the police. Regardless of who I talked to in the police station over the next few hours, the first response was always the same: “Well what were you doing there in the first place? Alone? Don’t you know it’s dangerous?”

Yes, then and now.

Images: JournalPeru, DustEyes blog

El Salvador has a new president-elect, as of last Sunday. Mauricio Funes, of the left-wing Farabundo Marti National Liberation Front (FMLN), won a narrow victory over Rodrigo Ávila of the right-wing ARENA party. The Washington Post tells us what to expect:

Among other things, he has said that he will respect private property, preserve El Salvador’s free-trade agreements and its use of the dollar as its currency, and seek to preserve close relations with the United States. As his political model, he has cited not Mr. Chávez, but Brazilian President Luiz Inácio Lula da Silva, who has led his country leftward while honoring democracy and the rule of law.

Making fewer headlines outside the US, however: Funes has promised to switch his country’s diplomatic ties from Taiwan to the PRC when he takes office June 1. Currently, El Salvador is one of the island’s 23 remaining diplomatic allies. Despite Taiwanese president Ma Ying-jeou’s calls for a “diplmatic truce” with the PRC over stealing each other’s diplomatic partners, many countries have switched over to the PRC for economic reasons.

Though these reasons are usually enough to convince most countries to switch to the PRC, in the case of El Salvador, there are other reasons as well. From the Taipei Times article linked above:

The FMLN has never forgotten that ARENA founder Roberto D’Aubuisson, who organized and led the death squads which tortured and killed thousands of civilians and who directly ordered the assassination of Archbishop of San Salvador Monsignor Oscar Romero on March 24, 1980 that sparked the civil war, was trained in “police techniques” in Taiwan.

Moreover, unlike Nicaragua, Guatemala or Paraguay, Taiwan has been unable to develop solid political dialogue with the FMLN even under DPP President Chen Shui-bian.

So, while Taiwan has been able to maintain ties with Nicaragua, Guatemala and Paraguay as their governments have taken a left-ward turn, El Salvador will be a much mightier task.

Is there, then, any course of action for Taiwan to stop this from happening? Could the island salvage “dual recognition”, meaning that El Salvador would recognize both the PRC and Taiwan? Not likely. When Francisco Ou, Taiwan’s foreign minister in El Salvador, told reporters the island would indeed be willing to accept this scenario, he was was quickly overrulled by President Ma himself, saying dual recognition “unrealistic.” Beijing has routinely demanded that its diplomatic partners recognize the “One China” principle.

It seems that Ma is wary of ruffling too many feathers in Beijing over El Salvador, even if it means losing one more country from its column.

Image: Tim’s El Salvador Blog

The Jamestown Foundation, a Washington DC think tank , has published a very good backgrounder on China and Latin America by R. Evan Ellis. Ellis is an associate with Booz Allen Hamilton and author of the forthcoming book China in Latin America: The Whats and Wherefores, to be published next month. Read his 2008 statement before the US House Committee on Foreign Affairs on China and Latin America for more proof that the guy knows his stuff.

The article begins in 2004, with Hu Jintao’s visit to Santiago, Chile for that year’s Asia-Pacific Economic Cooperation Forum (APEC) summit. Since then, China has burst onto the Latin American scene: bilateral trade has increased to US$102 billion by the end of 2007 from US$10 billion in 2000, three free trade agreements have been signed, and multi-billion dollar Chinese investment deals in commodities are now common place – as have official government visits between the two regions. China has wooed countries like Costa Rica to switch diplomatic ties away from Taiwan, and it has joined the Inter-American Development Bank. Military ties have quietly grown as well.

The article rightly points out that China and Latin America’s relationship has matured beyond simply commodities trade. Latin America has been and will remain a growing destination of Chinese manufactured goods.

As factories in the PRC produced more items and Latin American traders became more sophisticated in dealing with those factories, China has complimented its offering of labor-intensive manufactured goods such as clothing, toys and footwear with a broad selection of Chinese motorcycles, cars, heavy machinery, appliances, and consumer electronics.

But, when it comes to Latin American goods entering the Chinese market, things seem to be going less-than-swimmingly. Latin America’s retailers face the same trade balance headaches that foreign countries have had with China since the Opium Wars: What can we sell China in return for all that we buy?

Beyond commodities, select Latin American companies such as Grupo Modelo, FEMSA and GRUMA have made some progress building markets in the PRC, selling recognized brand name products to the growing Chinese middle class … Nonetheless those governments and producers have discovered that despite such efforts, traditional products such as coffee and fruits have not sold well in the PRC. In addition to issues of Chinese tastes, these perishable products and the labor required to harvest them makes them uncompetitive against closer, lower-cost producers such as the Philippines.

I’m a bit surprised to hear that the makers of Corona, Negra Modelo, Tecate and Dos Equis are making “some progress” in China given their products really suit a type of food largely absent on the mainland (ie. Mexican). On top of that, I’ll add that a friend/restaurant owner in Shanghai once told me that buying fake Coronas cost him about a third the price as real ones. His advice: Save your money and order Tsingtaos, because you never know.

As mentioned before, a number of top-ranking Chinese officials are currently on goodwill tours in Latin America. Thus far, declarations for “strengthening cooperation” and “boosting friendships” abound. Vice President / President-in-waiting Xi Jinping is now in Venezuela, having already made his way through Mexico, Jamaica and Colombia. Yesterday, he addressed President Hugo Chavez and Venezuelan entrepreneurs and “welcomed” Latin America participation in the 2010 Shanghai Expo.

The global recession has cast a dark shadow on the Expo, which is wildly anticipated within China. Last week, rumors started that the US may skip the Expo entirely as organizers are struggling to raise the US$65 million needed for a pavilion. The UK has recently reshuffled its “Expo Task Force,” and has yet to break ground on its pavilion.

Of course, things are different for most Latin American countries. China has already told Colombia and others that it “would try its best to meet [their] needs including both financially and technologically (sic).” Other Latin American and Caribbean countries are building joint pavilions instead of individually. El Salvador and Costa Rica, for example, are part of a nine-country Expo bloc. Ten countries in the Caribbean have also banded together for a joint pavilion.

Still, there are vows of participation and then there are official contracts. Many of the countries above, including Venezuela as of last October, have yet to officially sign on the dotted line or appoint a commissioner general to oversee development.

Xi’s Expo “welcome” yesterday may have been less of a friendly gesture and more of a reminder that, recession or not, participation is still expected.

Image: showchina.org