Q: What do you have planned for the Peruvian pavilion?
A: The restaurant will be a representation of the culinary traditions in Peru now. Peru is now the most trendy, most fashionable food in Latin America at the present moment. What the Spanish are in Europe, the Peruvians now are in Latin America. In Spain, you have many famous chefs doing modern cuisine, and there is a similar situation in Peru in Latin America. All the winners of best restaurants of the year in Latin America for the last three or four years have been Peruvian restaurants. Peru has very rich influences from Africa, from China, from Japan, from Europe, from the Andes. The result is very interesting food. We have a huge coast, so we have a lot of seafood. So, a lot of food is based on that. So, the food we’re going to serve at the Expo is a combination of that. We’re starting with our national dish, ceviche.

Q: Are you planning on serving all the classic Peruvian dishes like ceviche, causa, lomo saltado, anticuchos?
A: Yes and no. We will use Peruvian ingredients, Peruvian flavors and Peruvian techniques, but served in a contemporary way. So, we will use rojoto or ajia marillo like before, but maybe we will make a foam from it. We will do a causa, but will add a contemporary twist on it. We will present it as it would be in a contemporary restaurant in Peru. In a trendy restaurant in Peru, you don’t eat what mama and papa cooked 20 years ago. I’m bringing over five young star chefs from Lima to Shanghai in the next two weeks, all Cordon Bleu-trained and who have been working with the best chefs in Peru. I went to Peru to handpick them. My good friend (well-known chef and restaurateur) Gaston Acurio introduced me to two young chefs from his restaurant Astrid & Gaston. (This is possible because) in Peru, chefs are very united, and we have a common goal, to promote Peruvian cuisine, to make it as well-known as Mexican food around the world. We believe our food is better than Mexican, but unfortunately Mexican food is more wide-spread, everybody knows it. The only way to do that is to help each other to promote where ever we can, and the Expo is a perfect opportunity.

I had a chance to bring these young chefs over to China and work for me for a couple years. They will live in China, and we will eventually have five-star chefs from Peru working in Shanghai for awhile.

Q: So, the five chefs will come for the Expo and stay in China afterward?
A: Yes, they’ll stay for a couple years. I want to use them as much as I can.

Q: Are you making changes to the menu to adapt to Chinese tastes or the market?
A: No, not really. At the Expo, I believe each countries’ restaurants want to demonstrate what happens and how food is from their home. Therefore, our food will be authentic. We have many dishes in Peru that are influenced from Chinese dishes in the past. Lomo Saltado is basically a stir fry of beef that Chinese brought with them to Peru 100 years ago and then added some Peruvian ingredients. Now it’s a classic Peruvian dish. Another dish is a sort of stir fried rice using Peruvian chilies with it and a lot of seafood. We’re going to make this fried rice Peruvian style. I know it’s going to be acceptable to the local market.

Q: Are you sourcing ingredients from China or importing from Peru?
A: The main ingredients are coming from China. We’re importing about 3,000 kilos of chiles, the corn, the potatoes and some other important ingredients. The meat and the vegetables are all coming from China.

Q: Are the logistics difficult? Have you had issues with poor quality on the China side?
A: I’m doing my own importing. I flew to Peru, found the suppliers and bought them and now it’s in the boat. I already have a few restaurants in China and already work with suppliers, so it’s all right. Today, the situation is much better than a few years ago. Now, the standards of products in China are now at a standard level.

Q: Is setting up a temporary restaurant much different than setting up a permanent restaurant?
A: If I hadn’t previously opened restaurants in Shanghai, then I would have big troubles. But now, I have everything. I already know how to set up places. I don’t have problems because I already have years doing this in China, but I believe I believe a lot of restauranteurs coming to China for the first time are having a hard time. I’ve been receieving phone calls from the other pavilions asking me to take over their pavilion restaurants. But I won’t do it because there are too many regulations for the Expo. So, we’ll do the Peruvian pavilion and that’s it.

Image: Shmag.cn

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?

News reports of the “soybean oil spat” concluded that the move was nothing but the latest governmental brinkmanship in an ongoing low-level trade dispute between the two countries. After all,  Argentina is currently carrying out an anti-dumping investigation on Chinese goods like textiles and steel pipes. Last year, President Kirchner imposed new import tariffs on Chinese manufacturers to stimulate “healthy competition” between cheap Chinese imports and local companies that have been undercut. In turn, China – which, let’s face it, wasn’t going endanger its petrol oil imports from Argentina – crimped soybean oil imports this month in retaliation.

It’s a compelling explanation, and I agree that it plays a role. But it doesn’t tell the whole story.

A less-reported angle to the China-Argentina soybean oil trade dynamic is the fact that China itself is dealing with a record stockpile of edible oil, not only soy oil, but palm oil and rapeseed oil as well. On top of this surplus, China has been busy stockpiling both domestic and imported soybeans, which it sources from the US and Brazil in addition to Argentina. China can then crush the beans in-country to make its own soy oil, an industry that is currently operating at just half its 94 million-tons-per-year capacity.

In other words, with so much edible oil already sloshing around China, its soy oil imports from Argentina might have been curtailed anyway.

Still, though China’s edible oil stockpile can soften the blow of halted Argentinan imports, it can’t come close to meeting domestic demand by itself. Even if the country does eventually ween itself off edible oil imports, Argentina will still be there to supply the raw commodity. From the Reuters report:

China has not clamped down on soybean imports from Argentina, from where it is estimated to have bought some 2 million tonnes for April-May delivery, as stopping beans would hurt its domestic crushing industry.

“They can’t touch soybeans because China has become too dependent on soy,” the Singapore-based trading manager said. “The factories will be shut if you restrict beans, but they can use bean oil to settle scores as they have enough stocks.”

Analysts and pundits are divided on how long the spat will last. I predict a prompt fizzle to the whole thing in the next few months as China works through its domestic supply. China and Argentina are the world’s biggest consumer and producer of soy oil respectively. The economic pressures are too great for this to get out of hand.

Image: Naturea2z.com

In an effort to clean out my DH story folder in one fell swoop, here are some recent developments I haven’t gotten around blogging about:

First and foremost, for anyone looking for a good China blog in Spanish, look no further than ZaiChina (h/t to Danwei for the heads up). Launched this month, ZaiChina seems to have a very good sense of life on the ground in Middle Kingdom. Article translations, book reviews and pop culture trend-tracking. Here’s hoping this promising blog keeps up the good work.

Way back in the aftermath of January’s earthquake in Haiti, ChinaHush (another great bridge blog) translated a story from Chinese newspaper Southern Weekend about a group of illegal Fujianese immigrants en route to the US who were caught on the island on their stop over. While not about Latin America per se, it’s a eye-opening read on the underworld of “snakeheads” and human cargo network that runs through Mexico and other LA countries as well.

China and Peru officially kicked off their free-trade agreement earlier this month. Officials expect bilateral trade to double to US$15 billion. I’ll keep looking for Peruvian “exports of fresh fruit like grapes, mangoes, citrus fruits and avocados,” on produce stands in Beijing. Meanwhile, China and Costa Rica are in the final approval phase of their own FTA.

There has also been some negative press on China’s economic impact in Latin America of late. The World Bank and International Development Bank said Latin America’s heavy reliance on China as a commodities buyer is full of risk and instability, and advised Latin American economies to diversify. Asia Times published a similarly themed piece last month on Brazil’s trade dealings with China. Brazil’s manufacturing companies have been hit hard by cheaper Chinese-made goods. Jose Augusto de Castro, vice president of the Brazilian Foreign Trade Association, went as far as to call Brazil’s growing trade relationship with China “a step backwards.”

For even more economy action, Latin Business Chronicle published a long, comprehensive look at China-Latin American trade and investment in 2010: Latin America: Year of the Panda?

There have been a few billion-dollar deals signed between state-owned companies as well. China’s largest utility company State Grid announced a 50-50 joint venture with Canadian mining company Quadra to develop copper mines in Chile. State Grid is the largest consumer of copper in the world, and the move gives it greater control over the raw material it desperately needs for power cables. Then, earlier this week, CNOOC, China’s largest off-shore oil company, said it would take a US$3.1 billion 50% stake in Argentinean energy firm Bridas Corp.

Finally, a bit of trivia. What percent of Peru’s current population has origins from China? Answer: 15%, which is the highest percentage of all Latin American countries. All it took was 160 years of immigration. Go figure.

Video: lafloripondio

The black numbers represent the month and day of the three earthquakes – ie. 5/12 Wenchuan quake, 1/12 Haiti quake, 2/27 Chile quake. The red characters are the place names – 汶川 = Wenchuan, 海地 = Haiti, 智利 = Chile. You can see that the row and column marked for each location read the same either way you read.

It’s unclear what “law” is really supposed to imply. Hecaitou himself says he finds the coincidence “interesting” but dismisses the would-be numerologists, arguing there have been hundreds of earthquakes over the past three years, and finding number patterns wouldn’t be difficult. I’ll add that had Chile’s earthquake struck anytime from February 20 through 28, the table above still “works.”

Nevertheless, number patterns are compelling stuff and easy to understand. I expect this “law” to linger in the Chinese blogosphere and media while Chile stays in the world’s news.

In December, the two countries’ state-owned oil and gas companies PetroChina and Petrobras signed an MOU to build ethanol production projects in Brazil. The project was specifically aimed at exporting ethanol from Brazil to China, though no numbers were given.

Was China getting more serious about developing its biofuels industries? Would Brazil, the world’s biggest ethanol success story, have a giant role to play? I smelled a scoop.

For Americans like myself, the word “ethanol” brings to mind the US’s controversial foray into corn ethanol production, which began in earnest about 10 years ago. I’m not too interested in rehashing the arguments and data for and against the corn ethanol industry in the US (though, file me under ‘naysayer’). However, Brazil’s sugarcane-based ethanol industry (second to the US by production but far more sustainable, carbon-efficient and wide-spread) is probably worth a paragraph, if not a glance at its Wikipedia page.

Brazil, with abundant land resources and heavy rainfall, is an ideal place for growing lots of sugarcane. It is grown sustainably and not on deforested Amazon land. Sugarcane’s higher sucrose content makes it much more efficient than corn, and government subsidies were phased out completely in the 1990s. Cars (92% of new ones) in Brazil run on a mix of ethanol and petrol. The system has been invested in and promoted for about 30 years. By pretty much all measures, it works.

China’s ethanol industry also has its roots in the 1970s and 1980s, from grain overproduction in certain years. With tons of rotting grain on their hands and no good way to store it, the authorities decided fermenting it and turning it into fuel was a feasible option. Things progressed slowly but steadily (China was even a net ethanol exporter in 2006) until five years ago when the use of food crops for ethanol was banned because of rising food prices and concerns over scarcity.

The same fuel-vs-food debate that made ethanol so contentious in the US had delivered a major blow to China’s industry.

I recently interviewed Rob Earley, an expert on biofuels in China for iCET, for my day job. He brought me up to speed on China’s present ethanol industry (and the serious structural challenges impeding its development). You can read the full interview here (need to first register for free). Here is the exchange relevant to the Brazil-China ethanol connection.

Q: As of the first of the year, China lowered its import tax on ethanol. Do you expect this move to affect the ethanol landscape in the country?

A: You have to look at the fundamental question: Why is China interested in biofuel? The answer, at least in my experience, is completely based on energy security. If they’re importing ethanol, it doesn’t improve their energy security greatly considering that the (world’s) supply of ethanol is probably more limited than the supply of oil at present. In terms of diversifying sources of energy, it’s not a bad thing. But realistically, the biggest source of ethanol is from sugarcane in Brazil, and if China and Brazil aren’t getting along, that supply gets cut off. Since there is no policy push for low carbon fuels in China right now, then there is no carbon rationale for using biofuels in China. I don’t think the import tax is going to make a big difference, but anything is possible.

So, this begs the question: Why do it, then? Earley said he couldn’t offer an explanation.

It’s worth remembering that China and Brazil are already closely intertwined when it comes to energy. Last May, China loaned Petrobras US$10 billion to secure a steady supply of oil. The Asian country also overtook the US as Brazil’s largest trading partner for the first time the month previous. Ethanol will probably never replace oil as a primary fuel source in China nor will it likely even surpass oil in importance in the China-Brazil trade relationship. However, it’s not impossible to imagine ethanol trade significantly changing the two countries’ current energy trade relationship (oil produced in Brazil, exported to China). Consider the following:

Diversifying energy sources – As Earley mentions above, it is in China’s interest to diversify its energy sources. Yes, importing ethanol from Brazil does not change China’s dependence on a foreign country for energy, but ethanol does offer much better price stability.

The table is set – The same energy giants (PetroChina and Petrobras) that are responsible for Brazil-China oil trade would be the ones taking on ethanol. Ramping up ethanol trade would not require new companies cutting in on entrenched state-owned interests. Ethanol would simply become a new stream of business for those already involved.

Oil already ties the two together – It’s true that China (and all countries) would rather not depend on foreign countries for energy, but the reality is China has little choice right now. Compared with China’s other oil suppliers (the Middle East, Russia, Central Asia, Africa, Venezuela), Brazil looks pretty good stability-wise. If importing ethanol from Brazil could displace some oil imports from, say, Sudan or Iran, wouldn’t this make China’s fuel portfolio a bit more stable, which is the stated goal?

The cars are a-comin’ – The number of cars on China’s roads is set to sky-rocket in the coming decade. If the country is to realize its goal of cutting energy intensity by 40-45% by 2020, it must keep vehicle emissions within reason. Costs for setting up the infrastructure for ethanol-fueled cars would be significant, but would pay for itself economically and environmentally.

Jump-starting things back home – China’s domestic ethanol industry is not dead, mind you. It’s just not a big priority right now. Working closer with Brazil on ethanol could result in China gaining the technology and experience necessary to revitalize its own ethanol industry, which is all but certain to miss its 2010 production target.

Image: Wired

The Venezuelan people are (rightly) afraid that even more serious inflation will set in. Many rushed out last week after the announcement to buy electronics and other durable goods that would hold their value. Merchants raise their prices as a result – the exact opposite effect a currency devaluation should have.

Chávez is not amused. “‘There is no reason for anybody to be raising prices,’ Chávez said Sunday on his national television show. He explained to listeners that the ‘bourgeois’ in Caracas society would plan price increases but that they would fail. ‘People, do not let them rob you,’ he said. ‘Denounce it,’” the Washington Post reported.

But if that approach doesn’t inspire a lot of confidence in the country’s stability, consider this idea:

A shipment of Chinese home appliances will be sold cheaply in Venezuelan government stores to stop speculation by retailers after the country’s currency was devalued last week, President Hugo Chavez said Wednesday.

“A boat is coming from China. It brings refrigerators, television sets and washing machines we’ll be selling at low prices, as we already do with food products in the Mercal chain,” Chavez said of the government-owned supermarkets opened in 2003.

A single appliance-laded boat from China? Well, that should do the trick for country of 28 million people.

This made me remember growing up in the US and occasionally hearing grownups say “if you dig a hole straight through the earth to the other side, you’d be in China.” This, I can confirm with this nifty Antipode Map, is not the case. America’s whole collective anitpode is out in the south Indian Ocean (exception: Hawaii – you’re in Botswana!)

But it turns out that China and Latin America have some serious antipodean matching going on. John at the great Sinosplice blog apparently figured this out three years ago:

So you can see that China mostly just overlaps with Argentina, and most countries don’t overlap with any land at all. According to another website, China gets these exciting antipodes match-ups:

1. Beijing – Bahia Blanca, Argentina
2. Taipei – Asuncion, Paraguay
3. Shanghai – Buenos Aires, Argentina
4. Wuhan – Cordoba, Argentina
5. Xi’an – Santiago, Chile

Some of them are give-or-take a few hundred kilometers according to the map but still cool approximations to know.

Back in October, I posted a snippet of a Shanghai Daily article relating to Chile’s pavilion preparation for this year’s Shanghai Expo:

At the Shanghai event next year, Chile will attract visitors with three special wells. People will be able to look into the wells in the pavilion in Shanghai to see scenes and hear the sounds of some Chilean cities on the opposite side of the earth.

It still sounds hokey, but I guess now more credible than the “digging a hole to China” silliness I thought of when I first heard about it – even if those scenes and sounds are technically coming from Argentina.

Image: Sinosplice

According to pro-bullfighting websites, bullfighter Manolo Sánchez made a deal with the local government of the Huairou District in Beijing (Peking) to build a bullring and a bull breeding farm close to the Chinese Wall, as part of a Spanish amusement park (also with tapas bars and flamenco shows).

…

In January, they want to import 100 bulls and 100 cows from Spain and they also want to start building the bullring. The bullring will be finished in October 2010 and will be inaugurated with two bullfights. From 2011, they want to organize 16 bullfights a year, 4 in June, 4 in July, 4 in August and 4 in September.

Wow. Where to start on this one?

It’s worth remembering that China has toyed with this idea before. In 2004, Beijing almost allowed the city’s Wild Animal Park to hold a fight, but eventually scrapped the idea. City council members complained that bullfighting was cruel and had “the potential to tarnish Beijing’s and China’s image” ahead of the Olympics.

However, that same year in October, Shanghai successfully held two days of bullfights. Organizers imported bulls from Mexico, matadors from Spain, and converted a city stadium into a bullring, spending US$605,000. Bulls were taunted and stabbed with spears, but not killed.

Not all fell under the spell of “a bullfight with a truly Spanish flavor.” The editorial board of China Daily called the event a “mistake.”

While animal protection and anti-violence is becoming more fashionable in society, Shanghai’s “bravery” in staging this kind of bloodsport betrays itself as one of China’s most modern cities.

Rather than a milestone in its bid to become a much-coveted international metropolis status – indeed, the bullfighting episode is more like a slap in the face.

Will this time be any different?

Worldwide, times are tough for the industry. Spain’s northeastern Catalonia region recently banned the sport, and other regions may soon follow suit. In Latin America, bullfighting can be found in Mexico, Colombia, Ecuador, Peru and Venezuela and may survive there a bit longer. Still, anti-bullfighting sentiment is on the rise in Latin America too. Many people see exporting the sport to China and other foreign countries as a last-ditch strategy to save a dying industry. Pro-fighting optimists may believe China to be bullfighting’s last great hope.

But don’t count on it. Organizations like CAS International are already circulating petitions and mobilizing efforts to stop the sport from coming to China. On top of that, it will only take one top cadre deciding there is something decidedly “uncivilized” about the bloodsport before this plan gets scuttled like the last. Don’t get me wrong, I think most Chinese could stomach the blood to watch for the “mystery” and “passion,” as this account can attest.

My guess is this project becomes something much more benign and tourism-friendly – more “Spanish amusement park” and less bullfighting. Bloodless “bullfighting demonstrations,” perhaps. Tourists dressed up as matadors. Tours of the stables and photos with the bulls. Chinese copies of Death in the Afternoon, plastic banderillas, magnets and other tchotchkes – these all seem likely.

An authentic bullfight in Huairou? Not so much.

Image: China Daily

Both Rey and Prime Minister Javier Velasquez were quick to dismiss any notion of a budding military arms race with arch-rival Chile. Times are sensitive given last month’s espionage controversy and 100-plus years of general bad blood stemming from a border dispute. However, the ministers did not mention what Peru’s leading newspaper La Republica reported recently: That in July, a Peruvian military delegation traveled to China to evaluate the MBT-2000 tank model. The result: The Peruvians were initially turned off by the MBT-2000 because they didn’t think it would be able to defeat the Chilean Leopard 24A.

Doesn’t exactly assuage fears.

Anyway, how do you go about closing an arms deal for a buyer on the fence, you may ask? From AP:

Rafael Rey told The Associated Press that the army is testing MBT-2000 tanks brought from China, but wants a better-equipped model of the tank. Peru showed the tanks in a parade on Tuesday.

Rey didn’t say how many tanks Peru would buy. The Lima newspaper La Republica reported that it plans to buy 80 to 120 tanks and has evaluated Chinese, German, Russian, Ukrainian and Polish models.

A parade! There’s a novel way to evaluate military hardware. Tank parades in Beijing during October’s National Day 60-year anniversary and now Chinese tank parades in “the US’s backyard”?

Cue US Congressional fear-mongering.