

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 08BEIJING4253, CHINA'S GROWING ECONOMIC RELATIONSHIP WITH LATIN
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08BEIJING4253.
VZCZCXRO3482
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #4253/01 3230952
ZNY CCCCC ZZH
O 180952Z NOV 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0920
INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
RUCNMER/MERCOSUR COLLECTIVE IMMEDIATE
RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE IMMEDIATE
RUEHPE/AMEMBASSY LIMA IMMEDIATE 0528
RUEHME/AMEMBASSY MEXICO IMMEDIATE 0543
RUEHSJ/AMEMBASSY SAN JOSE IMMEDIATE 0110
RUCPDOC/DEPT OF COMMERCE WASHDC IMMEDIATE
RUEAIIA/CIA WASHINGTON DC IMMEDIATE
C O N F I D E N T I A L SECTION 01 OF 04 BEIJING 004253
SIPDIS
E.O. 12958: DECL: 11/18/2018
TAGS: BR CN CS CU ECON ETRD MX PE PREL XM EINV
SUBJECT: CHINA'S GROWING ECONOMIC RELATIONSHIP WITH LATIN
AMERICA
Classified By: Classified by Robert S. Forden for reasons 1.4 (b) and (
d)
¶1. (C) Summary. Chinese President Hu Jintao,s November
16-20 visit to Latin America, which includes stops in Peru
for the APEC summit, Costa Rica, and Cuba, is intended to
strengthen China,s rapidly growing economic relations with
the region, according to Embassy contacts. To spur
further trade growth, China is looking to ink Free Trade
Agreements (FTAs) with Peru and Costa Rica, though these
FTAs will likely be narrow in scope. Hu will use his stop
in Costa Rica to emphasize China's commitment to the region
and demonstrate the benefits of diplomatic ties with the
mainland, sending a not so subtle signal to the remaining
states that maintain formal relations with
Taiwan. While Chinese investment in Latin America is
growing, contacts highlighted a range of challenges, such
as a disconnect between Chinese and Latin American
investment priorities and the lack of cultural
understanding among Chinese companies. Additionally, China
has struggled to address trade frictions, such as
anti-dumping suits and a lopsided trade balance with
Mexico. End Summary.
A Growing Economic Relationship
-------------------------------
¶2. (C) Contacts here described China-Latin American
relations as being at an all-time high and credit the
rapidly growing economic relationship with playing a large
role. (Note. Total China-Latin America trade in the first
eight months of 2008 reached $95.6 billion, according to
Chinese Customs Statistics, up 49% yoy. End note.) Peking
University Latin America specialist Dong Jingsheng said that
a common focus on economic development and shared values as
developing world partners underlie rapidly growing trade
and investment ties. In particular, China,s need for raw
materials complements Latin America,s need for Chinese
manufactured goods and provides a basis for continued
growth. Wu Hongying, Director of the Chinese Institute of
Contemporary International Relations, (CICIR) Division of
Latin American Studies, said that the economic component of
China-Latin America relations was the "most developed" and
had the most trust. China over the past few years has
benefited from the willingness of Latin American countries
to open up their markets.
¶3. (C) Several Latin American contacts described China as
an economic opportunity with tremendous growth potential.
Peru's Economic Counselor Jorge Chian told econoff that
China's "going global" policy provided an opportunity for
Peru to attract investment in the mining sector and utilize
local resources to finish products, helping Peru export
more value added goods. Costa Rica's Commercial Counselor
Carlos Martinez said Costa Rica was too small to expect
significant Chinese interest, but hoped China would view
Costa Rica as a platform to produce goods in Latin America
destined for the United States in order to take advantage
of the duty free treatment afforded such imports under the
United States-Central America/Dominican Republic Free Trade
Agreement (CAFTA-DR). Martinez added that Costa Rica hoped
to also take advantage of its position as the only Central
American country with formal diplomatic relations with
China to present itself as the best place in the region for
China to do business.
¶4. (C) Chinese scholars, however, were quick to point out
that economic ties with Latin America were growing from a
small base and had limited potential. (Note. Latin America
in the first eight months of 2008 accounted for only 2.9% of
China,s global trade, according to China,s trade
statistics.
End Note.) Peking University,s Dong said that neither China
nor Latin America see the other as a top trade and investment
partner and both have other higher priorities. CICIR's Wu
also emphasized that geographical distance and limited
cultural
interaction hinder growth potential. As an example, she said
that while oil imports from Venezuela were increasing,
Venezuela
was unlikely to become a key long-term supplier because of
its
distance and the fact its oil was heavy crude, which China
at present does not have the capacity to process. Securing
Venezuelan oil imports helped China to diversify its energy
BEIJING 00004253 002 OF 004
sources, but China viewed Venezuelan oil imports primarily
as a "supplement".
FTAs (Light) Key to China,s Agenda
----------------------------------
¶5. (C) According to the China Academy of Social Science
(CASS) Economic Division Chief and Latin America specialist
Wu Guoping, FTAs are a key tool for China to increase trade
with Latin America. While China saw much potential in
signing FTAs with Latin American countries, progress was
often determined by the willingness of Latin American
leaders to enter into negotiations with China. As examples,
Wu said Chile,s president was eager to sign an FTA with
China, providing the impetus behind the 2005 China-Chile
FTA, and now Peruvian and Costa Rican presidents are also
making an FTA with China a priority. Wu predicted that Peru
and Costa Rica would sign a products FTA agreement before
looking at agreements in the service and investment
sectors, allowing both sides to tackle easier issues
first. Asked whether China would sign additional FTAs with
other Latin American countries, Wu was less optimistic,
noting that many other Latin American countries, such as
Brazil and Argentina, competed with China in many sectors,
making FTAs more difficult.
¶6. (C) Chian said Hu's visit to Peru would include a
bilateral summit prior to the APEC summit where both sides
hoped to sign an FTA. However, Peruvian private sector
concerns in some areas, such as textiles and shoes, were
sticking points in negotiations. Chian also expected both
countries to also announce several agreements, such as
on trade in citrus fruit and phytosanitary standards.
Martinez
said Hu and Costa Rican President Arias would likely
announce the beginning of FTA negotiations and he added
that momentum on the Costa Rican side was strong, given
that Arias was in the final year of his term and an FTA
with China was a key goal. (Note. According to November 18
press reports, China and Costa Rica announced that they
would begin FTA negotiations. End Note.) Martinez agreed,
however, that a China-Costa Rica FTA would probably be
limited in scope and only include unspecified sectors that
were easier to address.
Hu,s visit
----------
¶7. (C) Speculating on China,s goals for the visit, Martinez
said that it is "no secret" that China sees Costa Rica as a
"hub" for Central America and China likely judged a
high-level visit to Costa Rica would demonstrate the
benefits of formal diplomatic ties to other Central
American countries. CASS's Wu agreed, noting the
significance of Hu Jintao visiting a Central American
country for the first time, a region where Taiwan's
presidents have made numerous visits. Costa Rica provided
an economic bridge to Central America and strong trade ties
with Costa Rica could allow other Central American
countries better access to Chinese goods. According to Wu,
China hoped growing trade would help smooth the way for
closer political ties, but in the end, the decision to
sever formal relations with Taiwan came down to internal
political calculations that China had little control over.
(Note. According to press reports, China and Costa Rica
signed 11 agreements, including on trade, finance, and
energy. These agreements include a Chinese commitment to
build a stadium in Costa Rica and to use its foreign
reserves to buy $300 billion in Costa Rican bonds. End
Note.).
¶8. (C) Regarding Hu,s stop in Cuba, CASS's Wu said Hu would
probably seek to introduce China's economic situation,
including its transition from a socialist to market
economy, but would refrain from offering suggestions that
could be viewed as interfering in Cuba's affairs. According
to Jiang Shixue, Deputy Director of CASS's Institute of
Latin America Studies, it would be difficult to apply
China's economic model to Cuba and he expected Raul Castro
to be much like his brother in leading the country.
However, he thought a gradual economic opening to the world
was the best way forward for Cuba.
Investment Ties Face Obstacles
------------------------------
¶9. (C) Several Chinese scholars described Latin America as
BEIJING 00004253 003 OF 004
a challenging investment environment. According to CASS's
Wu, Chinese companies were not familiar with local laws and
did not know how to handle issues such as strikes by local
workers. The difficult conditions for Chinese companies
were exacerbated in some countries by poor security
environments and the potential for expropriation. CICIR's
Wu agreed that many Chinese businesses were reluctant to
expand their presence in Latin America, noting that high
hopes for a jump in investment following Hu's 2004 visit to
Latin America failed to materialize. While the Chinese
government encouraged companies to do business in Latin
America, few companies followed through because they "were
not mature" and did not fully understand Latin American
laws and constitution.
¶10. (C) CASS's Wu said there was also a disconnect between
Chinese and Latin American investment priorities. Chinese
companies preferred projects, such as mining, that would
yield quick profits, but many Latin American countries
preferred longer term investment in roads, railroads, and
ports. This was evident in Peru, where, according to Chian,
Peru was offering BOT (build, operate and transfer)
investment
agreements, but China only wanted to "build", making China an
unlikely candidate for investment in Peruvian railroad and
infrastructure. Mexico's economic officer Jose Alberto Limas
said that some small Chinese companies had asked about
investing in Mexico but importing all the necessary workers
from China, a non-starter from the Mexican point of view.
¶11. (C) Nonetheless, China,s investment in Latin America
was growing and Latin American countries were increasingly
looking to China as an investment source. Limas said that
the greatest potential in Sino-Mexican economic ties lies
in the area of investment. Mexico and China signed a
bilateral investment treaty in July 2007, which he expected
to be ratified in the near future and would provide a more
reliable legal framework for each side's companies to
invest in the other. As in the case with Costa Rica, Mexico
could theoretically serve as a convenient base from which
Chinese-invested firms could obtain duty free access to
the North American market under the NAFTA. CASS's Wu also
said bilateral investment treaties were a useful way to
overcome investment barriers and he cited China,s treaty
with Chile and subsequent joint ventures in the mining
sector as an example of progress in this area.
¶12. (C) Peru's Chian pointed to investment from China as a
major potential growth area, noting that Chinese investment
in mining, particular copper, has boomed in the last year
and a half. Separately, Martinez said Costa Rica was
looking to China for help in exporting high-tech goods,
such as in the pharmaceutical and business service sectors.
There was also potential for investment in infrastructure,
such as the construction of a railway linking the Caribbean
to the Pacific.
Managing Trade Frictions
------------------------
¶13. (C) Despite China's almost fully balanced trade
relationship with Latin America, many Latin America
countries produce similar products and are therefore
economic competitors. CICIR's Wu described trade frictions
with Latin American countries as a "major headache", noting
that Brazil, Argentina, and Mexico have all brought
anti-dumping and other unfair trade suits against China in
the WTO. CASS's Jiang said that Latin American countries
were abusing anti-dumping mechanisms, forcing China to use
legal mechanisms to fight back.
¶14. (C) According to CICIR's Wu, trade frictions with
Mexico were the most troublesome due in part to the dispute
over the size of Mexico,s trade deficit. (Note. Mexico and
China disagree over the size of the trade imbalance.
According to Chinese 2007 figures, Mexico imported $11.7
billion and exported $3.3 billion, but according to Mexican
figures, Mexico imported $30 billion and exported only $2
billion. According to Limas, this was due to triangulation
with the U.S. Chinese figures do not include exports to the
U.S. that ultimately are sold in Mexico. End Note.) Wu said
China and Mexico are using their bilateral commission to
address the lopsided trade flows, and China is looking to
assist Mexico in cotton and rice production to soften the
trade imbalance. At the same time, Mexico is also seeking
BEIJING 00004253 004 OF 004
to increase exports to China in areas such as minerals,
agriculture, and specialty goods like Corona beer, but
Mexican companies have been slow to take advantage of
opportunities in China.
¶15. (C) Limas said Mexico ran a large trade deficit with
China because both countries make essentially the same
things, but China makes them more cheaply and has the
advantage of economies of scale. Mexico also is not seeking
to be a raw materials exporter like Brazil and therefore,
the large trade deficit was something Mexico "would have to
live with". Furthermore, Mexico and China signed an
agreement earlier this year under which Mexico will have to
reduce all its non-WTO compliant antidumping duties on
Chinese goods over the next three years, a step likely to
exacerbate the official trade imbalance, even as it reduces
Mexican imports of illegal contraband goods.
¶16. (C) Peru in 2007 maintained a surplus of about $5
billion with China, due largely to mineral exports such as
copper that have surged in the last couple years, but Chian
emphasized that the trade relationship was not "optimal"
because exports were highly concentrated in minerals. Peru
was seeking greater balance in its exports, and
agricultural products, fish meal, and wood from the
Peruvian jungle all provided opportunities to balance
trade.
China-Latin America Regional Forum Unlikely
-------------------------------------------
¶17. (C) CASS's Jiang said there were competing views among
scholars whether China should have its own regional forum
with Latin America where China could showcase its political
and economic ties to the region. Some scholars supported
the idea saying such a forum would allow China to raise its
profile in the region. Jiang however opposed such a forum
because, unlike the African Union, there is no Latin
American regional organization that represents the whole of
Latin American and the creation of such as organization
would feed the "China Threat Theory" in the United States.
CASS,s Wu added that there were already many countries that
had forums with Latin America, such as the US, the EU, and
Spain and Portugal and China would be best served by
building formal and informal relations with existing
regional organizations such as the Interamerican
Development Bank (IADB) and the Organization of American
States. China's recent membership in the IADB was an
opportunity to demonstrate its commitment to the region and
provided an additional avenue for China to promote economic
engagement.
¶18. (C) Comment. China trade with Latin America, which will
probably reach about $150 billion for 2008 and is rapidly
expanding, is still tiny when compared with US trade with
the region. A relationship characterized by large
Latin American natural resource exports to China,
particularly from Southern American and Southern Cone
countries, and large consumer good imports from China would
seem to be a natural fit. However, it remains to be seen
whether
China can adapt to the Latin American investment
environment that so far is limiting its ability to realize
its full potential as a natural resource importer from
Latin America. End Comment.
RANDT