Chaufa - Saturday, April 22

A UN presentation on the GDI, Cai Wei's trip to Honduras, and a Taiwanese delegation prepares to head to Chile and Peru. Plus, thoughts on Lula's Beijing trip and Taiwan's loss in diplomatic allies.

Apr 22, 2023

Good morning, and welcome to Chaufa, a China, Taiwan & Western Hemisphere newsletter.

Quote of the day

“China has made substantially more inroads than I had imagined… If we work with our Latin American partners, our partners in this hemisphere, we're going to be much more capable of not becoming dependent on China.” - U.S. Senator Mike Lee (R-UT), per an interview

The weekend roundup

Around the world

A number of regional publications picked up on Foreign Minister Qin Gang’s remarks at the Shanghai Lanting Forum, where he discussed the GDI and BRI, as well as Taiwan. (Loop News)
- At the Lanting forum, New Development Bank President (and former Brazilian president) Dilma Roussef praised Chinese modernization and criticized the U.S. and Europe’s influence in South America. (Shine)
Treasury Secretary Yellen gave a major speech on China, outlining the U.S.-China relationship as: prioritizing national security and human rights, promoting a healthy economic relationship, and cooperating on global issues. (CNN)

Politics and government

Guayana’s FM called for increased trade in non-oil products when he met with a delegation from Shandong province. (Newsroom)
The president of China’s International Development Cooperation Agency discussed education, electrification, and sanitation projects with the Nicaraguan president. (Viva Nicaragua)
President Xi congratulated Cuban President Miguel Diaz-Canel on his re-election. (MOFA)
The Mayor of Rio Grande met with the head of Xiaomi Argentina to discuss the company’s investment in the city and making Rio Grande a “ global technological and productive city.” (Aire Libre)

Finance and investment

Shein is looking to invest about $150 million in Brazil to establish a network of textile manufacturers in the country. (Reuters)
Uruguay’s FM signed an agreement with the Chinese Vice Minister of Commerce to establish a working group on investment and economic cooperation. (MasContainer)

Taiwan

Guatemala’s president is set to land in Taipei on April 24, when he will meet with President Tsai, as well as VP and DPP Chair William Lai, and speak to the Taiwanese Legislative Yuan. (Reuters)
- Correction: in our last issue, we incorrectly said that he would be arriving “this weekend”, rather than on Monday. Apologies.
Taiwan’s International Cooperation and Development Fund (ICDF) launched a new digital center and provided $5.5 million in loans and grants to the Belizean Development Finance Corporation.
BBC ran an interesting human interest piece on Paraguayans who’ve chosen to migrate to Taiwan
In response to domestic criticisms about a debt of more than $200 million to Taiwan, St. Vincent’s FM praised the ROC-SVG relationship and rejected arguments that Taipei “owns” Kingstown. (Searchlight)
Taiwan’s foreign ministry donated $1.5 million to the government of St. Kitts and Nevis for unspecified “development” purposes. (WIC)

Trade

BBC’s recent report on Ecuador’s shrimp industry argues that its aquaculture boom is due in large part to growing Chinese demand for shrimp and the illegal flow of Ecuadorian shrimp to China through Vietnam.
The Chinese customs administration signed an agreement with Brazil’s agriculture ministry to facilitate processed protein exports. (3tres3)

Science and culture

The DR’s Minister of Higher Education, Science and Technology praised Chinese cultural contributions and PRC-DR cooperation in a speech at the Technological Institute of Santo Domingo. (Proceso)
High-level officials from China’s space agencies visited Venezuela’s Bolivarian Agency for Space Activities (ABAE) to discuss training cooperation and potential joint projects. (Xinhua) (Aporrea)
Argentine actors and directors are taking a prominent role in Beijing’s International Film Festival. (Infobae)

Weekend thoughts

Deep blow or over-the-top brouhaha?

The big news next week in China-Taiwan-LAC relations will likely be the results of the Paraguay’s general elections. Coming on the heels of Honduras’s closing of the ROC’s embassy in Tegucigalpa, many in Washington and across the hemisphere will likely characterize a potential flip by Taiwan’s largest remaining diplomatic ally as a strong blow to Taipei.

But will it really?

We’ll have more to say about this in the coming weeks, but the continued characterization of Taiwan’s dwindling allies as a significant blow to Taipei is a mistake. Frankly speaking, the annual petitions that Taiwan’s few diplomatic allies gave the UN, ICAO, WHO over Taiwan’s exclusion was never going to change Taiwan’s relationship to the international community. Likewise, since the UN, the U.S., and Japan starting recognizing the PRC in the 1970s, the shipped has long sailed over whether the ROC is the “real China” and should be diplomatically recognized.

Lastly, China is not going to make its decision on whether to harass or invade Taiwan based on how many formal diplomatic allies it has. The issue basically never comes up in PRC government statements about a possible invasion, and if the Beijing is willing to risk condemnation by G7 countries, they will be willing to risk the same from St. Vincent and Eswatini.

This is certainly a controversial opinion, but when speaking to Taiwanese on the island, they’ll be frank that at the end of the day it’s the informal relationship with the United States and Japan, rather than with the formal diplomatic partners, that keep the island safe from PRC aggression and engaged in the international community (like in APEC and the WTO).

Moreover, the focus on formal diplomatic allies is increasingly a distraction from the active ways countries in the hemisphere can support Taiwan remain free from Beijing’s domination. Only seven LAC countries host Taiwanese trade offices (TECOs), and of those, only six have meagerly staffed trade offices in Taipei. Both for countries that recently split from Taiwan and those who severed relations long ago, expanding the informal relationship through trade and cultural offices on both sides of the Pacific could be a real and meaningful opportunity for supporting Taipei. In some ways, it appears that the Taiwanese government recognizes this with its upcoming government delegation to Peru and Chile to lobby for its inclusion in the CPTPP.

This doesn’t mean that a split in relations has no consequences whatsoever: fewer diplomatic allies is a domestic political blow for some Taiwanese (especially those in the pro-KMT camp), Honduran and Paraguayan MOFA scholarship students will have their scholarships revoked, there will be fewer ambassadorships available to Taiwanese diplomats, and the few Taiwanese in Paraguay and Honduras (and Paraguayans and Hondurans in Taiwan) will lose access to consular services.

But in the grand scheme of Taiwan’s international stature, security, and economic performance, these consequences are small fish.

The friend of my enemy is my… what?

In what is likely to be a continuous theme in this newsletter, folks need to calm down about Lula’s trip to Beijing. Articles that called the trip “a slap to Biden” or “defiance of U.S. foreign and trade policy” are overstating the case, especially when considering Brazil’s tradition of an independent foreign policy (aside of the Bolsonaro Administration, of course).

First, everyone appears to be forgetting that Lula traveled to Washington two months before he landed in Beijing. This was no coincidence, and demonstrates the high-level of importance Lula personally places in Brazil’s relationship with the United States. Additionally, the Biden-Lula meeting’s focus on areas like climate change, democracy, and human rights (with the latter two certainly not coming up in a discussion between Xi and Lula). Given that these are some of the Biden administration’s highest foreign policy priorities at the moment, there is plenty of room for future cooperation between Brasilia and Washington. While the two sides won’t see eye-to-eye on every issue, policy disagreements are a natural part of a good bilateral relationship (just look at the U.S. and France).

Second, China is the world’s second largest economy, it has the world’s second largest population, and it’s Brazil’s largest trading partner. It’s only natural that Brazil is going to have a relationship with China, and signing economic agreements and collaborating on areas of mutual interest is to be expected.

This is not to dismiss that Lula said some things that will infuriate those in Washington — his remarks on Biden Administration’s support for Ukraine, as well as the U.S. dollar’s dominance in developing countries, might create some strains on the relationship. But Lula’s position on Russia’s war in Ukraine has been fairly consistent and well-known, and some analysts have suggested that reducing the dollar’s dominance in international trade could be beneficial to the U.S. economy.

Next week’s events of note

April 24-26 - Guatemalan President Giammattei travels to Taiwan
April 26 - U.S. House Oversight Committee hearing on Chinese money laundering and cartels
April 28 - Atlantic Council event on Paraguay’s elections and Taiwan & China
April 30 - Paraguay’s general elections

That’s it for today! See you on Tuesday for another roundup.