Is China Stockpiling Resources to Prepare for War? May 29, 2024 Is China's Economy Facing Its Own 'Lost Decades'? By Micah McCartney China News Reporter https://www.newsweek.com/china-stoc...aiwan-economy-gold-oil-ukraine-russia-1905113 China's rapid accumulation of commodities has drawn global attention and led some analysts to speculate President Xi Jinping's country is girding itself for war over Taiwan. "Xi seems to have studied the sanctions playbook the West used against Russia over Ukraine and subsequently initiated long-lead protective measures to batten down the hatches of China's economy to resist similar pressure," former Office of Naval Intelligence head Michael Studeman wrote recently on foreign policy analysis website War on the Rocks. China claims democratic Taiwan as its territory, though Beijing's ruling Chinese Communist Party has never governed there. U.S. officials believe Xi has instructed Chinese forces to be prepared to invade the island by 2027, though opinion in Washington is divided on the reality of this threat. Among the resources being stockpiled is gold. Gold prices hit record highs in recent months as China's central bank diversified its holdings and consumers turned to the safe haven amid a flagging stock market and the country's strict capital controls. The People's Bank of China increased its gold reserves for the 18th consecutive month in April, boosting them by 5 percent in dollar terms following an 8 percent rise in March. "Gold reserves have always been an important part of China's diversified international reserves." Liu Pengyu, spokesperson for the Chinese embassy in the U.S., told Newsweek when asked whether the stockpiling was a sign of preparations for war. "From a long-term and strategic perspective, China dynamically adjusts the allocation of its international reserve portfolio as needed to ensure the safety, liquidity, preservation, and appreciation of international reserves," he added. Taiwan has not commented publicly on China's stockpiling. China's buying streak extends to oil as well. Already the world's largest importer, China bought a record 11.3 million barrels per day last year. However, this 10 percent increase came amid increased demand for fuel after the end of China's strict pandemic-era restrictions. "China is also working to mitigate its exposure to potential food and energy embargoes, building up its strategic petroleum reserves and constructing coal-fired plants with renewed fervor," Studeman said. He added that Xi expects a strong international backlash over a potential invasion of Taiwan and is preparing China to ride it out. Tensions Rising Tensions in the Taiwan Strait rose further last week. Chinese forces kicked off two days of drills around Taiwan to punish the island over its inauguration of Beijing-skeptic President Lai Ching-te. China said the exercises served to test the People's Liberation Army's ability to "occupy and control key areas." Another potential flashpoint is the South China Sea, where China is locked in an escalating territorial dispute with the Philippines, which has a mutual defense treaty with the U.S. Other analysts have argued China may be poised to use what economists have called an economic "nuclear option," or intentional devaluation of its currency to boost its exports. This file photo shows a pile of gold ingots. Gold is among the commodities China has been rapidly buying up as it diversifies away from dollar-denominated assets. Marc Garanger/Getty Images Still others believe that China's stockpiling of resources does not necessarily signal imminent war over Taiwan, saying that increasing autonomy and reducing the West's ability to weaponize these resources against China is a strategic move in its own right. "What is likely driving Beijing's acceleration of efforts to improve China's self-reliance and potential sanction resilience is not so much preparation for military adventurism, but rather a reaction to how quickly and how united the West acted to economically punish Russia for its invasion of Ukraine," Nathan Attrill, an analyst at the Australian Strategic Policy Institute, told Newsweek. "China is much more exposed to the global economy than Russia was, and this gives the West leverage over China that its leaders absolutely do not want," he added. Under Xi's leadership, the Chinese government has been seeking greater control over resources contributing to its national security and prosperity, Attrill said. "Not just for any future conflict, but to make China strong on its own terms and able to achieve its foreign policy goals without the need to fight." The theories that stockpiling could be a sign of preparations for war were not new, said Vincent Deluard, director of Global Macro Strategy at financial services company StoneX Group Inc. He compared the situation with the U.S.'s creation of the Strategic Petroleum Reserve, "when the U.S. becomes dependent on Middle Eastern oil and realizes it could be lost any time." Autonomy is China's "overriding strategic goal," he added.
https://oilprice.com/Geopolitics/In...rams-to-Promote-Authoritarian-Governance.html China Expands Training Programs to Promote Authoritarian Governance
China Warns Fliers to Keep Window Shades Down on Security Fears Third of airports are used by both military and civil aircraft Window shades are usually requested to be kept up for safety By Shikhar Gupta June 25, 2024 https://www.bloomberg.com/news/arti...des-down-on-security-fears?srnd=homepage-asia China’s Ministry of State Security has warned passengers against opening window shades during take-off and landing at airports used by both civil and military aviation, a move that runs counter to prevailing practices regarding aviation safety. The warning, issued on WeChat Monday, was aimed at limiting the leak of sensitive military information through photos and videos taken by passengers during take-off or landing at dual-use airports, the South China Morning Post reported. The ministry said in its post that passengers using dual-use facilities — almost a third of China’s airports — are prohibited from capturing images or videos of sensitive areas. It cited a recent incident in which a foreign national was suspected to have “illegally” captured images from the window of their plane. Another flight was ordered to return to the gate for security checks after a passenger “repeatedly” opened his window shade during take-off to take photos. The passenger was then detained for seven days, the ministry said. Passengers around the world are often asked to have their window shades up during take-off and landing for safety reasons, including to aid with evacuation in the case of emergency and for rescuers to be able to spot smoke and fire, according to Amsterdam’s Schipol Airport. However, the rules vary by airline and are not legal requirements.
New ‘alliance’ calls out China’s bad cyber behaviour Andrew Tillett Foreign affairs, defence correspondent Jul 10, 2024 https://www.afr.com/politics/federa...t-china-s-bad-cyber-behaviour-20240710-p5jsgo Japan and South Korea’s willingness to back an Australian-led statement accusing China of cyberspying signals the emergence of a new de facto alliance fed up with Beijing’s relentless campaign of intrusions in government and private sector networks. The two countries have been reluctant to call out China’s cyberespionage, but months of diplomatic work and discussions among security agencies and technical experts led to Tokyo and Seoul adding their voice – a welcome surprise to officials involved in the behind-the-scenes work. Deputy Prime Minister Richard Marles in Washington for meetings of NATO, where he is expected to discuss China’s cyber behaviour. AP Japanese and South Korean involvement has provided a powerful counter-argument to China’s repeated denials it engages in industrial-scale hacking. Beijing typically dismisses those accusations as a US and Five Eyes-inspired creation to “smear” China. Similarly, it is hoped that Tokyo and Seoul calling out China will be noticed by other Asian capitals that may not give as much credence to an Anglo-centric statement. “Japan and Korea is a big deal for us,” one senior official told The Australian Financial Review. “This is not something they do frequently like the Five Eyes. We see it as a pretty significant step.” The Australian-initiated attribution is a further down payment on Australian and Korean ministers’ desire to work more closely with Japan, including on cybersecurity. When Defence Minister Richard Marles and Foreign Minister Penny Wong hosted their Korean counterparts in Melbourne in May, they resolved to “explore trilateral co-operation” with Japan. In June, Mr Marles met his Japanese and Korean counterparts on the sidelines of the Shangri-La security dialogue in Singapore, the first trilateral defence ministers meeting involving the three countries. After decades of historical animosity, relations between Japan and South Korea have warmed significantly in the past couple of years, with the United States orchestrating the breakthrough amid rising regional anxiety over China. On Tuesday, the Australian Signals Directorate took the lead to publish new advice about a hacking group with close links to China’s powerful Ministry of State Security. The group, dubbed APT40, exploits compromised or ageing devices to breach defences, including widely used software programs. ASD said the group had repeatedly targeted government and private sector networks across the region and in one case managed to steal hundreds of usernames and passwords from an Australian organisation in 2022. Australia’s Five Eyes allies the US, UK, Canada and New Zealand put their name to the statement, along with Japan, South Korea and Germany. The statement was issued three weeks after Mr Albanese hosted Chinese Premier Li Qiang in Canberra, where it is believed the prime minister expressed concern over Beijing’s concerted cyber activities. Mr Marles is expected to discuss China’s cyber behaviour with counterparts at this week’s NATO summit in Washington, where leaders from Japan and South Korea are also attending. Australian cybersecurity officials have an approach of never publicly blaming a group or foreign government for a cyber intrusion without 100 per cent certainty, a process that can take months or years. But once they have concrete proof, officials will then begin canvassing like-minded governments about adding their name to a joint statement. Those countries will often have their own experts examine the strength of the evidence, and it can take months of talks and finessing the language in statements and technical advice before it is released. “There is an increasing level of worry about the prevalence of these cyber activities and it’s hitting government, industries and every part of our economies and society,” the official said. “We are working hard very with partners in the region to make them aware of the threat environment.” Australian Strategic Policy Institute senior fellow Euan Graham said the Japanese and South Korean stance was a contrast to South-East Asian nations’ reluctance to criticise China publicly. “It significantly breaks the cultural mould that while Asian partners share a lot of common threats with Australia, they tend to downplay their public critique of China,” he said. “This widens the circle from the usual suspects, aka the Five Eyes, and points out indirectly these countries are aware and at risk of China’s cyber activities.”
China's operation to influence politics and elections in other nations. China-linked ‘Spamouflage’ network mimics Americans online to sway US political debate https://apnews.com/article/china-di...-us-election-a2b396518bafd8e36635a3796c8271d7 WASHINGTON (AP) — When he first emerged on social media, the user known as Harlan claimed to be a New Yorker and an Army veteran who supported Donald Trump for president. Harlan said he was 29, and his profile picture showed a smiling, handsome young man. A few months later, Harlan underwent a transformation. Now, he claimed to be 31 and from Florida. New research into Chinese disinformation networks targeting American voters shows Harlan’s claims were as fictitious as his profile picture, which analysts think was created using artificial intelligence. As voters prepare to cast their ballots this fall, China has been making its own plans, cultivating networks of fake social media users designed to mimic Americans. Whoever or wherever he really is, Harlan is a small part of a larger effort by U.S. adversaries to use social media to influence and upend America’s political debate. The account was traced back to Spamouflage, a Chinese disinformation group, by analysts at Graphika, a New York-based firm that tracks online networks. Known to online researchers for several years, Spamouflage earned its moniker through its habit of spreading large amounts of seemingly unrelated content alongside disinformation. “One of the world’s largest covert online influence operations — an operation run by Chinese state actors — has become more aggressive in its efforts to infiltrate and to sway U.S. political conversations ahead of the election,” Jack Stubbs, Graphika’s chief intelligence officer, told The Associated Press. Intelligence and national security officials have said that Russia, China and Iran have all mounted online influence operations targeting U.S. voters ahead of the November election. Russia remains the top threat, intelligence officials say, even as Iran has become more aggressive in recent months, covertly supporting U.S. protests against the war in Gaza and attempting to hack into the email systems of the two presidential candidates. China, however, has taken a more cautious, nuanced approach. Beijing sees little advantage in supporting one presidential candidate over the other, intelligence analysts say. Instead, China’s disinformation efforts focus on campaign issues particularly important to Beijing — such as American policy toward Taiwan — while seeking to undermine confidence in elections, voting and the U.S. in general. Officials have said it’s a longer-term effort that will continue well past Election Day as China and other authoritarian nations try to use the internet to erode support for democracy. Chinese Embassy spokesperson Liu Pengyu rejected Graphika’s findings as full of “prejudice and malicious speculation” and said that “China has no intention and will not interfere” in the election. X, the platform formerly known as Twitter, suspended several of the accounts linked to the Spamouflage network after questions were raised about their authenticity. The company did not respond to questions about the reasons for the suspensions, or whether they were connected to Graphika’s report. TikTok also removed accounts linked to Spamouflage, including Harlan’s. “We will continue to remove deceptive accounts and harmful misinformation as we protect the integrity of our platform during the US elections,” a TikTok spokesperson wrote in a statement emailed on Tuesday. Compared with armed conflict or economic sanctions, online influence operations can be a low-cost, low-risk means of flexing geopolitical power. Given the increasing reliance on digital communications, the use of online disinformation and fake information networks is only likely to increase, said Max Lesser, senior analyst for emerging threats at the Foundation for Defense of Democracies, a national security think tank in Washington. “We’re going to see a widening of the playing field when it comes to influence operations, where it’s not just Russia, China and Iran but you also see smaller actors getting involved,” Lesser said. That list could include not only nations but also criminal organizations, domestic extremist groups and terrorist organizations, Lesser said. When analysts first noticed Spamouflage five years ago, the network tended to post generically pro-China, anti-American content. In recent years, the tone sharpened as Spamouflage expanded and began focusing on divisive political topics like gun control, crime, race relations and support for Israel during its war in Gaza. The network also began creating large numbers of fake accounts designed to mimic American users. Spamouflage accounts don’t post much original content, instead using platforms like X or TikTok to recycle and repost content from far-right and far-left users. Some of the accounts seemed designed to appeal to Republicans, while others cater to Democrats. While Harlan’s accounts succeeded in getting traction — one video mocking President Joe Biden was seen 1.5 million times — many of the accounts created by the Spamouflage campaign did not. It’s a reminder that online influence operations are often a numbers game: the more accounts, the more content, the better the chance that one specific post goes viral. Many of the accounts newly linked to Spamouflage took pains to pose as Americans, sometimes in obvious ways. “I am an American,” one of the accounts proclaimed. Some of the accounts gave themselves away by using stilted English or strange word choices. Some were clumsier than others: “Broken English, brilliant brain, I love Trump,” read the biographical section of one account. Harlan’s profile picture, which Graphika researchers believe was created using AI, was identical to one used in an earlier account linked to Spamouflage. Messages sent to the person operating Harlan’s accounts were not returned.
China’s Stock Rally Is Feeding a Casino Frenzy Among Amateur Investors The swelling crowds at Shanghai’s street corner stock salon show rampant speculation is on the rise. Illustration: Maggie Cowles for Bloomberg By Bloomberg News 15 November 2024 https://www.bloomberg.com/news/arti...ding-and-amateur-investors?srnd=homepage-asia China Stock Rally Feeds Frenzy in Casino-Like Market (Audio) On a cigarette smoke-filled street corner in Shanghai, 70-year-old stock picker Yu held court for a crowd of onlookers eager to hear about his investment strategy. “Stocks can only be speculated,” said the pensioner, dressed in a red and blue checked shirt and khaki cargo trousers. “Once invested, you lose.” To emphasize his point, he scrolled through what appeared to be share transactions on his smartphone, as the impromptu audience huddled under a canopy of umbrellas to guard against the rain. “If a stock I buy doesn’t make me any money, within three days I would dump and buy a new one,” said Yu, who only wanted to be identified by his surname, espousing an approach that typically sees him make hundreds of trades a week. For more than 30 years, such scenes played out daily near Shanghai’s Bund waterfront as small-time investors congregated to swap tips and market gossip, rain or shine. The so-called stock salon at the corner of Guangdong and Xizang roads went largely quiet after the market crash in 2015 and as investors increasingly moved online. It died altogether during the Chinese megacity’s Covid lockdown in the spring of 2022. But a stimulus-fueled rally that started in late September has breathed new life into the curbside forum, with the swelling crowds and buoyant mood indicating renewed faith in the world’s second-largest stock market. Yu in Shanghai in October.Photographer: Charlie Zhu/Bloomberg On a warm and drizzly Saturday afternoon in late October, some 200 men and women jostled for space at the salon as they debated trading tactics, the market outlook and how to position portfolios amid the prospect of worsening US-China tensions. Yu’s rapid-fire approach is common among mom-and-pop investors in China who trade in and out frequently, often based on investment tips from friends and online influencers. And while the growing crowds at Shanghai’s stock salon indicate the government’s efforts to spur investor confidence are working, the garrulous nature of the forum also speaks to the challenges of building a mature and stable market. Unlike more developed exchanges that are driven by institutional investors, China’s bourses are dominated by an army of 200 million retail investors. As well as being swayed by rumor, they’re known for trading stocks based on homophones — words that sound similar to another name or a phrase. As the US presidential election results unfolded during Asia trading on Nov. 6, for example, a company whose Chinese name sounds to Mandarin speakers like “Trump wins big” surged 10%, while a stock that sounds like “Harris” dropped 7.1%. Critics say such an approach is more akin to spinning a roulette wheel at a casino than a sound investment strategy, and excessive speculation hasregularly magnified volatility and led to frequent boom-bust cycles. It also complicates the government’s goal of turning the $10 trillion stock market into a source of wealth for households and long-term funding for businesses. “The Chinese market is still immature,” said Shu Taifeng, a partner with Shanghai Chongyang Investment Management Co., a major domestic hedge fund. “Investor education remains an arduous task.” Under the late leader Deng Xiaoping, who famously said “to get rich is glorious,” China set up stock exchanges in Shanghai and Shenzhen in 1990. Surging stock prices in the early years lured millions of retail investors, prompting regulators at the time to create a lottery system for the purchase of newly issued shares. Anger over alleged corruption in the system led to a riot in Shenzhen in 1992. Authorities have made significant progress in improving market transparency through regulatory supervision and better corporate disclosure. Investor access to information has widened, thanks in part to a proliferation of financial information apps. China’s bourses have grown into the world’s second largest by market capitalization, raising badly needed capital for more than 5,000 state-run and privately controlled enterprises. The base of institutional investors has also expanded. The mutual fund industry has grown from virtually nothing in the 1990s to about $4.5 trillion, while the hedge fund sector has ballooned to $715 billion. Many overseas firms like Fidelity International Ltd., Blackrock Inc. and Bridgewater Associates have set up shop in China, and regulators continue in their efforts to bring in long-term investment, or “patient capital,” from insurers and pension funds. But speculation by retail investors still reigns. Daily turnover, or the value of shares changing hands each day, reached a record 3.45 trillion yuan ($476 billion) in early October. Market sentiment has soured over the past week after an underwhelming fiscal stimulus announcement and amid concerns that US-China relations will worsen when Donald Trump returns to the White House. But despite the recent declines, the benchmark CSI 300 Index is still up almost 28% from its September low. And although transactions have moderated to some 2.3 trillion yuan, turnover is still almost four times what it wasbefore the rally and dwarfs the level experienced by major stock markets in India and Japan. Crowds of people huddle under a canopy of umbrellas at Shanghai's stock salon.Photographer: Charlie Zhu/Bloomberg Among those retail investors who are impatient is Wu, an octogenarian who’s been visiting the stock salon every Saturday since late September as he seeks to exit a bad investment made more than 10 years ago. The Shanghai native, who invested a chunk of his life savings in a state-run construction company after reading a glowing local newspaper report, said the stock is still down more than 30%. He’s planning to sell a quarter of his stake once the price breaks even and will cash out entirely if it rises further. “I’m not doing well in this life,” Wu sighed, bemoaning repeated scolding from his wife. “I don’t want to play stocks again.” Apparently worried the rally will peter out, the pensioner, who asked to be identified only by his surname, urged other investors at the forum to take a long-term view. “This is a bull market, but it’s a slow bull. You can’t eat hot tofu if you’re in a hurry,” he said, using a popular phrase that emphasizes the need for patience. Retirees make up a big proportion of the salon crowds. While many younger investors have migrated to online platforms, the older regulars are nostalgic for the pre-smartphone era and clearly enjoy the debate. As the street forum grows in popularity, it’s also attracting an increasing number of livestreaming influencers, who earn commissions by bringing traffic to social media platforms. That in turn can amplify the rumor mill and increase speculation. In a sign that authorities are becoming uneasy, there was a fairly large police presence on Nov. 9 as hundreds of people gathered at the forum. Uniformed officers roamed through the crowds to stop livestreamers and onlookers from filming the gathering with their phones, mostly to no avail. “Retail investors are often driven by emotions, and many decisions are irrational,” Xiang Xiaotian, a director at Shanghai Chengzhou Investment Management Co., said about the growing crowds at the salon. “The regulatory authorities certainly do not welcome this phenomenon.” Like the influencers, some visitors smell business opportunities. Sitting on a small wooden stool on a recent Thursday afternoon, a middle-aged man who gave his surname as Yan was busily demonstrating stock-charting software on the screen of a laptop perched on a small desk. “This stock may double,” he told onlookers, while pointing to a candlestick chart crisscrossed with colored lines. He was selling the software for between 50 and 200 yuan. The seemingly low price came with a caveat: Buyers should follow his social media account and send him money if they profit from the tool. “You can wire me a hongbao,” said Yan to a prospective customer, referring to the luck-bringing practice of gifting red envelopes containing cash. In a sign of the times, such gifts are increasingly sent electronically.
China megaport opens up Latin America as wary US looks on 4 hours ago Robert Plummer BBC News Reuters: Peru's new megaport is Chinese-built As the world waits to see how the return of Donald Trump will reshape relations between Washington and Beijing, China has just taken decisive action to entrench its position in Latin America. Trump won the US presidential election on a platform that promised tariffs as high as 60% on Chinese-made goods. Further south, though, a new China-backed megaport has the potential to create whole new trade routes that will bypass North America entirely. President Xi Jinping himself attended the inauguration of the Chancay port on the Peruvian coast this week, an indication of just how seriously China takes the development. Xi was in Peru for the annual meeting of the Asia-Pacific Economic Co-operation Forum (Apec). But all eyes were on Chancay and what it says about China's growing assertiveness in a region that the US has traditionally seen as its sphere of influence. As seasoned observers see it, Washington is now paying the price for years of indifference towards its neighbours and their needs. "The US has been absent from Latin America for so long, and China has moved in so rapidly, that things have really reconfigured in the past decade," says Monica de Bolle, senior fellow at the Peterson Institute for International Economics in Washington. "You have got the backyard of America engaging directly with China," she tells the BBC. "That's going to be problematic." Reuters China's Cosco Shipping has exclusive rights to operate the megaport Even before it opened, the $3.5bn (£2.75bn) project, masterminded by China's state-owned Cosco Shipping, had already turned a once-sleepy Peruvian fishing town into a logistical powerhouse set to transform the country's economy. China's official Communist Party newspaper, the People's Daily, called it "a vindication of China-Peru win-win co-operation". Peru's President Dina Boluarte was similarly enthusiastic, describing the megaport as a "nerve centre" that would provide "a point of connection to access the gigantic Asian market". But the implications go far beyond the fortunes of one small Andean nation. Once Chancay is fully up and running, goods from Chile, Ecuador, Colombia and even Brazil are expected to pass through it on their way to Shanghai and other Asian ports. China already has considerable appetite for the region's exports, including Brazilian soybeans and Chilean copper. Now this new port will be able to handle larger ships, as well as cutting shipping times from 35 to 23 days. However, the new port will favour imports as well as exports. As signs grow that an influx of cheap Chinese goods bought online may be undermining domestic industry, Chile and Brazil have scrapped tax exemptions for individual customers on low-value foreign purchases. Reuters Brazilian soybeans and other commodities can now reach China more swiftly As nervous US military hawks have pointed out, if Chancay can accommodate ultra-large container vessels, it can also handle Chinese warships. The most strident warnings have come from Gen Laura Richardson, who has just retired as chief of US Southern Command, which covers Latin America and the Caribbean. She has accused China of "playing the ‘long game’ with its development of dual-use sites and facilities throughout the region", adding that those sites could serve as "points of future multi-domain access for the [People's Liberation Army] and strategic naval chokepoints". Reuters The US fears Peru's new megaport could end up hosting Chinese warships Even if that prospect never materialises, there is a strong perception that the US is losing ground in Latin America as China forges ahead with its Belt and Road Initiative (BRI). Outgoing US President Joe Biden was among the leaders at the Apec summit, on his first and last visit to South America during his four-year term. Media commentators remarked that he cut a diminished figure next to China's Xi. Prof Álvaro Méndez, director of the Global South Unit at the London School of Economics, points out that while the US was taking Latin America for granted, Xi was visiting the region regularly and cultivating good relations. "The bar has been set so low by the US that China only has to be a little bit better to get through the door," he says. Of course, Latin America is not the only part of the world targeted by the BRI. Since 2023, China's unprecedented infrastructure splurge has pumped money into nearly 150 countries worldwide. The results have not always been beneficial, with many projects left unfinished, while many developing countries that signed up for Beijing's largesse have found themselves burdened with debt as a result. Even so, left-wing and right-wing governments alike have cast aside their initial suspicions of China, because "their interests are aligned" with those of Beijing, says the Peterson Institute's Ms de Bolle: "They have lowered their guard out of sheer necessity." Reuters The Apec summit in Peru has highlighted the complex relations between the US, China and Latin America Ms de Bolle says the US is right to feel threatened by this turn of events, since Beijing has now established "a very strong foothold" in the region at a time when president-elect Trump wants to "rein in" China. "I think we will finally start to see the US putting pressure on Latin America because of China," she says, adding that most countries want to stay on the right side of both big powers. "The region doesn't have to choose unless it's put in a position where they are forced to, and that would be very dumb." Looking ahead, South American countries such as Peru, Chile and Colombia would be vulnerable to pressure because of the bilateral free trade agreements they have with the US, which Trump could seek to renegotiate or even tear up. They will be watching keenly to see what happens to the United States-Mexico-Canada Agreement (USMCA), which is up for review in July 2026, but will be subject to negotiations during 2025. Whatever happens, Prof Méndez of the LSE feels that the region needs more co-operation. "It shouldn't be that all roads lead to Beijing or to Washington. Latin America has to find a more strategic way, it needs a coherent regional strategy," he says, pointing to the difficulty of getting 33 countries to agree a joint approach. Eric Farnsworth, vice-president at the Washington-based Council of the Americas, feels that there is still much goodwill towards the US in Latin America, but the region's "massive needs" are not being met by its northern neighbour. "The US needs to up its game in the region, because people would choose it if there was a meaningful alternative to China," he tells the BBC. Unlike many others, he sees some rays of hope from the incoming Trump administration, especially with the appointment of Marco Rubio as secretary of state. "Rubio has a real sense of a need to engage economically with the Western Hemisphere in a way that we just haven't done for a number of years," he says. But for successive US leaders, Latin America has been seen primarily in terms of illegal migration and illegal drugs. And with Trump fixated on plans to deport record numbers of immigrants, there is little indication that the US will change tack any time soon. Like the rest of the world, Latin America is bracing itself for a bumpy four years - and if the US and China start a full-blown trade war, the region stands to get caught in the crossfire.
A view of a container at China's state-owned Cosco Shipping Chancay port inaugurated during the APEC Summit, in Chancay, Peru, in this handout image released on November 14, 2024. APEC Peru/Handout via REUTERS. Trump Ally Urges Duties on Goods Shipped Via China’s Peru Port Bloomberg November 16, 2024 By Eric Martin Nov 16, 2024 (Bloomberg) –A veteran adviser to Donald Trump is proposing that the 60% tariffs that the President-elect has vowed to impose on Chinese goods also apply to goods from any country that pass through a new port that Beijing has built in Peru. The duties should apply to goods from China or countries in South America that pass through the new deep-water port Chancay, a town 60 kilometers (37 miles) north of Lima, said Mauricio Claver-Carone, an adviser to the Trump transition team who served as senior director for the Western Hemisphere on the White House National Security Council in his first administration. “Any product going through Chancay or any Chinese-owned or controlled port in the region should be subject to 60% tariff, as if the product was from China,” Claver-Carone said Saturday in a telephone interview. The duty would help guard against transshipment, Claver-Carone said. That’s the process through which goods from one country — in this case China — enter another and then get re-exported to their final destination market — the US — at lower tariff rates than direct shipments. Transshipment in Latin America has been of particular concern to the US with regard to ports in Mexico, which overtook China as America’s top trading partner following Trump’s trade war with Beijing. But such tariffs also should make nations think twice about allowing Beijing to build a port in their territory, he said. “It’s a shot across the bow” to any country that partners on maritime infrastructure with China, including Mexico, he said. Chinese President Xi Jinping inaugurated the new Chancay port in an elaborate ceremony with his Peruvian counterpart on Nov. 14. Xi boasted that the facility will establish a direct line from Chancay to Shanghai, cutting shipping times and lowering logistics costs. It’s unclear how much of the shipments from the port would be destined for the US, given Peru and China are seeking to get goods from South America to Asia, and to import consumer goods meant for Peru and its neighbors. At a business event Nov. 15, Ren Hongbin, a former Chinese Commerce Ministry official, said he thinks the port may help facilitate trade between China and the US. Xi told outgoing US President Joe Biden at a meeting in Lima on Saturday that he’s ready to work with Trump to improve the relationship between the world’s biggest economies. The pair are in Peru for a summit of Asia-Pacific Economic Cooperation leaders. © 2024 Bloomberg L.P.
A man walks at China's state-owned Cosco Shipping Chancay port inaugurated during the APEC Summit, in Chancay, Peru, November 14, 2024. APEC Peru/Handout via REUTERS China’s $1.3 Billion Gamble on Peru Port Faces Snags From Andes to Amazon Bloomberg November 16, 2024 By Dayanne Sousa and Rachel Gamarski Nov 15, 2024 (Bloomberg) – China has made a $1.3 billion bet that a new port in Peru will boost access to South America’s agricultural bounty. Cashing in on the investment may be harder than expected. China’s President Xi Jinping and Peruvian President Dina Boluarte officially inaugurated Chancay port during a ceremony at Peru’s presidential palace in Lima on Thursday. The move epitomizes Beijing’s ambitions to strengthen commerce with South America as the world braces for more restrictive trade measures under US President-elect Donald Trump. Chancay port, about 44 miles north of Lima, is majority-owned and operated by China’s Cosco Shipping. While the facility promises to slash travel times for cargo going between China and South America, significant hurdles threaten to diminish its success — especially when it comes to getting goods from Brazil. Simply put, transporting agricultural commodities from Brazil’s key growing regions to Peru’s west coast requires traversing through the expansive Amazon and crossing over the Andes mountains. And yet, there are few good roads and no rail links connecting the regions. “It’s geographically complicated,” said Marco Germanò, a researcher at New York University who tracks Chinese investments in the region. While Chancay port may rekindle an old dream of integrating South America’s Atlantic and Pacific coasts, he doesn’t see an effective plan to make it happen. Even the connection between Chancay and some coffee and cocoa producing areas in central Peru isn’t fully efficient, said Rafael Zacnich, manager of economic studies at exporters group ComexPerú. He said he hopes the new port attracts more investors looking to improve infrastructure. Chancay port’s conundrum comes as China faces renewed threats of a trade war with the US. The Asian nation has been emboldened to find other sources of supply for goods such as soybeans and corn, and agricultural powerhouse Brazil is key. The last time Trump was president, Beijing ramped up purchases of soybeans from Brazil as purchases from US diminished. “South America is growing, they’re improving yields, they’re planting more acres, they’re doing things that that they need to do as a country, which puts those volumes on the global stage, and that is absolutely a problem,” said Matt Carstens, chief executive officer of Landus, Iowa’s biggest farm cooperative. “That port will have an additional effect, not just on what maybe happens to South America to China, but other parts of the world as well.” Still, it’s unclear how South American governments will tackle the challenges of geography and poor transportation infrastructure. “We have to build,” Peruvian Finance Minister Jose Arista said in an interview. “And building it requires two things: to figure out the economic viability and to figure out if the political will is there to invest the necessary resources.” Peru is a small economy. While its exports of copper ore and other minerals could go to China through Chancay, integration with other South American countries is key to make the shipping route more relevant. “The idea is that Peru will be the hub to export into Asia,” said Alfredo Thorne, a former finance minister who runs the investment advisory firm Thorne & Associates in Lima. “We trade very little with Brazil, but this could be an opportunity for us to increase our trade.” The existing highway between Peru’s coast and Brazil’s most-prominent agriculture area in Mato Grosso state requires trucks to cross over the Andes. That can be a problem since larger trucks that typically carry soybeans and corn can’t navigate the road, which means transport must be done with smaller vehicles. “It’s an extremely elevated cost,” says Edeon Vaz, executive director at Pró-Logistica Movement, which represents soybean and corn farmers in the Brazilian state. Agricultural groups in the small Brazilian state of Acre that borders Peru see opportunity coming out of Chancay port. Pork and soybean production has been rising in the region and shipping through Peru will likely happen in the future, according to Assuero Doca Veronez, who heads the Federation of Agriculture and Livestock of Acre. “But the logistical infrastructure needs to be set up with more quality,” he said. The agribusiness group and local authorities want a new highway connecting the Brazilian city of Cruzeiro do Sul with the Peruvian town of Pucallpa. An attempt to build such a road, however, was halted last year by a federal court on concerns of potential harm to environmentally protected areas and to indigenous communities. While the administration of Brazilian president Luiz Inacio Lula da Silva wants to improve roads near the Peruvian border over the coming years, building a controversial route in Acre is not contemplated in the federal government’s current plan. The sheer size of the Chancay port represents a big step for South America, a region that has long suffered with shipment delays that often make products less competitive in overseas markets. To enjoy such benefits, though, South American nations also need to broaden existing transportation agreements to allow trucks to flow across borders, said Wagner Cardoso, the superintendent of infrastructure at Brazil’s Industry Confederation. © 2024 Bloomberg L.P.
Long Live Comrade Trump’s Tariffs April 16, 2025 https://www.nytimes.com/2025/04/16/opinion/trump-tariffs-china-ecommerce.html Credit...Brianna Miller By Moira Weigel Dr. Weigel, an assistant professor at Harvard University, is researching a book on e-commerce platforms. In China, one of many nicknames for President Trump is Chuan Jianguo. It literally translates as “Trump the Nation Builder.” My best translation is “Comrade Trump.” The joke is that Mr. Trump is a patriotic son of China who is diligently advancing Chinese interests by causing chaos in the United States. I learned about these memes from friends I made last summer while training as a merchant in Amazon’s official recruitment center in Hangzhou and as a Temu seller in Shenzhen. The companies are part of an enormous e-commerce ecosystem that has become central to global retailing and to the global economy. This ecosystem is deeply rooted in China and includes manufacturers of goods, sellers of goods online, and those who peddle software and services to both groups. Amazon, the millennial-cute Etsy, the bargain shopping app Temu, the fast-fashion retailer Shein and even Google and Meta — all are dependent on millions of China-based sellers. In 2023, Temu, purveyor of a huge range of goods, from mittens to mobile homes, became the single largest buyer of ads on Meta, The Wall Street Journal reported last year, where its parent company, PDD Holdings, is one of the largest buyers of ads on Google. (Temu disputes the amount spent.) Analysts estimated that Shein spent $200 million on Facebook and Instagram ads in just the third quarter of that year. It would not be such a stretch to say that Amazon is as much a Chinese company as an American one: More than half of its top sellers are in China, and the fees these third-party sellers pay to use Amazon’s marketplace are one of its largest sources of revenue. This dynamic explains why the stiff China tariffs imposed by Mr. Trump are unlikely to achieve his goal of returning manufacturing jobs to the United States. Instead, the tariffs will force Americans to pay more for the same prosaic goods they’ve always gotten from Amazon. They will also push the Chinese Amazon ecosystem to broaden its horizons and, in doing so, strengthen China’s economic power throughout the world. There are over 100,000 Amazon sellers in the city of Shenzhen, a bustling metropolis just north of Hong Kong where the Pearl River estuaries empty into the South China Sea. Many smaller companies sell ordinary products (plastic water bottles, rubber hoses, Christmas lights) under obscure, even bizarre, brand names. Other manufacturers are Goliaths. The Chinese electronics manufacturer Anker, founded in Shenzhen to create replacement laptop batteries but quickly realigned to make charging devices for electronics, has about 5,000 employees and $3 billion in annual revenue. Sign up for the Opinion Today newsletter Get expert analysis of the news and a guide to the big ideas shaping the world every weekday morning. Amazon shoppers’ loyalty is typically not to any one seller, but to Amazon itself. Once they arrive at Amazon’s website, shoppers overwhelmingly prioritize what Amazon shows them first. Given this, Amazon shoppers may not notice the impact high tariffs will have on smaller sellers, which tend to lack the capital and resources to absorb such instability. Similar to what happened in the summer of 2021, when Amazon abruptly suspended tens of thousands of Chinese stores it suspected of buying fake reviews, the companies that fail will be swiftly replaced and forgotten. American shoppers are more likely to notice higher prices for their goods. The vast majority of Amazon products, for instance, are made in China. Many American Amazon sellers source their products there. They, like their China-based counterparts, will eventually be forced to raise their prices because they have such low profit margins as it is. Most economists dismiss the idea that the tariffs will help bring manufacturing jobs back to the United States. Some question whether America should even attempt to draw them back. The Chinese government has spent decades making massive investments in education, infrastructure and research. And while the cost of Chinese labor has gone up, it is still significantly lower than the cost of American labor. Exemptions announced over the weekend for smartphones, computers and other electronics — promptly followed by cautions that they may well be temporary — have caused more chaos and consternation. Over the medium to longer term, American tariffs could benefit China. There is evidence that many Chinese sellers avoid tariffs by employing third-party companies that conceal the full value of their goods or their place of origin. Goldman Sachs estimates that such practices helped Chinese businesses evade $110 billion to $130 billion in tariffs from the first Trump administration. Many American sellers who import from China say these sleights of hand put them at a disadvantage. And if the tariffs push the United States into a recession, consumers will be looking to save, a shift likely to benefit Shenzhen’s many Amazon sellers who specialize in inexpensive goods. Plus, tariffs create a strong incentive for Chinese sellers to try to sell their goods elsewhere. For the past two years, their government has been calling on businesses to chuhai, or go global, and expand to Africa, Latin America, and Central and Southeast Asia. Amazon introduced a distinctive kind of globalization that made the Shenzhen ecosystem possible. And as the tariffs drive China to globalize in the rest of the world, this ecosystem, which relies on Amazon’s massive platform and data for its survival, can lead the way. There’s a reason the Chinese government partnered closely with Amazon for the past 10 years. Chinese sellers’ global push will also most likely benefit from advances in artificial intelligence that will allow manufacturers to produce and manage more products, translate their advertising into different languages and research new overseas markets more effectively than ever before. In the past, sudden disruptions to China’s global e-commerce industry have accelerated innovation.In Shenzhen, Amazon’s 2021 mass suspension of accounts still feels like an active trauma. One businessman who told me about it when I visited last summer almost wept. But it was also a key reason that many merchants migrated to Temu as it began pouring money into expanding into the United States. Temu launched in September 2022. By the end of 2024, analysts estimated that Temu had sold over $50 billion of goods, and Apple confirmed that Temu’s app was the year’s most downloaded on iPhones in the United States; according to Similar Web, a data analytics platform, in February 2025, Temu’s U. S. website received almost one billion visits. Then there’s the Trump administration’s decision to end an exemption that has long allowed e-commerce businesses to ship packages worth less than $800 into the U.S. duty-free. Although the shift will hurt online sellers like Temu that specialize in selling inexpensive goods, the company anticipated the change and had already begun encouraging merchants to send larger shipments to warehouses in the United States, rather than selling directly to customers. That is driving the growth of Chinese third-party logistics companies, often owned or operated in partnership with friends and relatives in the United States. So perhaps it makes sense that so many Shenzhen merchants seem to admire Mr. Trump as a businessman, if not as a leader. Their affection, as I understand it, is complicated, as their admiration is now tempered with upset at his new tariff regime. Some tell me that the fondness for Mr. Trump is mostly a joke. But many share a sense that, however painful they may be in the short term, the tariffs will eventually spur China to assume its rightful place as the world’s leader and the beacon of a new phase of globalization that’s no longer centered on America. On Taobao, a Chinese domestic e-commerce platform, you can buy a ceramic statue of Mr. Trump to bring good luck to your business. The original is called Xi Tian Dong Fo Tu Lan Pu: Trump, the all-knowing Buddha of the West, or Western Heaven. Now, there are knockoffs on Amazon for $45 to $50 from storefronts with names like Nagelbag and DFGHJ. With Comrade Trump at your side, or solemnly meditating on your dashboard, the future ahead is bright.