Archive for January 9th, 2011

Sunday, January 9, 2011

Latin America: Public Relations Challenges

Latin American leaders are concerned about China’s growing influence in the region, the Voice of Russia‘s (VoR) English service quotes a document reportedly made public by Wikileaks on Friday:

According to the mass media, the regional leaders reached the conclusion to that end following a 2009 visit to Latin America by the Chinese Vice-President Xi Jinping and Deputy Prime Minister Hui Liangyu.

The regional leaders feel that Beijing’s current strategy aims to assume full control of the world’s mineral markets.

Generally, the publication of classified documents by Wikileaks, started late last year, received mixed responses from Latin American leaders.

— I’ll roughly refer to some passages of the document in the following, but won’t link to it, as this platform apparently doesn’t allow links to there – they turn into links pointing elsewhere. Enter a searchword combination at google.com, something like “Shanghai scholars” “Brazil’s natural resources” “Need to Diversify Trade Partners”, and you should get there, or read the (apparently full) document at eats shoots ‘n leaves.JR

A US consular document from Shanghai, published on Friday goes beyond the Latin American mass media, and also quotes the Brazilian Consul General in Shanghai as saying that China’s strategy in Latin America was clear: it wanted to “control the supply of commodities”. Chinese scholars quoted addressed an image problem China was facing in Latin America, and Chinese problems with unionized labor. Things were easier for Chinese business in Africa, since Africa’s institutions and regulatory environment were less well-developed than Latin America’s.

The views of Argentina’s Consul General in Shanghai come across as notably friendlier. However, he is also quoted as saying that “real investment” from China in Argentina only started five years ago, was only growing at a “modest pace”, and the examples he is said to give referred to a rather diverse set of projects, including a motorcycle factory in Buenos Aires.

In December, Inácio Lula Da Silva, then still president of Brazil, expressed his indignation about the arrest of Julian Assange, one of the Wikileaks founders. Nothing was done about this offense against a man’s freedom of speech, he said, according to this video, “of a guy that was bringing to the public a little mess made by some ambassadors”.

Stay tuned, Lula.

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Related
Strategic Commodities, October 26, 2010
Xi Jinping criticizes his Critics, February 18, 2009
JR-Tag: Africa »

Sunday, January 9, 2011

Li Keqiang’s Germany Visit: Industriousness and Wisdom

Li Keqiang (李克強), vice chief state councillor and likely to succeed his boss Wen Jiabao next year, is currently on a European tour. After visiting Spain and Germany, he will arive in the UK today.

According to Li, “China remains the world’s largest developing country”. Although China’s economy belongs to the world’s biggest, it is ranks as the world’s 100th in terms of GDP per capita, Li wrote in a guest editorial for Germany’s Sueddeutsche Zeitung (Munich), published on January 5. Some of the usual artificial honey is included, too:

Germany is known as the country of philosophers, scientists, and musicians. While the Germans’ industriousness and wisdom enjoy the admiration of the Chinese, “Made in Germany” is greatly popular with Chinese consumers for high quality, excellent technology, and innovation. The Chinese have fond feelings for the Germans. During the Expo 2010 in Shanghai, more than four million Chinese people have visited the German Pavillon , and even more did that online, or by watching television. The first prize in the category of implementing the expo theme’s concept helped to make the Chinese understand Germany better.

And

Exchange and cooperation on culture, science and technology, education, health, and justice, are bearing rich fruit.

Li lists the bilateral homework, as he sees it:

We have to work to maintain an open market, promote liberalization and facilitation of trade and investment, advocate the resolution of economic and trade disputes by consultation, and to fight against protectionism of all kinds. We hope that the EU will ease its restrictions on the export of high-tech products to China. It is essential to bring the international system of trade and finance to perfection, and to shape balanced and sustainable trade relations.
[…]
We welcome more foreign investment in China, especially in the fields of modern agriculture, new and high-technology, energy efficiency and environmental protection, new energies and new material. We encourage high-performing and creditworthy Chinese enterprises to invest more abroad. At present, Germany’s investment in China are only at two per cent of its foreign investment in total.

The most notable point seems to be his case for resolution of economic and trade disputes by consultation. Mere consultation requires a degree of good faith which is hardly ever there. Consultation may help to – occasionally – ease the degree to which the Chinese-foreign playing field is tilted in China’s favor, but it won’t do the job as promptly and impartially as arbitration can, provided that arbitration remains accepted and acknowledged, even when it really matters, in times of differences and conflicts.

There are good reasons not to ease restrictions the export of high-tech products to China. For what can be exported, and for the technology transfer which is required for investment in China, foreign companies are taking more than a fair share of risk already.

In certain fields, and in all those where a foreigner has more know-how, investors have to find Chinese partners for joint ventures. To get permission from the authorities, they have to describe the technology in great detail and the documentation then becomes state property,

the Voice of Germany (DW) quotes a lawyer who is specialized in national and international joint ventures. The procedure helps to weaken the foreign party’s rights to its own patents.

The head of the Association of German Chambers of Commerce and Industry’s Asia-Pacific Division, Sabine Hepperle, also quoted by DW, looks at China’s precondition for foreign investment – technology transfer – much more benignly:

[…] German companies would not have a problem on the Chinese market, despite the restrictions, as long as they remained one step ahead.

Which is quite a shaky undertaking. Two per cent of German foreign investment going to China is, under such circumstances, no small number. Not every German company is Siemens-size, and can afford to lose a complete field to a competitor without going out of business altogether.

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Related
UK State Visit, BBC News, January 9, 2011
A Model and an Outline, January 4, 2011
Just a little bit longer, June 16, 2010
No more Development Aid, Nov 2, 2009

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