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China's Influence in Latin America

China's Influence in Latin America

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We Don't Need No Stinkin' Questions...about the #Nicaragua Canal

posted Aug 15, 2013, 6:22 PM by Peter Joseph Moons   [ updated Aug 15, 2013, 6:24 PM ]

We Don't Need No Stinkin' Questions...about the #Nicaragua Canal

August 15, 2013

Comments by Peter Joseph Moons

     Some things just do not sound right about the proposed canal that will slice through Nicaragua.  An insightful article makes some very interesting accusations.  First, the canal's estimated cost of $40 Billion USD is likely low-balled.  And why so?  Likely, this cost would appear more 'sellable' to outside investors as well, the Nicaraguan Congress, and the NIcaraguan people.  A higher amount, such as in the hundreds of billions, would likely be too shocking to fathom, considering the GDP of the country is only $7.6B.  This GDP is one of the lowest in Central America, even lower than El Salvador and Honduras.  In this respect, $40B is enormous, though, of course, the funds for the project would come from Foreign Direct Investment.  

     Another fact the Lynch surfaces is that this canal proposal is not new.  Nicaragua has a long history of toying with a canal; all of them have gotten no where.  However, as Clifford Lynch also mentions, there are new ships coming out that exceed the capacity of even the new third set of locks in the Panama Canal.  This point is very curious in and of itself: The people and government of Panama decided to enlarge their nearly 100 year old canal and when complete, the new locks will already be obsolete.  Maersk's new ships, the Triple E, will be "[f]our-hundred metres long, 59 metres wide and 73 metres high" -- enormous, and wider than the new locks in Panama's canal.  If Nicaragua's canal is big enough to accommodate these leviathans, then they will have the market cornered for Asia to Atlantic shipping routes.
Maersk's Triple E Ship

     The proposed waterway, though, may not even be completely 'wet:' the canal may very well be a combination of ports connected by waterway and railroad.  While the world's largest ships may not cross the isthmus of Central America, though  they will be on the high seas.  So a new question to ask is: Does the HK Nicaragua Canal Development Investment Company even know the Triple E will be sailing in the next two years?

Copyright © 2013 Straterian LLC

#China's Construction Projects Often Fraught with Risk.

posted Aug 13, 2013, 2:51 AM by Peter Joseph Moons   [ updated Aug 13, 2013, 3:07 AM ]

Shoddy is as Shoddy Does: The Risk of Chinese Construction Projects

August 13, 2013

Comments by Peter Joseph Moons

     Let's face it: China has a reputation for building projects that sometimes fall down in dramatic fashion or are so poorly done, re-work is required to improve a building’s integrity. Moreover, when China itself suffers earthquakes, these temblors often bring down major and multiple buildings. In Sichuan, China, a quake killed “5,335 students,” and many were in buildings considered less than structurally sound. Overseas, the government of Tanzania is claiming the Chinese firm, Beijing Construction Engineering Group Ltd. performed shoddy work that must be re-engineered. At a major airport project in Zanzibar, there were claims of because of “dishonesty in contracts [and] big architectural mistakes” for an “international airport project.” Not a good way to leave a positive impression elsewhere in the country or on the continent, in which China apparently seeks to be a major economic investor.

Mongolian Games Stadium Collapse


     Major construction projects done in China, or overseas by Chinese construction/construction management companies, that collapse are well known; such catastrophic events capture the media's attention and seemingly come as a surprise. However, there are likely residents, local politicians, construction workers, or managers who, effectively, 'knew' something was amiss before a collapse. One story of such shoddiness focuses on the unbelievably cheap doors in what appears to be an apartment building, which is bad enough. Unfortunately, the really scarey part appears in the last frames of the video, which show a long, wide gap between the building and its foundation. The knowledge of this dilemma probably did, and certainly now does, go beyond a few residents.

     While so many failures of large-scale construction projects by Chinese firms are now coming to light and being cataloged, there may be a nascent ability to rate the companies (if they have been in business for some time) against an international standard. This would allow for a fair assessment in order to predict how a large-scale project may result. The time is right for this type of evaluation: In another gravity-aided disaster, a “30,000-seat stadium, costing £100 million and rushed to completion in nine months for [a previous] Mongolian Games,” came tumbling down shortly afterwards.

     Two more major Chinese construction projects are already on the horizon: the Nicaragua Canal Project and the plan by “Chinese conglomerate Broad build the world's tallest building (838 meters) in less than a year...near the central Chinese city of Changsha.” One Chinese company was recently identified for the quality of its product -- shoddy concrete -- used in, surprisingly, Changsha, China. While likely not the only concrete supplier in that city, the linkage creates bad optics because with China's history of construction failures, buildings like these could merely be accidents waiting to happen.

     Depending on China's domestic freedom of speech policies, one outlet for residents or neighbors of shoddily constructed buildings would be to 'name and shame' those responsible: the politicians or bureaucrats who approve projects, banks that finance them, companies that build them, and real estate agents that sell individual flats. Everyone in the chain has some level of fiduciary, and moral, responsibility. Better to do this now than when another high rise collapses or the sides of a canal catastrophically cave in.

Copyright © 2013 Straterian LLC

Bulldozed by Progress: How a #Nicaragua Canal Could Change Communities

posted Aug 6, 2013, 2:28 AM by Peter Joseph Moons   [ updated Aug 6, 2013, 2:29 AM ]

A New Canal in Nicaragua will Impact the Citizens in its Path

August 6, 2013

Comments by Peter Joseph Moons

     The much trumpeted canal through Nicaragua proposes to bring an economic boom to the country, but may spell doom to the average denizen. Nicaraguan citizens in the impacted zones of any new canal, port facility, railroad, container farm, etc will have to relocate, of course, and along with them, their established communities and ways of life.

     Some serious questions the Nicaraguans should ask are these: How can construction occur without destroying communities? What compensation will inhabitants receive? Will the relocated really recover even if moved optimally? Who is going to profit most from a transportation link between the seas: the average Nicaraguan, national or foreign business interests, or elected representatives? This last question prompts the ideas of Jeremy Bentham's Utilitarianism: What is the greatest good for the greatest number of people in this situation?

     If the Government of Nicaragua follows the Chinese paradigm of the Three Gorges Dam project on the Yellow River, then the societal effects will be catastrophic for the average Nicaraguan. However, if so, the rest of the world may never hear of their plight for they lack a voice to express themselves, or worse, their concerns and tribulations from relocating may be silenced. Certainly progress needs to occur and usually does so at someone's or something's expense.

     The PRC's Three Gorges Dam endeavor displaced millions of people when the government relocated hundreds of villages. Communities, families, ways-of-life, and the collective heritage of millions were negatively affected. Likely, Nicaragua's government may have to expropriate or engage effectively in 'eminent domain' actions to acquire the surface area necessary for their canal's operation. Before the Nicaraguans put the first shovel to earth, they might best employ the mantra of carpenters worldwide: 'Measure twice, cut once.'

Profits, People, and the #PRC: the #Nicaragua Canal

posted Aug 4, 2013, 8:46 AM by Peter Joseph Moons

Profits, People, and the PRC: the Nicaragua Canal

August 4, 2013

Comments by Peter Joseph Moons

     The effects on Nicaraguan society, people and communities in the path of the canal will be great, no matter what the Nicaraguan Congress, Chinese Corporations, or foreign investors claim. The disruption to life in the future canal zone will be the cost for this endeavor, and will, unfortunately, be borne by those least likely to gain economically from the project. Every point at which the project requires the development of new infrastructure will cause a disturbance of some type. Most curious, according to media reports, is that the Government of Nicaragua approved the canal project prior to either a complete environmental study or a referendum of its citizens; the latter is what the Government of Panama did when deciding to pursue its 'third locks,' which will accommodate 'post-Panamax' size ships.

     The Government of Nicaragua can decide how to exploit its own territory for economic gain, as the government controls its sovereign territory. The pursuit of future profits from the $40B investment may likely negate any naysaying by the soon-to-be disrupted lands' inhabitants, certainly at least in the short-term. Indeed, the profits for the government could be substantial: contracts to foreign design, construction, management, and logistics firms (and their sub-contractors locally) are serious sums. The People's Republic of China (PRC) is known for offering grand concessions and huge engineering projects to countries in exchange for economic in-roads. With a Chinese firm appearing as the major player in this canal, the Nicaraguans should expect no difference.

     Considering that Nicaragua's planned canal may include two ports, one on either side of the isthmus, TEU container farms, two railheads, a railroad, and the 'wet' part of the route, there will be substantial areas affected. These include the geographic terrain, which now houses people, their farmland, grazing areas, and land left in its natural state – and some of the latter could also be contiguous with designated parkland or nature preserves. If work is started and later abandoned, the effects on the terrain will be long-lasting – and will appear more as devastation. Until recently, the cuts made in the earth alongside the present Panama Canal by the the French in the late 19th century were still there. The cleared, trenched, water-filled terrain served as a testament to man's failure to beat the heat, logistics, and engineering challenges of the day.

     What to watch for are any protests by defenders of Nicaraguan's indigenous/rural communities and those concerned with ecological impacts, done via virtual or live protests. To counter any discontent, the Nicaraguan government will likely engage in a huge canal promotion campaign, which would have to managed by foreign media experts with local input.

Copyright © 2013 Straterian LLC

Nicaragua's Canal

posted Jul 21, 2013, 7:01 PM by Peter Joseph Moons

Comments by Peter Joseph Moons, July 21, 2013

     Here are some thoughts on the latest iteration of the proposed Nicaraguan Canal.

     In terms of Adam Smith's market theory, competition is always beneficial. If another method exists to cross Central America, then the Panama Canal Authority will have the opportunity to see where they can compete in the shipping market more effectively. The Panama Canal can find ways to improve transit times and costs to shippers, and perhaps reduce expenditures through greater efficiencies. One wonders if the centuries old dream of a canal across northern Colombia – a dry/wet type canal – will now also be resurrected.

     Interesting is the idea that global shipping market has need for more routes to cross from the Pacific into the Atlantic. In this regard, two socio-technology factors come readily to mind. First, with the possible effect of '3-D Printing' already threatening cheap products from Asian manufactures, from plastics to clothes, there may be an actual decrease in shipping to some extent starting in ten years or less. Second, populations are dropping across the developed world; countries on the periphery are also seeking lower birth rates. Due to this factor, the desire for finished consumer goods may also drop in the aggregate, thereby also decreasing shipping volume

     Future posts on this topic will look at the effects on Nicaraguan society, people and communities in the path of the canal, and how previous large-scale construction projects by Chinese firms have fared in order to predict how this canal project may result.

Would #China defend its interests in #LatinAmerica? Possibility of Chinese Mil. activity increasing - Peter Joseph Moons

posted Feb 27, 2013, 12:28 PM by Peter Joseph Moons   [ updated Feb 27, 2013, 3:41 PM ]

Beijing War Prep -

Comments by Peter Joseph Moons

In his article, Bill Gertz describes how China is preparing to defends its interests, particularly the Senkaku/Diaoyu Islands.  

A different question needs to be asked regarding Chinese military power:  Is there a possibility that some time in the near future China will similarly seek to defend its interests in Latin America?

Chinese Personnel In Haiti post-earthquake

First, China's interests in Latin America are commercial -- but important nonetheless for Chinese manufacturers.  For China to engage in a defense of its port access at both ends of the Panama Canal, for example, these ports would have to be threatened by either the host nation, or from an external third nation.  The latter scenario is unlikely.  Moreover, multi-national exercises occur nearly annually using a defense of the Canal as a catalyst for combined naval activities.  So to purely defend commercial interests, China appears unlikely to engage militarily in Latin America, unlike the gunboat diplomacy of the US during the era of its Monroe Doctrine.

Second, alternatively, China is likely to engage in military activity in Latin America when its interests coincide with other nations and/or present a great public outreach opportunity.  Such was the rationale for China's anti-piracy patrol participation off the east coast of Africa in the 2000's: piracy is a global menace affecting legitimate commercial activities, including that of the Middle Kingdom.  Likewise, China's support to the relief effort after the 2010 earthquake in Haiti was astoundingly rapid and there have been Chinese police contributing to the United Nations Stabilization Mission in Haiti for years.  Participation in humanitarian missions is in every nation's interest, when the outcome is positive.

Expect China to continue to flex its military muscle more, especially as its foreign direct investment to, commercial exchange with, and resource extraction from Latin America increases, particularly when such actions can be done on a multilateral level.

#China's interest in #LatinAmerica is mutually beneficial, but U.S.'s economic influence waning in what was once its "own backyard."

posted Feb 25, 2013, 5:01 AM by Peter Joseph Moons

"China in Latin America: hegemonic challenge?" - 
Isabel HiltonNorwegian Peacebuilding Resource Centre, 20 Feb 2013.

Comments by Peter Joseph Moons.

China's economic contacts in Latin America are growing extensively, including into countries where contracts and connections were minor, such as Nicaragua and Bolivia.  In this geographic area, like in Africa, China is making long-term contracts to extract vital natural resources for use in Chinese manufacturing plants, gain access to ports and transit terminals, and, where beneficial to Chinese businesses, is improving infrastructure.  A difference with Africa, though, is the higher economic status of Latin American countries, which makes the import of finished Chinese products to this region more favorable.
Then Chinese Vice-President Xi visited Chile in 2011.

Curiously, the US filled this role as a core country expropriating resources from peripheral countries, and returning consumer or production goods in trade.  Of course, the era of the Monroe Doctrine ended long ago, perhaps in the early 20th century.  For decades, markets in Latin America were open to trade with the then-Soviet Union, followed by the European Union, and, since the 1980's in strength, Asia.  Certainly, China is filling the role of resource-extractor and major trading partner once dominated by the US. 

A corollary to Chinese state-run and quasi-state business arrangements is the political clout China is gaining from its engagement in Latin America.  Each new business deal is touted with great optics in terms of a signing ceremony, media attention, and promotion of the economic benefits the Latin American state gains.  While Latin Americans may not be rushing to learn Mandarin at their local 'China Cultural Center' sponsored by the Chinese embassy in their country, they are enjoying the employment earned from resource extraction and the selling of (comparatively inexpensive) Chinese products in their local markets.  

For its part, the Chinese are playing the games of capitalism and public outreach well.  Economic activity between nations can breed political favoritism.  The US, and the European Union, should note this possible trend, which may affect their political designs at some future date.  The arenas where Latin American states may favor China over the US include the United Nations, climate talks, World Trade Organization discussions, and in regional political bodies such as the Organization of American States.

In summary, China's economic influence in Latin America is significant, and will result in political benefits for China, as well.

#China is increasing investment in #LatinAmerica,..including a new #canal through #Nicaragua.

posted Jan 30, 2013, 3:03 AM by Peter Joseph Moons


Comments by Peter Joseph Moons:

Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua are increasing their trade with Chinese companies.  Among the new trading projects are ventures in oil, solar power, hydropower, and telecommunications including a satellite for a Nicaraguan company.  Much of the trade from Central America are agricultural products, which make the long journey back to China.  

This trade relationship fits China's paradigm: products and expertise flow from China outward, while foodstuffs, organic raw materials, minerals, and oil are sent to China.  Central America happens to have less raw materials to offer than South America, for example, so the trade is reciprocated in comestibles.

Of highlighted interest in Central America is China's interest in a trans-oceanic canal through Nicaragua, for which China inked a deal with the Nicaraguan government last year.  Long sought after, even before the advent of the Panama Canal, a 'Nicaragua Canal' -- if this dream comes true -- would compete with Panama's, possibly lowering costs for global shippers, and decreasing revenues for the Government of Panama, while increasing the same for Nicaragua...and China.

#China to exploit world’s largest #lithium reserve - in #Bolivia

posted Jan 28, 2013, 2:16 AM by Peter Joseph Moons


Comments by Peter Joseph Moons.

Bolivia's Uyuni Salt Flat, the "world’s largest lithium reserve" (per Pulsamerica) will soon see Chinese investors.  Both nations signed a deal to exploit the slat flat's lithium content.  Bolivia benefits as the nation receives external technology, extraction assistance, market distribution, an a revenue stream.  China, of course, makes another in-road into the developing world to exploit another limited natural resource.  Lithium, of course, is used in batteries of all types: from cellular phones to hybrid automobiles -- a market with no end in sight.

Interestingly, the Uyuni Salt Flat is an 'other worldly' place: one where the sky and the salt flat seamlessly merge:

The challenge for Bolivia is two-fold: Receiving benefits from this agreement with China in terms of technology transfer, return on investment, and infrastructure development, with, secondly, not destroying the pristine environment.  Of course, China and its companies can by their access to a highly prized commodity, likely to the exclusion of other investors encroaching on the lucrative Uyuni area.

More photos of this amazing corner of Bolivia are here

#China - How China's Influence in #LatinAmerica Affects US #National Interests - #pdftribute

posted Jan 18, 2013, 3:13 AM by Peter Joseph Moons

China's rising influence In Latin America affects the national interests of the US in terms of international relations, economics, and military activities.  By Peter Joseph Moons.

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