Institutions and Competition

Is China still the "big dog" in Brazil and Latin America?

February 21, 2018

UPDATE 4 JAN 2019 Regardless of how much US secretary of state Pompeo urged Brazil to walk back its relationship with China during his recent visit to attend the inauguration of president Jair Bolsonaro, the official Brazil government news agency reports that a recent study by conservative Getulio Vargas Institute (GVI) indicates that China remains the top destination for Brazil exports. According to GVI 26.3% of all Brazil exports are shipped to China. By contrast, Brazil exports less than half that amount, 11.9%, to the United States, making the US the #2 destination. No matter how much US president tweets his praise for Brazil's new leader, and their "special relationship" it is not likely Brasilia will take advice from Washington to complicate relations with China, which is Brazil's #1 trade partner.

UPDATE 21 NOV Citing few specifics, Financial Times in London is reporting that Brazil vice president-elect General (ret.) Hamilton Mourau has suggsted a "balanced relationship" with the Communist government of The People's Republic of China. The PRC has for several years been Brazil's #1 trade partner. After Army reserve captain Jair Bolsonaro won the run-off vote for president, the incoming leader had harsh words for China as he and his sons amped up their views on Brazilian nationalism and Brazil as a major power. While Mourau's call for balance can be interpreted as sending a message of Brasilia willing to engage in new dialogue with Beijing, it is likely that Beijing's notion of "balance" in political and economic relationshipswith bilaterals is not now and is unlikely to be the same view of "balance" that the nascent Bolsonaro regime is trying to package and brand for "retail politics."

UPDATE 7 OCT Cooperating wiith China, Argentina a global leader in soybean production, will use genetically modified soybean traces to help increase productivity, boost foreign currency earnings and make the beans less likely to be contaminiated by pesticides like Roundup (glyphosphates). The growing China-Argentine cooperation takes genetic crop modification to "the next level" and could put more economic pressure on independent small and medium size farms worldwide.

UPDATE 4 MAY After U.S. president Trump cancelled his much awaited visit to the "Summit of the Americas" public relations event in Peru in April and vice president Pence was sent "down there" in his stead, it was announced that Pence would visit Brazil this month. According to Reuters (and other Western media outlets) that visit would have included Brasilia, Rio and Manaus. Now, Reuters (and other Western media outlets) have announced that that trip has been postposned and that the visit will be rescheduled sometime in the near future. The "official story" is that VP Pence is needed in Washington to provide support for the planned historic meeting between president Trump and North Korea leader Kim. The "postponement" helps reinforce the notion held by many business and political leaders in the Southern Hemisphere that official Washington continues to assign a low importance level to "Latin America." More importantly, it provides yet another signal that Trump's Washington is eager to engage in a trade war with LatAm nations, and with China, as it has already done with Russia. Perhaps with all the fallout from the Lava Jato corruption trials, and urban guerrilla warfare in favelas and elsewhere spotlighting the money connection between drug lords, cops and politician, this isn't a very good time for a senior U.S. official to visit Brazil. The situation becomes more complicated now that president Temer's close ally, billionaire "soy king" and agriculture minister Blairo Maggi has just been put under investigation for corruption. For its part, China can become a more important player in the "hemispheric economy" simply by doing what it has already been doing, namely, helping to stabilize nations whose social fabric and state infrastructures are being eroded by predatory free market policies that provide a milieu for international extremist organizations and continue to promote historic class conflict.

UPDATE l4 April For those who are unaware, Havana Times and other MSM are reporting that outgoing Cuba president Raul Castro did not attend the "summit" in Lima, Peru, sending his foreign minister in his stead. Miami Herald and other western media are now referring to the Lima event as a "business summit" and "business event" rather than a serious government-to-government summit that shapes world events within the context of realpolitik rather than the bluster of neoliberal trade war sabre rattling. Reuters reports, for example, that controversial US commerce secretary Wilbur Ross told summiteers in Lima that the US will not cede leadership in Latin America to authoritarian regimes (China). Apparently his scriptwriters forgot that Latin America is supposed to be led by Latin Americans.

UPDATE 13 April China's view, voiced by its ambassador in Lima, that the Peru "summit " not become a platform for negatitive and counterproductive dialogue about Beijing-Washington relations, may dashed now that the NY Daily News and other US media is reporting that president Trump's son-in-law Jared Kushner, will be attending the event along with his wife, Ivanka Trump. Mr. Kushner, who is a close adviser to the US leader, has the ear of the president more than does Pence and because he is higher up on the Trump power curve, Kushner can "free lance" comments supporting Trump's inflamatory or concilatory tweets and statements regarding free trade, Venezuela, the Trans Pacific Partnership, etc, with the full protecoction of the White House apparat. Something VP Pence is unlikely to do.

UPDATE 12 APRIL In an action that helps facilitate opportunities for a greater political and economic opening for Beijing in "Latin America", the White House has announced that president Trump will not be attending the "Summit of the Americas" that starts tomorrow in Lima, Peru with the official reason given that he needs to focus on the Syria situation. Vice president Pence is being sent to the event, which is more of a public relations-gabfest that promotes the notion of an ïnter-American dialogue than it is a summit in terms of "realpolitik." Since the days of the Eisenhower administration, the sending of a US vice president "down to Latin America" has symbolized to Latin populists and elites the relatively low importance level Washington assigns to the region, A rather vapid op-ed published in the New York Times by apologists for the inter-American dialogue community suggests that Trump's idea of Latin "policy" is a zero-sum game. The game will "reward" Latin leaders and businesses who give preference to US policies and business deals over China, going so far suggest that Trump may seek to "reimpose" the Monroe Doctrine in the region. This sort of typical Trump "acting out", this blogger feels, will further diminish the ability of the US State Department to articulate balanced statecraft in a region where Trump has already called a few nations "shithole democracies". Meanwhile the jailing of former Brazil president Lula (finally) has created some divisions among Latin nations. However, these concerns will not be discussed at the Lima, Peru event, particularly since president Temer's Brazil could experience a profitable 25% increase in the sale of uncrushed soybeans to China if Trump decides to use food as a weapon and cut off US soybean exports to China. Reuters reports, meanwhile, that China's Ambassador to Peru advises that Latin nations be kept out of trade disputes between Beijing and the United States. UPDATE ENDS

UPDATE 6 APRIL A former president of the Workers Party (PT) says Lula will not comply with the quest that he turn himself in to authorities later in the day. Brazil media reports say that Lula is somewhere inside the Metallurgical Workers headquarters building in a suburb of Sao Paulo and that throngs of workers are starting to surround the building. Celebrities and leaders and officials of nations who support Lula's latest bid for habeas corpus are becoming more active on social media. Law enforcement and military must now consider option that they may have to storm the building and extract Lula in the name of justice, which could result in a bloodbath and political instability. The UN human rights commission is preparing a resolution recommending that Lula being sent to jail is a violation of his uman rights. All in all, the entire series of events now resembles a telenovela, a media circus. The situation becomes more complex due to an apparent impasse between president Temer, and finance minister Meirelles over political issues and as a result of the impasse, the dollar continues to increase in value against the Brazilian Real, UPDATE ENDS



SECOND UPDATE: Judge Sergio Moro has ordered former president Lula to show up at the jail in the south Brazil city of Curitiba on April 6th no later than 18h00 Brazil time and one of his attorneys says he will comply with that order. According to Clarin in Buenos Aires, former Argentine president Crisitina Kirchner, who may also be jailed on corruption charges, said after she heard the news, that she is certain Lula will still win the presidential election in Brazil in October. All things considered, it is not clear whether Cristina's view of the situation is Latin American "magical realism" imitating politics, or politics imitating Latin American "magical realism."

EARIER UPDATE: Agriculture media reports that Argentina economy, which has been boosted (some say artificially) by robust soybean and corn market deals with China, is being hit hard by a drought, which could create additional problems for the "market-based reforms" being pushed by president Macri and some of his international supporters. The big winner for now seems to be Brazil,which is having excellent weather and expected to have a record year in soybean production, and which China is turning to more during the next several months in order to maintain secure line of supply of soy. This good news is a plus for Brazil's PR and social media-driven "brand". Still, circumspection is required considering that during a presidential election year where there is no clear "leader," experts and think tanks (some foreign) are being a bit too optimistic in their praise of what remains a problematic economy that is making an albeit tepid recovery. Insiders, considered part of president Temer's inner circle, were recently arrested (and releaspred a few days later) on corruption charges, which continue to cast a shadow over the unpopular leader's hopes of being chosen as the presidential candidate of his officially "rebranded" MDB (Democratic Movement Party) which was formerly known as PMDB. It appears that Brazil's legal system will save Temer the horror of being indicted on a third corruption charge. The record soybean harvest can not help prospective "pre-candidates" as they jockey for position in the first round of presidential voting in October. Temer's finance minister, Henrique Meirelles is reported by Reuters as being a new entry in the presidential derby. He also served under former president Lula da Silva as director of Brazil's Central Bank (which is subservient to finance minister but has quasi minister-like independencen and perquisites. Mierelles is likely to join the MDB to promote political harmony and increase his political base. He has been a member of neoliberal PSD Social Democratic Party. If there is one member of Brazil's political and business elite who is responsible for maintaining a modicum of trust that undergirds the long standing special relationship between Brazil and the United States, it is Meirelles. He has had a long-standing business career, including the presidency of Bank of Boston and is well known in Moscow and Beijing. His family, from rural Goias state, has been active in Brazil politics for a century and it is safe to assume he knows where "all the bodies are buried." Update 5 April Brazil political gossip blog Painel is now reporting that Meirelles, who joined Temer's MDB party with the hope of running for president, is now rethinking his decision, unhappy that he is not being treated with the respect that, in Brazil, is associated with being a presidential candidate. Like president Temer's very low approval rating, Meirelles has polled a very low number of voters who say they would vote for him to elect himla president of Brazil. With justice system now making the possibility that former president Lula will go to jail in the next fortnight extremely likely, the media is engaged in playing a little maskirova game to project normalcy in markets and calm down the political-psycholgical situation, when, in fact, Brazil-style democracy is facing its toughest-ever challenge. UPDATE ENDS

UPDATE: An opinionator column at the Buenos Aires daily Clarin offers some reasons as to why feormer secretary of state Rex Tillerson was removed from his job, which historically has been considered as being that of Washington's "top diplomat." What the article does not say, however, is that the removal of the former oil man is likely to negate-- or set back-- items that were part of his five day visit to Latin America, which included a meeting with Argentine president Macri. Thomas Shannon, the #2 person at State and a longtime player in Latin American affairs resigned shortly before Tillerson's January Latin tour, further demoralizing the organization, which can be described as "rudderless." In April, Trump is expected to make a public relations visit to an international business summit in Peru, and to meet outoging president Santos in Colombia, where Washington "consultants" share with Colombian specialists a military-ready base not far from the border with Brazil. China, regardless of its long term goals in Latin America can become more opportunistic in short term now that it is elvident that U.S. Latin policy is yet another dimension of the Trump cult of personality. UPDATE ENDS

The Chinese "Year of the Dog" has just started and western media assets, including The Economist, are suggesting that Beijing is becoming the “big dog”in Latin America.

China is making multi-billion dollar long term food and energy security deals, and financing infrastructure projects, some of which imhport Chinese workers.

On the eve of his recent five nation tour of Latin America and the Caribbean (Mexico, Argentina, Peru, Colombia, Jamaica) U.S. secretary of state Rex Tillerson charged that the communist regime in Beijing seeks to dominate, rather than empower, Latin America.

Tillerson's tour, which combined eco-tourism (horseback riding in the Argentine Patagonia) with politics (martialing opposition to Maduro's cash starved Chavista regime in Venezuela) followed the high profile visit of Beijing foreign minister Wang Yi to Chile late last month. Yi used a UN conference as a platform to promote China-Latin America economic relations, and amp up China's Belt and Road Initiative.o

The short meeting Tillerson had in Buenos Aires with Trump friend, Argentina's president Mauricio Macri, was offset by China's finance minister Xiao Jie, who discussed substantive economic themes during his visit with the Argentine leader.

Not surprisingly, the "big dog China" meme got traction in Brazil, where Beijing has surpassed the United States as the #1 trade partner. Oliver Stuenkel, a popular Brazilian-German analyst-influencer with the neoliberal Getulio Vargas Foundation in Sao Paulo, is now prognosticating that Brazil's elites must adapt to “a China-centric world.”

Meanwhile, as Tillerson and Washington-friendly media assets push back on the notion of a "China-centric world", they are also busy promoting Russophobia throughout Latin America. Former presidential candidate and Obama secretary of state John Kerry once made the quaint mistake of calling the huge continent "our backyard." Some "deep state" enthusiasts in Washington think it still is.

Tillerson, and senior U.S.intelligence and national security officials have warned on multiple occasions that cyberwarfare units controlled by the Kremlin are busy disrupting the democratic process in Mexico, with the objective of helping leftist mayor of Mexico City (Distrito Federal), Lopez Obrador, win the presidential election in July. The prospect of Russian or proxy meddling has already created some concerns in neighboring El Salvador, which holds local elections next month and will elect a new president next year.

The media circus publicizing the alleged Russian cyberwatfare threat to Mexico is also resonating in Brazil. Concerns over Kremlin medding in the nation's October elections could amp up the latent Russophobia that has long existed among some military cliques, and conservative factions of the political class. In addition, according to a study by Brazil's Veja magazine (and other sources) most of Brazil's electronic voting machines are obsolete "first generation" relics and their tabulation and vote tracking technolgies do not present a major challenge to hackers and hybrid warfare experts. Ironically, Russia's electronic voting machines are mostly "third generation" technology.

This calendar year, Latin America in the midst of what latinamericanists have defined for the rest of the world as an “election supercycle” with eight nations going to the polls; Brazil, Colombia, Costa Rica, Cuba, El Salvador, Mexico, Paraguay and Venezuela. If we go three months back to late 2017 and include Honduras and Chile, the “election supercycle” includes ten nations.

In simplistic terms, Washington and US-friendly media assets seem addicted to using Russia as the evil culprit that seeks to destabilize democracy not just in Latin America, but in other regions.

We hear a lot about "Fancy Bear," via international media, but what about the so-called "Big Dog?"

The respected U.S. international affairs publication Foreign Policy claims that China maintains a large military, and near-military network of collaborators (“contractors”) whose mission includes network defense and attack capabilities. In the popular realm, journalists, analysts and military generally call these capabilities “hybrid warfare” or “cyberwarfare.” In some western media the operation is referred to as People's Liberation Army unit 61398.

In addition, it has been known for some time that China also maintains large electronic intelligence operations in Cuba at the Lourdes, and Bejucal stations, in the metropolitan Havana area, which are shared with Cuban services.

China also maintains a strategic partnership with, and is an important shareholder in Bandeirantes, one of Brazil's major media companies.

A recent New York Times article reported on Russian activities, and the long history U.S. meddling in foreign elections, using some former U.S. intelligence officers as sources. But there was no mention at all of China. One might wonder why scoop-concious competitors of the New York Times, like Politico, The Daily Beast, The Intercept and others aren't asking why.

On a broader front that goes beyond election meddling, The New York Times has reported that the Trump administration "inherited" a cyberwar from the Obama administration that is designed to disrupt the North Korea guided missile program. In addition, an alarmist article in the London Express published a few months ago reported that North Korea is conducting a hybrid warfare or "cyberwar" operation designed to disrupt the U.S. commercial aviation system.

With the Amazon-owned Washington Post proclaiming that "democracy dies in darkness" maybe its time to expand coverage beyond the "Russian bad guy" meme, a story that sells a lot of newspapers and generates heavy online traffic, and shine some light on China's methods of influencing outcomes during the Latin American "election supercycle" that is unfolding during The Year of the Dog.



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