Chris Devonshire-Ellis Belt & Road Interview With Valor Brazil

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Discusses Belt & Road Activity in South America and the Impact of Covid-19 On BRI Projects Worldwide

Dezan Shira & Associates Chairman and Belt & Road Academic Chris Devonshire-Ellis has been interviewed by Brazil’s top financial and business newspaper Valor.

The article, which appeared this morning (August 26),  is based on the following questions concerning China’s Belt & Road activity in South America, which are reproduced in the original English text as follows:

What is the impact of the pandemic on the BRI projects in Latin America? What projects have been frozen or paralyzed due the pandemic?
In Latin America, only a handful of countries have signed up to China’s Belt & Road Initiative, with Chile, Uruguay and Venezuela being the largest economies to have done so. So strictly speaking only projects undertaken with these nations together with Bolivia, Ecuador, Guyana and Suriname can be considered as BRI. However China has also agreed infrastructure build on a bilateral basis with countries such as Argentina and Brazil, who have not signed up to the BRI. Overall, however, of the 2,500 BRI infrastructure projects China has participated in globally, the majority of them have faced delays in terms of safety issues and availability for workers during Covid-19, and there have been supply chain problems with shipping delays. But now, most of these are back on track and are in the process of being completed. Much of the phase one heavy construction is coming to an end; phase two construction such as putting in vertical constructions, power supplies and other utilities are mostly now underway or about to be. This means that from 2020 onwards, asset appreciation on infrastructure projects is beginning to kick in. You will start to see property and other asset values increase and this will create opportunities for investors.  

How much has been invested in the region in the BRI initiative? What are the main projects?
There are two ways to measure this; one the actual capital investment and secondly the trade resulting from this. When we take into consideration purely the countries that have signed up to China’s BRI in Latin America, then you’re looking at a figure of about US$50 billion. But this doesn’t include separate projects involving Brazil and other Latin American nations not part of the BRI. It’s hard therefore to put a precise figure and maybe just using the BRI as a benchmark isn’t the best way to get the full picture. But what China has done is state as part of its policy towards the region is that it expects to invest about US$250 billion over the next decade. So China’s policy is very clear. What is less clear is the reciprocal view; even with the Mercosur bloc, no specific policy as regards China trade and investment has emerged. That needs to be sorted out and is a Latin American multilateral policy issue to resolve. 

Concerning trade volumes, these have been increasing between Latin America and Asia, with just over 24% of all Latin American products now going to the region. That is up from 18% in 2017. Obviously the Covid situation has slowed things down but the overall trends and especially with China, India and ASEAN are all healthy and will rebound sharply post Covid. Now is a good time to be looking at those markets to take advantage of a global recovery. People will want to spend money and have a good time after this pandemic and companies producing high value consumer products should be working now to see how they can ride that wave.     

In terms of the largest BRI projects in Latin America – and I’m only talking about countries who have signed a BRI MoU with China in this – then the Chile-China underwater optic network is potentially a game changer, as this will help drive interconnectivity, trade, investment, as well as scientific and cultural exchanges between South America and Asia, the first time this will have happened. The cable begins in the Chilean city of Valparaiso, passes New Zealand, Australia and French Polynesia and connects with Shanghai. Of non-BRI projects China is involved with in the region, then the main ones are the improved rail connections that will link Bolivia and Peru together, meaning mineral production from Bolivia may be then exported to China through Peruvian ports. China’s COSCO appears to be facilitating this as it has purchased a 60% controlling stake in the Chancay terminal in the north of Lima for US$225 million. This is the first operation in Latin America for COSCO, which is already well known via its acquisition in the EU of the Greek Port of Piraeus. China is also funding a number of major Argentinian infrastructure projects, including two nuclear plants and a US$2.5 billion upgrade of its main cargo rail network. There is a lot going on. But to match China’s stated financial commitment, there needs to be an increased collective understanding by the respective Latin American governments and Mercosur about a combined strategy to get the most from China’s intentions and avoid wastage and white elephants. 

How the US-China dispute can influence the development of BRI in Latin America?
It’s an election year in the United States and there has already been much instability created by policies emerging from Washington. The more President Trump feels threatened by Joe Biden, the more he will seek to draw attention away from some of his policies by attacking China, Russia, Iran and anyone else he feels he can blame for poor ratings, and state he’ll be tough on them. That is quite likely, for the remainder of 2020 at least, to create small storms and maybe even additional tariff barriers and even sanctions. They have just done this to Hong Kong after all. So it’s certainly not going to get better in the short term. The thing is, if these actions work, and Trump gets re-elected he is likely to see this as a winning formula and keep beating up on China. In which case, businesses in Brazil with manufacturing subsidiaries in China sending product to the US may wish to seriously consider relocating their sourcing or manufacturing operations to other countries in ASEAN, or perhaps to India, who has just agreed an expansion of their Free Trade Agreement with Mercosur. So there are options. For businesses intent on selling to China, it makes no difference. And the China middle-class consumer market continues to grow. China and Asia overall are sound markets for Brazilian and Latin American manufacturers as long as they do their homework and know the costs involved and what to expect. Latin America has a combined middle class population of about 50 million. China has a middle class of about 700 million, India around 350 million and the ASEAN bloc about 150 million. That means for every single Latin American middle class consumer, there are about 24 in emerging Asia. Which makes it a great market to be looking at! 

Meanwhile, if Biden gets in then I think he’ll immediately start to roll back some of the excessive aggression of the Trump-era trade policies and international protocols recently dumped, and we may get back to a position of relative stability. Which after a dreadful 2020 and probably a poor 2021 is what we all wish for in business. But whichever way we look at it, short, medium or long term, Latin American trade and investment with China and Asia overall is set for an upwards curve over this coming decade. The question businesses in Brazil and the Mercosur region and its associate members is – how are we going to get into that supply chain? 

Dezan Shira & Associates have a presence in Brazil with their liaison office being run by Patricia Varejao. The firm assists Brazilian and Latin American clients establish trade, import-export and manufacturing throughout Asia.

Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The practice advises foreign investors into Asia and maintains 28 offices across China, India and the ASEAN region. The firm also maintains a Brazil trade desk. For more information please email or visit the practice at

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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at or visit