China advances in the region by imposing its purchasing power and a Ricardian logic

Then you can notice the diplomatic juggling that Chile and Brazil must accomplish in order not to lose favorable trade conditions with the Asian giant and, in turn, not to rage the Trump government, who urge to request the exclusion of Chinese Huawei major technological dance projects, mainly (and almost exclusively) those related to the deployment of the fifth generation of mobile cell technology (5G).

In the Chilean case, the financial destiny of the country depends largely on copper sales. This product currently accounts for 10% of total GDP and almost 50% of the total exports of the trans-Andean country: $ 30 billion. Of this figure, 42% is red metal exports to China.

Until 2019, the price of copper has dropped significantly (mainly because of the adverse global economic expectations that led the Asian giant to demand less), which triggered alarms from the other side of the mountain: On July 18, COCHILCO (Chilean Copper Commission) announced a downward adjustment of its price forecast for 2019 (from $ 3.05 to $ 2.81 per pound) and for 2020 (from 3.08 to 2 , $ 90) because "global macroeconomic and geopolitical tensions continue, which has worsened global growth forecasts; and that China is facing a cycle of economic slowdown that has undermined expectations of metal demand in the short term. "

In this context, Chilean trade diplomacy is striving to increase shipments of wine, salmon and fresh fruit to balance the external balance. So the president Piñera leads the debate by trying to strengthen trade relations with China (which currently accounts for 28% of the country's overall exchange as its main trading partner). He tries to captivate his colleague Xi Jinping by implementing a "new and modernized free trade agreement and developing areas such as electromobility, 5G technology, space policy and collaboration in the fields of science, technology, innovation and entrepreneurship "(Press) Presidency after the first visit of the state of Piñera in China).

Similarly, the Chileans are redoubling their efforts, declaring through the intermediary of their vice-minister of foreign affairs, Rodrigo Yañez Benitez, that Huawei will not be excluded from future calls for 5G equipmentDespite the warnings received by Mike Pompeo, US Secretary of State, on "the dangers" posed by the technology of the Chinese firm.

At this point you can clearly notice the compromise that China implicitly proposes and that Chile accepts: basic products by infrastructure. It has logic on both sides: the Chinese advance in all markets with their technological offer, the Chileans do not have a large scientific and technological structure that they must protect in the context of a kind of commercial negotiation, and they are willing to progress in the markets of their products. primary supply and / or basic manufacturing (such as wines).

While Brazil, with its much more diplomatic and commercial game based on its size as a market and as a producer of goods and services, is also trying to maintain a balanced position between the United States and China, although He's hiding compromise which dominates relations of the Asian country with Chile: 82% of Brazilian soy (the world's largest producer with 83 million tonnes produced in 2018) is currently destined for China.

In this case, Huawei was chosen to carry out the first 5G tests by the TIM company in the south of the country (Florianopolis), thus concretizing the non-exclusion on the Brazilian territory of the famous Chinese technology company as a network supplier. fifth-generation mobile telecommunications. In addition, Huawei has also made progress in opening an Internet of Things (IoT) laboratory in the state of São Paulo and plans to build a smartphone badembly plant.

Finally, Argentina also presents a considerable horizon for its diplomacy. Given the importance of China as a trading partner and close relations with the United States (the main guarantor of the Macri administration to the IMF, for example), The Palace of San Martín must ride the inconvenience generated by its commercial decisions which, in the best of cases, will consider its own industry which (even with difficulties) has effective scientific and technological capabilities.

In this sense, not only does China hold 80% of Argentine soybean exports, but it also "seduces" our country. opportunity to open your market to soy flour, a problem that has failed over the last 20 years and which involves an increase in the value added of the local export mix and mainly the soybean complex (something very positive without a doubt). We know that in the arena of international relations, nothing is free, this decision of the Chinese aims eventually to pave the way for the entry of their technological champions (with Huawei in mind) in the vernacular telecommunications market.

While the United States maintains the same position vis-à-vis Argentina as in neighboring countries with respect to Huawei's participation in the mentioned arenas, and on the other hand hand, wink at possible purchases of Israeli (security equipment) or Korean (military aircraft) technology. The warnings about Huawei came in this case from South Command, addressed to the Ministry of Defense for alleged security threats that would be presented by Chinese telecommunication networks and equipment.

It could be considered that the three cases exposed would implicitly provide some sort of "basic products for technology"Adopted by China, using its current economic power and honoring the missing"Edible oilCreated by the United Nations in 1995 and allowing Iraq to sell its oil in exchange for food, medicine and others. This last program is turned off relatively quickly; The one proposed by China seems to last much longer.

(*) Analyst in international economic relations, technology and geopolitics. Director of ESPADE (Development Studies).