China has 23% of the world's population and 7% of its land available for cultivation. For this it scours the world, to fill the plate of its ever-growing urban middle class. It found a fertile ground in Latin America for obtaining soya, meat, fruit and fish. And to export the environmental and social impact.
A labyrinth of multi-coloured piled-up containers form a mosaic. What they transport remains hidden to the eyes, and are so tall that the river cannot be seen either. Cosmopolitan crew members speak in different languages. The smell of fish pervades everywhere, including the cruise ship terminal with the tourists. Controlled access, security and eyes that watch every step. The ground is huge, covering more than 100 hectares. Works twenty four hours. The port of Montevideo, Uruguay, is full of surprises.
This country of four million inhabitants has a port that could be compared to Port Royal of Jamaica in times of the pirates. It is considered to be the second in the world in terms of transferring suspicious fish catches that have been obtained illegally. Hundreds of ships, Chinese ships, are anchored here that make illegal crossings looking for squids, sharks and other species threatened by overfishing.
China, with more than one billion inhabitants, has double the world's average per capita fish consumption and has exhausted the majority of the resources it had in its territory. To fill its plates, it approaches the Pacific and the Atlantic with hundreds of boats that take advantage of the abundant resources and the lack of control in Latin American waters, using Uruguayan and other ports in the region.
Fishing, however, is only part of this story. With a voracious appetite, China turns up here in search of all types of foodgrain for its citizens who represent 23% of the global population as it does not produce what it needs with only 14% of its territory conducive for agriculture. It needs to feed its expanding middle class which, moreover, is changing its diet, needing more meat all the time.
"From nature to the table," Uruguyan meat in China
In addition to these fishing boats, there are thousands of Chinese ships ploughing our seas legally, filled with soya, meat, fruit, vegetables, wines and other products that travel in enormous containers to the other end of the world.
This is a small list of what comes and goes regularly because in the past two decades China has become the main commercial partner for the majority of the countries in the region.
“China looks for the best for its population but someone is opening the door here,” says Ariel Slipak, economist and professor at the Universty of Buenos Aires.
“The power (China) is drawn by natural resources and foodstuff. Our government sees in it the lender and the invester that has already displaced the United States and Europe. This commercial relation not only implies businesses: it also changes our productive models. It has permitted the consolidation of the agro-extractivist model. Record prices for foodgrain, primary material and an extraordinary profitability has combined with the restoration of the primary economy and environmental and social conflicts, installing an asymetric dynamism, to say the least. China externalises environmental and social problems. We are not only exporting soya and meat but also water and natural ressources,” warns Slipak.
China knows it cannot feed itself on its own. It tried but ended up adjusting its plans to reality. In 1996, it had the objective of producing 95% of the foodgrain and vegetables that it needed, but its entry to the WTO in 2001 and more open commercial relations ended up with it readjusting its targets, opening itself up to the international food trade. Now, aware of its limitations, that target of 95% has become 80%.China gradually started to provide itself with a huge quantity of agricultural and livestock products through international trade. “They went through diverse problems of efficiency, the environment and productivity,” explains Pablo Elverdin, strategy coordinator of the Group of Producing Countries of the South (GPS in its Spanish acronym).
“First they bought land, as they have done in Africa. Then the majority of the investments here failed for violating the laws on land ownership.While in Africa they got involved with land, in Latin America they unfolded the chains of production and commercialisation with large businesses, many of them state owned,” says Ignacio Bartesaghi, specialist at the Catholic University of Uruguay.
The most representative case was the purchase of Nidera, an agro-business multinational, and that of Noble, a Latin American soya producer, by the state-owned Chinese company COFCO in 2014 and 2016 respectively. Noble is in Brazil, Argentina, Uruguay and Paraguay in the soya, coffee, sugarcane, biodiesel and cotton sectors. Nidera is in Argentina and Brazil and has a large storage capacity and its own ports for transporting foodgrain and fertilisers.
China also buys transport, logistics and marketing companies, which reduces the commercial costs. The ones to stand out are the businesses of the Chinese state-owned CGC with Molin or Cañuelas (soya) and the investments in the region by Chongquing Grain Group, Sanhe and China National Heavy Machinery Corporation (agricultural infrastructure). They also make major investments in seeds and in the agro-chemical industry, a key market because China produces 40% of glyphosate used worldwide. The key was the purchase of Syngenta, of the largest agro-chemical businesses in the world by the state enterprise ChemChina in 2017.
More than just a buyer, in Latin America China has also become the one to provide money. Its role as source of lending and financing increased significantly, totalling $113 billion from 2003 to the present. Chinese banks finance, for example, the Belgrano Cargas trains in Argentina, agricultural machinery projects in Bolivia and waterways in the Amazon.
Its investments bring foreign currency but also opens the doors to social and environmental conflicts. It buys our foodgrain and also our water resources, soil nutrients and native trees. By producing here what is consumed there, China exports its emission of gases and greenhouse effects. It contaminates with its factories here and its trans-Atlantic transfers.
The boats sail away, the problems remain. In Brazil, the organisation Trase revealed that the Chinese imports of Brazilian soya caused the deforestation of 223,000 hectares between 2013 and 2017, equal to an area twice the size of New York city. Hundreds of businesses participate in the chain of production of Brazilian soya, but only six corner 70% of the export volume from the MATOPIBA region (an area of around 73 million hectares that expands across the Brazilian states of Maranhão, Tocantins, Piauí, and Bahía), in northeast Brazil: Agrex, Amaggi, LD Commodities, Multigrain, Cargill, Bunge and ADM. That is to say, multinationals.
Brazilian meat goes the same way as soya because 44% of the beef that China buys comes from Brazil. Steaks, chops and escalopes that are exported, 70% in all, are from two regions: Amazonas and Cerrado, where the agricultural and livestock expansion implies more and more deforestation. Trees are chopped down to make way for cows. Bio-diversity is lost and there is an increase in the emission of greenhouse gases.
The problem repeats itself in other countries. In Argentina, social and environmental organisations have alerted to a project of commercial agreement with China that would double pork production. The plan is to install 25 production units in north Argentina to generate 900,000 tons of meat annually. “The installation of these pig farms in the provinces with major deforestation in the previous decades will generate more pressure on the forests as it will significantly increase the demand of maize and soya to feed them,” warns Hernan Giardini, an expert on forests and member of Greenpeace. “It goes against the measures need to confront the health and climate crises.”
Lying in wait
Water is the other exctractivist frontier for China in Latin America. In the past decades, Chinese fishing activity has expanded at the global level: its fleet of long-distance boats increased from 1,830 in 2012 to almost 3,000 at present.
In the seas of the world, in the so-called “distant waters”, the boats with red flags look more than anything else for squids, which are consumed in China and also exported to the United States and Europe.
“It is impossible to control the boats, including with satellites, as they disconnect their tracking systems. You have to be on the spot and this costs governments millions,” explains Milko Schvartzman, marine conservation specialist. He estimates that at peak fishing season there are more than 300 of these boats in South Pacific while in South Atlantic there are more than 500. The governments of the region do not give them fishing licences, but this isn't a brake on them either.
The Chinese boats lie in wait, as if waiting to strike. They seem to be asleep or distracted but aren't.