24 July 2014. Santiago, Chile
thumbnail photo: Presidents Xi Jinping and Dilma Rousseff congratulate BYD’s chairman Wang Chuanfu on signing an agreement to build a plant to produce electric batteries in Brazil.
Chinese President Xi Jinping left Latin America yesterday, having attended the BRICS economic summit together with the Presidents of the BRICS nations: Brazil, Russia, India, China, and South Africa. The timing was such that the President of Russia and other heads of state were able to attend some of the World Cup football matches, even if Argentina’s president, whose team lost to Germany in the finals, was not on hand because of family obligations and a cold, she said.
President Xi’s trip was the culmination of a several years effort to increase Chinese investment in South America, a region which is rich is minerals and natural resources needed to fuel the growing Chinese economy. China is an important export market for South America. It is the 2nd largest trading partner with South America and is gaining ground on the USA, who is number 1.
President Xi made a symbolic but economically important stop in Cuba on his way back to China. There he was photographed with the aging Fidel Castro. Xi and Raul Castro met to discuss expanded commercial relations as well as extending credit to that Caribbean nation who is otherwise dependent on Venezuela for hard currency because of the 50+ year old American trade embargo.
Among the major achievements of the BRICS summit was the creation of the BRICS development bank to be located in China. The bank will make loans to developing nations, like the BRICS nations, and others. This bank will compete directly with the World Bank and International Monetary fund.
The Chinese President also met with and signed agreements with other Latin American leaders in the region including President Christina Fernandez of Argentina. He cast that country a fiscal lifeline by agreeing to a currency swap to put $11 billion USD into the Argentina’s coffers. Argentina is dangerously low on dollar reserves, especially as it has been forced by an American court to negotiate with certain bond creditors who did not agree to a previous debt restructuring.
China also agreed to invest in two hydroelectric projects in Patagonia and build a railroad, further deepening its economic ties with Argentina. Argentina is rich in oil and natural gas, but has not been able to bring much of that to market because of decades of political turmoil there. The American oil company Chevron has recently started working with Argentina to use hydraulic fracking to tap into the massive Vaca Muerta natural gas field. Two years ago Argentina seized the Spanish oil company Respol’s Argentina operations and has only recently agreed to pay for that.
There is other news on the energy front. While in Brazil, President Xi joined Brazilian President Dilma Rousseff and BYD Chairman Wang Chaunfu to witness the signing of a contract whereby the Chinese firm BYD will be the first Chinese manufacturer to open a battery factory in Brazil. This will bring BYD’s investment in Brazil to $400 million USD. Those electric batteries are needed to power BYD electric vehicles including those used for public transit.
BYD also announced that the city of Campinas, Brazil will be the site of their new factory to build long range all-electric transit buses. General manager Tyler Li said, “In the first year of operations  the plant will have a maximum production capacity of 1,000 electric business as well as all of their batteries.”
The city of Bogotá, Colombia has already taken order for 40 of these electric buses for the Transmilenio transit system. That city had made moving to clean or zero emissions vehicles part of its plan to deal with the severe air pollution problem there said to cost the lives of 5,000 people annually.
Pollution is a problem that afflicts other cities in Latin America, like Santiago, Chile; Mexico City; and Quito, Ecuador.
Bogotá has already agreed to purchase 800 diesel-electric buses from Volvo. (On this website, we will be studying alternative fuel vehicles in depth as a means to lower air pollution in Santiago and other cities. Since the Chilean government has stated a preference for all-electric vehicles over hybrid ones, that is where we will focus our efforts.)
Today the Chilean government submitted its plan to improve air quality in Santiago to the congress. A key part of that plan is to use electric vehicles to replace some of Santiago’s 6,500 buses, which are operating at the 14-year old Euro III emissions standard. Santiago is saturated with PM2.5 pollution that claims the lives of 4,000 persons annually. (PM2.5 means any particle of 2.5 microns or less, those are particularly bad for the health as they can lodge deep inside the the lung.) The congress will take up this issue now, which no doubt will be the target of much lobbying. Truckers are already calling for subsidies to convert their fleet. Chilean truckers already receive subsidies as diesel fuel is subsidized in Chile.
The plan to clean the smog-filled air of Santiago also calls for the complete elimination of wood-burning stoves. Fireplaces and simple wood-burning stoves are already prohibited in the city. But a 1993 law allows for so-called double combustion wood burning heating systems. 40% of the PM2.5 air pollution in Santiago today comes from such systems. So it is an obvious target, especially as burning wood in regular fireplaces has become a crucial issue in cities further to the south like Temuco where PM10 (smoot) pollution has reached critical levels as well. There the government has banned the use of firewood on certain days, causing problems for people who rely on that. Anyone visiting that region of vast forests knows the whole area smells like smoke when the weather is cold.
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