Thursday, December 24, 2009

Bolivians learn Chinese to boost their trade options


By Candace Piette
BBC News, La Paz

Norma Ramos has a bathroom and kitchenware stall in a busy commercial sector of La Paz, Bolivia's main city.

But she is no ordinary trader: she travels regularly to China to buy products to sell back home.

Proud of her new expertise, she has already made more than seven trips.

And, anxious to avoid the tyranny of translators and the expense of middlemen, she has taken Chinese lessons which, she says, have given her a great commercial advantage.

"I can now say - sell me this at the right price, and I want this kind of quantity, and I will return, and I will be able to speak more of your language next time," says Ms Ramos.

"And they have shown more interest and say they will give it to me cheaper next time."

Closer ties

A graduate from a language school in La Paz where class sizes for Chinese are growing each year, Norma Ramos believes the future will see ever closer ties with China.

Bolivian salt flats
Bolivia hopes it can meet China's appetite for lithium

"I think it would be great if we could cement our relations with China. We've seen how Peru has developed after it signed a free trade agreement with China," she says.

As ordinary Bolivians acknowledge the growing economic importance of China, China itself is noticeably increasing its programme of co-operation with Bolivia.

China has said it will construct Bolivia's first satellite, as well as build a fast electric trainline for the country. It is also collaborating on mining and energy projects.

But one of China's biggest interests is in Bolivia's rich natural resources, specifically its lithium deposits in the Uyuni desert, high in the Andes.

Technological thirst

Fifty per cent of the world's lithium is found in Bolivia.

Lithium - the lightest metal - is used in mobile phones and increasingly in the batteries of the new generation of environmentally friendly electric cars starting to come off the production lines.

Although China has its own deposits, it makes the batteries and has its own electric car industry, and will in the future need more lithium, analysts say.

But China has competitors in Bolivia. The push towards electric car development around the world has become a mad dash to lock in lithium mining deals with Bolivia.

Japan, France and Korea have been busy courting Bolivian President Evo Morales.

Mr Morales and his officials are talking to France's Bollore Group, South Korea's LG Group and Japan's Sumitomo and Mitsubishi.

Bollore has been asked to join the government's scientific commission on lithium.

Chinese language lesson
Lessons in Chinese are proving popular

The courtship of Bolivia by the rest of the world is particularly delicate because of Mr Morales's leftist ideology.

A former trade union leader of Aymaran Indian descent, Mr Morales has said he wants to unshackle Bolivia from dependence on foreigners.

Three years ago he nationalised the oil and gas industry, worrying foreign investors.

Mr Morales is insistent that profits and jobs from the country's rich mineral and natural resources should go to Bolivians and not foreign companies.

Guillermo Roelants, head of the government's lithium pilot project, says lithium is going to be key to Bolivia's future development.

"This resource is so big that it is of major importance to Bolivia, not only for this government, but for Bolivian history and Bolivian consciousness, the development of a project owned by Bolivia, developed by Bolivia and controlled by Bolivia," Mr Roelants said.

But there are concerns that Bolivia does not have the expertise to go it alone.

Open arms

Analyst Horst Grebe Lopez, who is a former mining minister, believes that the Bolivian government may be misguided in its plans.

"We don't have the technical know-how to work with lithium. You need hundreds of technicians and engineers and professionals. If we plan this right we will have the capacity to get to a certain level. But after that you need investment that currently Bolivia doesn't have. "

Bolivian President Evo Morales
China is not the only country courting President Evo Morales

With its attractive, cheap products for export, and its growing portfolio of development projects within the country, China may be winning over the Bolivian government on one level, but is it winning on the question of lithium?

Although the Chinese media have made frequent visits to report on the lithium project, Bolivia has yet to receive a formal approach from China, Mr Roelants says.

But, he adds, this could change, and if it did, China would be greeted with open arms. "We would welcome them onto our scientific committee," he said.

The Bolivian government is playing hard to get. It has the upper hand with its vast deposits of a precious resource.

It believes it can afford to take a slow approach, building a home-grown industry of lithium extraction and battery production with a partner of its choice.