By: Denise Simon | Founders Code
From 2020 up to now, we in America have suffered through supply chain shortages in addition to the matter of ransomware of the Colonial Pipeline and now one of our largest meat processors.
A cyberattack on JBS, the largest meat producer in the world, forced the shutdown of American slaughterhouses, and the closures may be spreading. JBS’s five biggest beef plants in the U.S. halted processing following the weekend attack, equal to one-fifth of all of America’s meat production. Slaughter operations across Australia were also down and one of Canada’s largest beef plants was idled. The prospect of more extensive shutdowns is upending agricultural markets and raising concern about food security as hackers increasingly target critical infrastructure. Livestock futures slumped while pork prices rose. JBS told the White House that the cyberattack, like several previous ransomware assaults, probably originated in Russia.
There are shortages of chicken, chlorine, flour, lumber, computer chips, rare earth minerals like cobalt, rental cars, palm oil, truck drivers, diapers, and appliances to list a few. Just imagine the impact of pharmaceuticals via China.
Consider the supply chain dangers if sea shipping was slowed or stopped. Consider the Panama Canal. Why worry?
China is the short answer. And China hates the United States.
Beijing is currently the second or third largest trading partner with the countries of Central America. Chinese investment in Central America is present in infrastructure projects in Honduras, Nicaragua, Costa Rica, and Panama, and there are plans for further investment in El Salvador and Guatemala. Excluding a contemplated US $50 billion dollars in a canal project in Nicaragua, Chinese investment in Central American infrastructure has totaled approximately US $2 billion thus far.
In a further demonstration of growing ties between the PRC and the countries of Central America, Costa Rica, Panama, and El Salvador have each broken relations with Taiwan to establish diplomatic ties with China. Other countries in the region could soon follow suit.
Panamanian “Panda Bonds”
Sino-Central American investment is being actively pursued in Panama. The country is one of the nations in Latin America that is part of an ambitious program that Beijing has undertaken in the region.
The PRC’s “Silk Road” initiative is a trading and infrastructure plan that aims to connect Asia, Europe, Africa, and Latin America in the same way that the trade route existed during ancient times. In addition to this initiative, further Chinese investment in Central America will result from the Panamanian government’s issuance of US $500 million of “Panda Bonds” in 2018. Panda Bonds are Chinese renminbi-denominated bonds from a non-Chinese issuer that are sold into the Chinese market. Panama issued them in order to take advantage of China’s lower borrowing costs.