An Assessment of the Environmental and Social Impacts of Chinese Trade and FDI in Bolivia Pt 1

An  Assessment  of  the  Environmental  and  Social   Impacts  of  Chinese  Trade  and  FDI  in  Bolivia     China  has  become  an  important  partner  for  Bolivia,  both  diplomatically  and   economically.    These  two  aspects  of  the  relationship  overlap  frequently,  as  China   and  Bolivia  have  signed  over  400  cooperation,  aid,  and  loan  agreements.  In  terms  of   investment,  China  has  been  a  small  but  fast-­‐growing  partner,  currently  active  in   Bolivia’s  mining  sector  and  set  to  be  Bolivia’s  main  partner  in  developing  its  lithium   reserves.  Bolivia’s  exports  to  China  have  been  concentrated  in  minerals,  while   imports  have  been  concentrated  in  manufactured  capital  and  consumer  goods.   Despite  high  prices  for  metals  Bolivia  has  experienced  a  significant  trade  deficit  with   China.  Because  of  their  high  concentration  in  the  mining  sector,  exports  to  China   have  put  pressure  on  Bolivia’s  water  supplies.     After  exploring  the  relationship  on  an  aggregate  level,  this  paper  turns  to  case  study   evidence  in  the  tin  mining  sector,  with  the  participation  of  the  Chinese  firm  Jungie   Mining.  Our  research  reveals  that  Chinese  tin  mining  is  associated  with  water   pollution  and  conflicts  over  water  use.    Moreover,  the  case  of  Jungie  indicates  that   there  is  a  lack  of  capacity  and/or  willingness  to  enforce  and  upgrade  existing   environmental  laws  on  the  part  of  the  Bolivian  government.       Despite  the  fact  that  Jungie  Mining  is  in  an  early  stage,  the  firm’s  activities  have   already  been  suspended  due  to  water  pollution  in  surrounding  communities  and  it   has  already  clashed  with  local  communities  over  water  rights.    This  is  exacerbated   by  the  lack  of  action  on  the  part  of  the  Bolivian  government,  which  allowed  the  firm   to  operate  for  four  years  without  obtaining  an  environmental  license,  and  has  set  a   troublesome  example  by  delaying  construction  of  pollution  remediation   infrastructure  in  publicly  run  mining  operations.    Equally  concerning  is  the  new  Law   on  Mining  and  Metallurgy,  which  explicitly  gives  mining  priority  use  of  water.  This   new  law  also  gives  the  Mining  Ministry  authority  to  issue  environmental  licenses,   and  is  seen  as  opening  potentially  serious  conflicts  of  interest.   The  social  aspects  of  our  case  study  are  more  positive.  Jungie  has  actively  engaged   in  community  consultation  processes  and  has  respected  their  outcomes.  This  has   ensured  that  ore  processing  facilities  are  located  in  communities  that  want  them   and  away  from  those  that  do  not.  In  addition,  the  firm  is  operating  through  a  joint   venture  with  a  local  cooperative.  Such  an  arrangement  could  bring  new  technology   to  the  cooperative  sector  and  ensure  that  the  local  population  benefits  from  mining.   Bolivia’s  relationship  with  China  is  set  to  deepen  through  the  development  of  local   lithium  reserves.  This  prospect  brings  great  opportunities  for  the  national  economy,   but  our  case  study  on  tin  highlights  areas  of  deep  concern.  To  address  these  areas   and  prevent  their  repetition  in  future  lithium  projects,  we  recommend:         • Strengthening  the  enforcement  of  environmental  regulations  in  all  contexts, including  international  investments  and  publicly-­‐run  projects, • Foster  transparency  in  public  concessions  contracts, • Revisiting  the  Law  on  Mining  and  Metallurgy,  to  ensure  that  communities  and small  farms  have  access  to  sufficient  water  for  their  survival  and  to  avoid regulatory  capture  in  the  issuing  of  environmental  licenses, • Supplementing  the  accumulating  international  reserves  with  a  stabilization  fund or  sovereign  wealth  fund,  if  the  appropriate  institutional  structures  can  be established. 1. Introduction China’s  recent  impressive  economic  growth  has  had  important  effects  on   international  trade  flows,  in  terms  of  both  prices  and  volumes.  China  is  a  major   exporter  of  goods  (with  11.2%  of  total  world  exports),  the  second  largest   destination  of  FDI  (with  9%  of  total  inflows),  and  the  third  most  important  foreign   investor  (with  6%  of  total  flows)  (ECLAC,  2012).  In  addition,  according  to  ECLAC   (2012),  China’s  demand  for  minerals  and  raw  materials  in  general  has  important   impacts  on  international  commodity  prices.  Thus,  China  will  certainly  impact  the   future  of  international  trade  flows  for  Latin  America.  It  has  already  directed   increasing  FDI  flows  to  this  region  in  the  last  few  years.   However  there  is  more  than  just  economics  in  the  relationship  between  China  and   Latin  America;  there  are  also  environmental  and  social  issues  related  with  this   economic  link.  Empirical  studies  about  this  connection  for  the  Chinese  trade  and  FDI   are  still  scarce.    It  is  important  to  analyze  this  topic  for  the  Bolivian  case,  given  its   particular  environmental  and  economic  characteristics.  Certainly,  during  recent   decades  the  Bolivian  economy  has  shown  an  impressive  record  of  GDP  growth,  but   the  country  still  faces  serious  environmental  and  social  problems.       The  aim  of  the  present  study  is  to  analyze  the  main  trends  of  trade  and  FDI  flows   between  China  and  Bolivia,  determining  their  environmental  and  social  impacts.   Thus,  the  study  is  divided  in  three  parts.  The  first  section  briefly  describes  the   trends  of  Chinese  FDI  to  Latin  America.  Part  2  is  devoted  to  analyzing  the   relationship  between  Bolivia  and  China  considering  the  different  financial  linkages   they  have  to  each  other,  namely  loans,  donations,  and  FDI,  among  others.  Section  3   develops  the  context  of  the  case  studies,  presenting  an  overview  of  the  mining   sector  in  Bolivia.  Part  4  is  the  methodological  section  where  two  case  studies  from   the  mining  sector  in  Bolivia  with  Chinese  participation  are  evaluated  and  policy   implications  are  presented.  Conclusions  are  at  the  end.   2. Chinese  Trade  and  Investment  Participation  in  Latin  America During  the  last  three  decades,  China  has  become  a  strategic  international  trade   partner,  having  considerably  increased  its  relations  with  several  regions,  including   Latin  America  and  the  Caribbean  (LAC)  with  which  China  has  consolidated   businesses  links  through  bilateral  agreements  characterized  by  unbalanced   commerce  between  exports  and  imports  (Bittencourt,  2012).    According  to   Balderrama  and  Martinez  (2010),  since  the  1970s  China  begins  to  face  the  difficult   task  of  investing  outside  its  borders.    Chinese  FDI  in  LAC  increased  from  $200   million  USD  in  1975,  to  $916  million  USD  at  the  start  of  2000  and  to  $50  billion  USD   by  the  end  of  the  decade  (Balderrama  and  Martinez,  2010;  Nacht,  2013).     However,  China  is  not  only  deepening  its  relationship  with  LAC  through  the  market   mechanisms  of  trade,  loans,  and  investment,  but  also  through  cooperation.  China   has  a  solid  development  strategy  characterized  by  multi-­‐polarism,  multilateralism,   non-­‐interference,  soft  power,  pragmatism,  collaboration,  and  persuasion.     It  has  already  been  established  that  during  the  2000s,  the  investment  relations  of   Asian  countries  in  LAC  prioritize  the  extractive  sector  in  its  investments  (petroleum,   gas,  mining),  and  to  a  lesser  extent  other  productive  sectors.  It  is  a  relationship   characterized  not  only  by  partnership  but  also,  in  most  cases,  by  competition  in  the   international  markets  of  goods  and  services  (Correa  and  Gonzales,  2006).  In  general,   Chinese  FDI  continues  to  support  the  production  of  primary  commodities  in  the   economy  (returning  to  the  model  of  exporting  of  natural  resources)  of  LAC,  mainly   due  to  the  high  profitability  of  raw  materials  extraction,  with  environmental  and   social  impacts  which  are  denounced  from  different  sectors,  and  with  limitations  in   regulation  and  human  rights  oversight.    As  a  special  case,  Irwin  and  Gallagher   (2013),  observe  that  the  Chinese  mining  companies  are  often  portrayed  as   predators  regarding  environmental  and  labor  norms  compared  to  other  companies,   which  is  a  threat  for  LAC.       Chinese  Investment  In  The  Bolivian  Economy   During  the  early  1990s,  after  series  of  reforms  inspired  by  a  neo-­‐liberal  model  were   enacted  in  Bolivia,  economic  policy  began  to  improve  and  expand  international   insertion,  reducing  transaction  costs,  timelines  and  risks  related  to  the  movement  of   capital  (Rojas  and  Nina,  2001).   Flows  of  Foreign  Direct  Investment  in  Bolivia   According  to  Figure  1,  during  the  period  2000-­‐2013  FDI  to  Bolivia  shows  a   fluctuating  behavior,  recording  for  the  year  2004  $448.4  million  USD,  the  lowest   amount  during  the  period,  reaching  a  recovery  in  2008  due  to  the  increase  in  the   price  of  raw  materials  that  generated  greater  FDI  injection,  falling  in  2009  and   returning  to  growth  through  2013,  when  it  reached  $1,520  million  USD.   FIGURE  1:  Bolivia:  Gross  Foreign  Direct  Investment  Flows   1.75   Gros  FDI   Disinvestment  (negaQve)   Net  FDI   1.5   Millions  of  USD   1.25   1   0.8   0.9   0.75   0.7   0.7   1.0   1.0   0.7   0.7   0.6   0.5   0.25   0.2   0   -­‐0.25   -­‐0.5   -­‐0.1   1.3   0.4   0.4   0.3   0.4   0.5   1.5   1.5   1.4   1.0   0.9   0.7   0.6   1.5   0.7   0.4   0.1   -­‐0.2   -­‐0.3   -­‐0.4   -­‐0.4   -­‐0.3   -­‐0.3   -­‐0.3   -­‐0.3   -­‐0.4   -­‐0.2   0.0   -­‐0.2   -­‐0.75   -­‐1   -­‐0.8   -­‐0.8   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   Source:  Author`s  elaboration  based  on  INE,  BCB  and  United  Nations  data.     Origin  of  foreign  direct  investment   Disaggregating  by  country  shows  that  the  primary  revenue  source  of  FDI  from  2000   to  2008  was  the  USA  (with  46%  of  the  total),  several  countries  in  Europe  (with  28%   of  the  total),  and  several  South  American  countries  (with  17%).  China's  FDI  in   Bolivia  represents  only  0.09%  of  the  total  (Figure2).   Figure  2:  Bolivia  FDI,  According  To  Country  Of  Origin,  1999-­‐2008   Europe,  24.6%   LAC,  19.5%   Other,  0.4%   US/Canada,  32.3%   Intermediaries,   5.0%   China,  0.2%   Source:  Authors’  calculations  based  on  INE  data.  Note:  Intermediaries  include  common  pass-­‐through   countries,  including  the  Dutch  Antilles,  the  Bahamas,  Barbados,  Bermudas,  the  British  Virgin  Islands,  the   Cayman  Islands,  Liechtenstein,  and  Luxembourg.  “Other”  includes  multilateral  organizations.   The  share  of  China’s  FDI  in  Bolivian  economy  as  seen  in  Figure  3  is  quite  sporadic   with  small  financial  sums.  During  the  year  2000  the  first  Chinese  FDI  in  Bolivia  is   recorded,  with  a  value  of  USD  45  million.  During  the  period  2001-­‐2003  no  more   Chinese  FDI  in  Bolivia  were  registered.   China’s  FDI  presence  in  the  Bolivian  economy  did  not  return  until  2004,  with  a  share   of  USD  30  million  accounting  for  0.007%  of  the  total  FDI,  down  by  33%  to  the  figure   recorded  in  2000.  However,  from  2005  to  2008,  Chinese  FDI  in  Bolivia  increased   gradually  reaching  a  peak  of  USD  2.8  billion  in  2006,  which  represented  0.5%  of   total  FDI  for  that  year,  then  decreasing  by  38%  for  2008,  becoming  that  year  to  USD     1.8  billion.  From  2009  to  2013,  FDI  flows  came  mainly  from  Spain  (24%),  Brazil   (19%),  Sweden  (12%),  United  Kingdom  (7%)  and  the  USA  (6%).   Figure  3:  Chinese  FDI  in  Bolivia,  1999-­‐2008   3,000   2,836   2,500   Millions  o  fUSD   2,000   1,758   1,581   1,500   1,000   500   45   30   46   2004   2005   0   1999   2000   2001   2002   2003   2006   2007   2008   Source:  Authors’  calculations,  using  INE  data  2000  -­‐  2008.     Destination  Of  FDI  In  Bolivia    Overall  FDI  flows  have  been  concentrated  in  the  following  sectors:  oil,  mining  and   manufacturing.   In   the   five   years   from   2008   to   2012,   FDI   into   hydrocarbons   represented  an  average  of  39%  of  the  cumulative  total  during  that  period,  mining   24%,  and  manufacturing  14%.       Figure  4:  Destination  Of  FDI  Flows  In  Bolivia,  By  Sector   Total  FDI:   Mining   Hydrocarbons   Manufacturing   Other   7.8%   8%   7.0%   0.3%   5.6%   Percent  of  GDP   6%   3.1%   5.1%   5.1%   2.8%   4.7%   0.4%   2.3%   4%   0.8%   2.1%   2.3%   3.0%   1.0%   1.0%   2%   5.5%   5.0%   2.9%   1.6%   1.5%   0.3%   1.0%   0.5%   0.5%   1.1%   0.7%   1.6%   3.9%   2.2%   0.5%   0.6%   1.9%   2.1%   0%   0.3%   1.3%   1.1%   1.6%   4.3%   0.8%   1.0%   3.5%   1.6%   1.4%   0.9%   0.6%   0.8%   0.4%   0.9%   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012   Source:  Authors’  calculations  using  INE  and  BCB  data.     *  Production  and  distribution  of  electricity,  gas  and  water,  construction  trade,  hotels  and  restaurants   transport  storage  and  communication  financial  intermediation  and  others.   Beginning  in  2000  FDI  has  been  concentrated  primarily  in  the  hydrocarbons  sector,   reaching  around  $4623  billion  USD.  On  average  from  2000  to  2004,  FDI  to  these   sectors  represented  around  46%  of  the  total,  followed  by  other  services.  This  trend   is  mainly  due  to  both  sectors  having  been  capitalized  and  obliged  to  reinvest,  as  in   other  services  such  as  electricity  distribution  companies  transport  and   communications.     FDI  in  the  mining  sector  is  comprises  only  4%  of  the  total,  since  prices  of  minerals   did  not  provide  great  benefits  for  investors  until  recently.  However,  during  the   period  of  2005  to  2010  this  sector  began  to  respond  to  price  increases.  In  2012,   mining  accounted  for  14.5%  of  total  FDI  inflows.     Incentive  policies  to  attract  FDI   Bolivia,  through  reforms,  has  introduced  a  number  of  incentives  for  investment,   such  as  a  single  and  uniform  tariff  of  10%  applied  to  all  imports  of  consumer  goods,   and  a  tariff  of  5%  on  imports  of  capital  goods,  compensation  mechanisms  on  export   taxes  (to  ensure  tax  neutrality),  free  trade  zones  both  for  commerce  and  industries,   and  an  Investment  Law  that  stipulates  equal  rights,  duties  and  guarantees  to  foreign   and  domestic  investors.  Bolivian  law  prohibits  discrimination  and  guarantees   freedom  of  economic  activity,  provided  it  does  not  involve  unlawful  activity.    Other   incentives  designed  to  attract  FDI  include:  bilateral  agreements  to  promote  and   protect  investment  in  the  country,  economic  complementarity  agreements,  and   agreements  with  international  guarantee  systems.     Bolivian  Trade  Flows  with  China   Figure  5  shows  the  trade  flows  between  China  and  Bolivia  from  2000  to  2013.  In   2013,  Bolivia  recorded  a  trade  deficit  with  China  of  2.9%  of  GDP  ($880  million  USD),   a  decline  from  2012’s  peak  of  3.3%  of  GDP.  Recent  years’  trade  deficits  with  China   are  due  to  higher  imports  of  intermediate  products  for  industry  and  parts  and   accessories  of  transport  and  equipment.     FIGURE  5:  Bolivia-­‐China  Trade  Balance,  2000-­‐2013   5%   4.4%   4.5%   Imports  from  China   Trade  Deficit  with  China   Percent  of  GDP   4%   3.9%   Exports  to  China   3.1%   3%   2.3%   2%   1.7%   1.9%   2.5%   1.8%   1.7%   1.3%   1.3%   1.2%   1.2%   1.1%   2.3%   1%   0.3%   0.3%   0.3%   0.1%   0.1%   0.1%   0.2%   3.0%   2.9%   2.0%   1.6%   0.8%   0.8%   3.3%   1.4%   1.1%   1.2%   1.1%   0.5%   0%   2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010   2011   2012   2013   Note:  Data  are  on  an  FOB  basis.  China  includes  Hong  Kong,  Taiwan,  and  Macao.  Source:  Authors’   calculations  based  on  INE,  WEO  data.       As  shown  in  Figure  4,  this  trend  has  been  recorded  since  2000,  but  until  2005  the   gap  was  much  smaller.  Since  2009  the  deficit  has  increased  substantially.  This  is   mainly  because  much  of  the  Bolivian  exports  to  China  are  raw  mineral  materials,   while  imports  from  China  are  mainly  manufactures.  According  to  the  Central  Bank   of  Bolivia  (BCB),  between  January  and  November  of  2013,  Bolivia  exported  48   products  to  China,  such  as  silver  ore  and  concentrates  (33%  of  the  total),  unwrought   unalloyed  tin  (24%),  zinc  and  its  concentrates  (16%)  and  tin  and  its  concentrates   (7%).  On  the  other  hand,  the  country  bought  from  China  4,011  products  during  this   period,  among  which  stand  out  probing  and  drilling  machines  (3.5%),  motorcycles   (3.4%),  cell  phones  (2.8%),  and  herbicides  (1.9%)  (INE,  2013).   This  trend  has  major  consequences  for  the  manufacturing  industry  in  Bolivia,  since   over  time  it  is  losing  its  sales  position  within  both  the  national  and  international   market.  The  sale  of  Chinese  manufactured  goods  has  grown  exponentially,  calling   into  question  the  survival  of  a  large  number  of  small  and  medium-­‐sized  enterprises     in  Bolivia.  Another  serious  threat  bears  mentioning:  remaining  stuck  in  a   specialization  of  primary  exports,  characterized  by  very  little  dynamism.   Moreover,  considering  the  environmental  impact  of  this  trend,  according  to  Figure   6,  Bolivia  is  exporting  to  the  world  products  that  have  an  important  water  footprint,   implying  a  threat  to  the  environment.  Bolivian  exports  to  China  do  not  show  a   different  trend  from  overall  exports;  the  Bolivian  water  footprint  on  average  was   double  the  water  footprint  of  imports  from  China,  largely  because  of  the  trend   toward  primary  goods  in  the  economic  relationship  with  China.  Even  though  the   total  exports  to  China  do  not  show  a  significant  jump  between  2002  and  2003,  in   terms  of  water  intensity  there  is  a  notable  jump,  due  to  lower  export  value  but   higher  water  use  given  the  nature  of  Bolivian  exports:  minerals,  leather,  and  textiles.   In  2008  the  decline  in  exports’  water  intensity  is  not  because  a  lower  water  use  but   due  to  a  higher  value  of  Bolivian  exports  given  the  increasing  prices  of  raw   materials.   FIGURE  6:  BOLIVIA.  EXPORTS  ACCORDING  TO  WATER  AVERAGE  INTENSITY  (2002-­‐2012)   3.5   EXPORTS  TO  THE  WORLD   EXPORTS  TO  CHINA   3   IMPORTS  FROM  CHINA   M3/Real  USD   2.5   2   1.5   1   0.5   0   2002   2003   2004   2005   2006   2007   2008   Source:  Authors’  calculations  based  on  Water  Footprint  Network  data.   2009   2010   2011   2012       Still,  China  is  not  considered  a  key  market  for  Bolivia,  as  it  only  represents  2.1%  of   its  exports  in  contrast  to  Brazil  with  31.5%,  followed  by  Argentina  with  17.7%   (which  can  be  explained  as  a  result  of  Bolivian  gas  sold  to  Brazil  and  Argentina)   (INE,  2013).  However,  as  a  supplier  to  Bolivia,  China  ranks  as  the  second  largest   source  of  imports  with  13.1%  of  the  total,  after  Brazil,  which  represents  18.4%.   Bolivia’s  External  debt  with  China   According  to  data  from  the  Central  Bank  of  Bolivia  (BCB),  at  December  31,  2013,  the   balance  of  the  debt  in  Bolivia  reached  $5.0  billion  USD,  an  increase  of  14.34%  over   December  2012.  Over  the  past  13  years,  the  debt-­‐to-­‐GDP  ratio  has  fallen  from  53%   in  2000,  to  28%  in  2006  and  to  15%  in  2012,  before  rising  in  2013  to  17%.   Bolivia's  bilateral  debt  to  China  has  been  growing  since  2001  in  small  amounts   initially,  until  2006,  when  the  debt  with  China  was  $38.6  million  USD  (0.3%  of  GDP),   representing  an  increase  of  80%  in  absolute  terms  or  $17.2  million  USD  over  its   2001  level  and  in  2010  it  reached  $82.2  million  USD  (0.4%  of  GDP),  representing  an   increase  of  112%  in  absolute  terms.    This  trend  accelerated  during  the  last  few   years,  reaching  $430  million  USD  (1.5%  of  GDP)  in  December  2013,  an  increase  of   423%  in  absolute  terms  over  its  2010  level.  By  April  2014,  China  has  become  the   largest  bilateral  creditor  of  Bolivia,  representing  59%  of  the  total  of  the  bilateral   debt,  according  to  data  from  BCB.  This  growth  can  be  explained  by  the  affinity  that   the  Bolivian  government  has  demonstrated  for  China,  since  it  has  shown  support  for   Bolivia’s  process  of  political  change.       Figure  7:  Bolivia’s  Bilateral  External  Public  Debt  2000  -­‐  2013   4.5%   0.2%   4.0%   Percent  of  GDP   3.5%   1.0%   3.0%   2.5%   4.1%   0.3%   3.6%   1.3%   0.3%   0.3%   3.8%   0.6%   3.7%   0.5%   0.9%   0.6%   1.6%   0.5%   1.0%   1.6%   0.6%   2005   2.4%   1.7%   0.5%   0.7%   1.1%   0.6%   2.6%   1.5%   0.5%   0.3%   0.3%   0.7%   0.7%   0.6%   0.6%   0.5%   0.4%   0.3%   0.3%   2006   2007   2008   2009   2010   2011   2012   2013   0.0%   2004   0.7%   0.4%   0.7%   1.1%   3.0%   1.7%   1.0%   1.5%   0.5%   1.4%   1.5%   3.6%   3.5%   0.6%   1.2%   1.6%   2.0%   1.0%   TOTAL:   China   Venezuela   Brazil   Spain   Other   4.4%   Source:  Authors’  calculations  based  on  BCB  data.     Chinese  Bilateral  Aid  with  Bolivia   Relations  between  Bolivia  and  China  officially  began  in  1985;  following  the   establishment  of  bilateral  relations,  the  leaders  of  both  countries  have  reached   agreements  to  deepen  them.   An  important  area  of  cooperation  is  Chinese  aid.  According  to  the  Chinese  Embassy   in  Bolivia,  the  goal  of  the  funding  agency  of  China  is  cooperating  with  all   development  countries  with  which  China  has  diplomatic  relations,  within  the   following  areas:  agriculture,  water  projects,  war  equipment,  health,  culture,   education,  technical  cooperation,  drilling  and  environmental  protection.       The  types  of  cooperation,  all  funded  by  the  government  of  China,  are  classified  as   follows:   • Reimbursable  Financial  Cooperation:  these  agreements  have  a  term  of  10  years with   5   grace   years,   with   a   preferential   interest   rate   of   3%   for   loans   in   in Renminbi   or   15.1%   for   loans   in   USD,   subject   to   availability   by   the   Chinese government. • Reimbursable  Technical  Cooperation:  these  agreements  have  a  term  of  5  years  of use,  with  a  5-­‐year  grace  period  and  10  years  of  repayment,  without  any  interest or  commission. • Non-­‐Reimbursable   Technical   Cooperation:   these   agreements   are   grants   to support   human   capital,   technology,   and   equipment,   subject   to   availability   by   the Chinese  government. Within  this  framework,  Bolivia  has  signed  more  than  400  agreements  with  China,   including  economic,  technical,  and  agricultural  cooperation  and  financial  and   telecommunications  development,  and  even  assistance  in  energy,  mining,   infrastructure  and  food  security  issues.   During  the  last  few  years,  China  has  also  lent  equipment  to  the  armed  forces  of   Bolivia  for  the  development  of  a  communications  satellite,  supported  the   industrialization  of  lithium  reserves,  granted  $21  million  Yuan  ($3  million  USD)  for   the  execution  of  projects  of  investment  and  purchase  of  capital,  China-­‐made   machinery,  and  other  goods.  There  are  agreements  of  strategic  cooperation  between   the  Bolivian  and  Chinese  ministries  of  agrarian  development  and  agriculture,  to   deploy  tasks  for  research  and  transfer  in  the  improvement  of  agricultural   production  in  Bolivia.   At  the  financial  level,  the  China  Development  Bank  established  a  consortium  with   the  Bolivian  State  Bank  Union,  a  fund  involving  an  initial  $10  million  USD  in  capital.