Bridgewater cuts China exposure, selling all $1.4bn in shares
PAK YIU
August 15, 2025 07:37 JST
NEW YORK -- Bridgewater Associates, one of the world's largest hedge fund managers, divested all its holdings in Chinese companies in the second quarter, marking a significant withdrawal amid geopolitical tensions.
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The Diplomat
an hour ago
- The Diplomat
One Belt, One Road, One Chilean Headache
Chile's next president will have to decide how to handle growing Chinese investment in Chile's critical resources. On November 16, Chile will elect a new president who will lead the nation until 2030. Presidential candidates – including the Communist Party of Chile's Jeanette Jara representing the left-wing Unity for Chile coalition, and the incumbent, President José Antonio Kast, for the conservative Republican Party – will have to present policies tackling domestic issues such as dwindling birthrates and rising crime. But one of the most important foreign policy areas for this election will be China's growing investments in Chile's weakened critical mineral and transportation sector. Already, China controls approximately two-thirds of Chile's energy sector through mainly financial acquisitions of companies operating in the region. Also, as of 2023, China bought just under 40 percent of Chilean exports. The next largest export destination – the United States – was well behind, accounting for just 15 percent of Chile's total exports. As of 2024, Chile and China's bilateral trade was worth an estimated $37.8 billion. That year, Chile's exports to China were primarily made up of minerals – at $27.95 billion, representing almost 75 percent of total trade. Of these minerals, the most prominent is copper, with Chile exporting $5.5 billion worth of copper to China. Chile holds an estimated 23 percent of the world's reserves in copper, and as of 2024 produced 24 percent of the world's copper, signifying the importance of China as a stable buyer. In 2005, China's Minmetal Corporation signed a 50-50 joint venture with Codelco, Chile's state-owned copper producer, for $550 million. This venture would ensure China with 55,000 tons of copper for more than 15 years. In other projects not owned by China, Chinese banks have provided investment. In 2021, the Collahuasi mine signed a $1 billion syndicate loan from 17 banks, including three from China: the Bank of China, Industrial and Commercial Bank of China, and China Construction Bank. Together the three banks provided $71.43 million for the mine. Similarly, in 2021, the Bank of China also provided $38.11 million of a $571.6 million syndicate loan used for the expansion of the Mantoverde copper mine. Mantoverde – which is not owned by China – produces an estimated 120,000 tonnes of copper per year. Chile also plays a significant role in lithium mining. As of 2023, Chile was the world's second largest producer of lithium, accounting for 25 percent of global production. Here, too, Chinese firms have been actively investing. In 2018, Tianqi Lithium Corporation purchased 23.77 percent of the Chilean lithium mining company Sociedad Quimica y Minera de Chile (SQM) from the Canadian company Nutrien. Tianqi paid $4 billion for the shares and has since held the second-largest stake in SQM (Pampa Group is the largest shareholder, with 26 percent). An agreement signed in May 2024 gives SQM the responsibility of producing refined lithium in Salar de Atacama from 2025 to 2060. Furthermore, in 2023, China's Tsingshan Holding Group and BYD planned to invest $233.2 million setting up a lithium iron phosphate (LFP) plant, operational by May 2025. Chile hoped this project would produce 120,000 tons of LFP per year. However, in 2025, the Chinese partners withdrew from those plans for unknown reasons. Also, in 2025, BYD delayed plans for a lithium cathode plant worth $290 million, with the capacity of producing 50,000 tons of LFP per year. Observers think the project is likely to be canceled. Even with the recent issues involving lithium projects, China may have more opportunity to invest due to the weakened state of Chile's Codelco, the state-owned mining company that is a critical player in Chilean copper and lithium. As reported in December 2024, Codelco's debt has ballooned to over $20 billion with production hitting a historic 25-year low in 2022. Beyond the mining sector, China is having a significant – albeit indirect – impact on Chile's transportation sector. Chile's largest port, the Port of Valparaíso handles 11.5 million tons of cargo a year. In 2024, Valparaíso exported 31 percent of its cargo to Asia – primarily China. Chile has plans to expand the port, which is owned by the state company EMPORCHI, including adding cargo terminals, extending cruise terminals, and expanding the flow of cargo ships. The goal is for the port to maintain competitiveness with the region. And the competition is fierce following the inauguration of the Chinese-built Chancay port in Peru. Chancay's rise may cut into the traffic heading for Chilean ports like Valparaiso. The new 'Chancay Express' connects the Chilean ports of Lirquen and San Antonio to Peru's port. Essentially, the route allows for Chilean goods to be shipped to China via Peru's Pacific coast, reducing shipping times from 35 days to 23 and cutting costs by 30 percent. Unlike Chilean ports, Chancay can handle Ultra Large Container Vessels (ULCVs) which means it has a double advantage: it can handle much more cargo on top of having shorter travel time to Beijing. For Beijing, it is clear Chancay is a vital transit hub not just for Peru but for all of Latin America. In addition to the Chancay Express linking Chile to Peru, China has revitalized negotiation for a trans-oceanic railway that would carry cargo from Brazil to Chancay. China's economic activity in Chile is thus a double-edged sword. Chinese companies have been making unprecedented investments in Chile's critical resources, yet at the same time, China's actions in other parts of Latin America, particularly its promotion of Chancay port in Peru, could undercut Chile's economy. Chile's upcoming election will be crucial for the future of the country's economy – and its ties to China. Jeannette Jara has been surging dramatically after the recent primaries. She is polling at 26 percent, putting her on top at the moment, although Jara is closely followed by Kast at 22 percent. Of the many issues these two candidates face, ensuring the future of Chilean mining will be key for economic growth – especially with the bleeding assets of Codelco. Kast aims to open Codelco to private capital in the hopes of allowing boosting production and restoring revenue growth. His plan includes selling non-core assets to pay Codelco's debts while focusing on operational efficiency and not state revenue. Given China's track record of investing in Chile's natural resources, Chinese firms would likely be keen to take part in the bidding. On the other hand, Jara opposes the deal between Codelco and SQM, instead calling for a new public company to aid in developing lithium resources. Codelco is a copper-mining company, and Jara aims to create a new state-owned firm playing a similar role for lithium resources. That would have implications for China, given its minority stake in SQM. On foreign policy specifically, Jara has emphasized 'not wanting Chile subordinated to foreign government or external models' and emphasizes human rights. She has made no explicit statements about China in this regard. Instead, Jara noted that her foreign policy goal is diversification of trade and multilateralism, focusing on expanding ties with China, India, and Latin America. However, Kast, the incumbent president, has been strongly aligned with Western powers. He is particularly in sync with Trumpian positions such as removing Chile from the United Nations Human Rights Council and opposing immigration, LGBT rights, or any policies he views as 'communist.' With these very different individuals running for office, Chile is at a crossroads. While Chinese investment won't be top of mind for the average voter, the next president will determine the extent of China's influence in the country's economy.
Asahi Shimbun
8 hours ago
- Asahi Shimbun
Asian shares mostly gain after uptick in inflation pulls U.S. stocks lower
A person stands in front of an electronic stock board showing Japan's Nikkei index at a securities firm, Aug. 12, 2025, in Tokyo. (AP Photo) MANILA--Asian are generally higher after most stocks on Wall Street fell following a disappointing report that said inflation was worse last month at the U.S. wholesale level than economists had expected. U.S. futures rose while oil prices slipped. China reported data showing its economy was feeling pressure from higher U.S. tariffs in July, while property investments fell further. Retail sales rose 3.7% year-on-year, down from 4.8% in June, while investments in factory equipment and other fixed assets rose a meager 1.6%, compared with 2.8% growth in January-June. Uncertainty over tariffs on exports to the United States is still looming over manufacturers after President Donald Trump extended a pause in sharp hikes in import duties for 90 days following a 90-day pause that began in May. The Shanghai Composite index added 0.8% to 3,694.91, but Hong Kong's Hang Seng index fell 1.2% to 25,216.45. 'Chinese economic activity slowed across the board in July, with retail sales, fixed asset investment, and value added of industry growth all reaching the lowest levels of the year. After a strong start, several months of cooling momentum suggest that the economy may need further policy support,' ING Economics said in a market commentary. In Japan, the Nikkei 225 gained 1.7% to 43,381.10 after the government reported that the economy grew at a 1% annual pace in the April-June quarter. That was better than analysts had expected. Elsewhere in Asia, Australia's S&P/ASX 200 rose 0.7% to 8,938.60, Taiwan's TAIEX gained 0.4%. India's BSE Sensex edged 0.1% higher. Attention later Friday will likely focus on an update on U.S. retail sales and on a meeting between U.S. President Donald Trump and Russian President Vladimir Putin. On Thursday, seven out of every 10 stocks within the S&P 500 fell, though the index edged up by less than 0.1% to set another all-time high. The Dow Jones Industrial Average dipped 11 points, or less than 0.1%, and the Nasdaq composite fell less than 0.1% from its record set the day before. The inflation report said that prices jumped 3.3% last month at the U.S. wholesale level from a year earlier. That was well above the 2.5% rate that economists had forecast, and it could hint at higher inflation ahead for U.S. shoppers as higher costs make their way through the system. The data led traders to second guess their widespread consensus that the Federal Reserve will cut interest rates at its next meeting in September. Lower rates can boost investment prices and the economy by making it cheaper for U.S. households and businesses to borrow to buy houses, cars or equipment, but they also risk worsening inflation. Higher interest rates drag on all kinds of companies by keeping the cost to borrow high. They can hurt smaller companies in particular because they often need to borrow to grow. The Russell 2000 index of smaller U.S. stocks tumbled a market-leading 1.2%. Thursday's disappointing data followed an encouraging update earlier in the week on prices at the consumer level. A separate report on Thursday, meanwhile, said fewer U.S. workers applied for unemployment benefits last week. That's a good sign for workers, indicating that layoffs remain relatively low at a time when job openings have become more difficult to find. But a solid job market could also give the Fed less reason to cut interest rates in the short term. Big Tech stocks helped mask Wall Street's losses. Amazon rose 2.9% to add to its gains from the prior day when it announced same-day delivery of fresh groceries in more than 1,000 cities and towns. Because Amazon is so huge, with a market value of $2.45 trillion, the movements for its stock carry much more weight on the S&P 500 than the typical company's. In other dealings early Friday, U.S. benchmark crude lost 8 cents to $63.88 per barrel. Brent crude, the international standard, fell 11 cents to $66.73 per barrel. The dollar edged lower to 147.11 Japanese yen from 147.20 yen. The euro rose to $1.1672 from $1.1654.
Nikkei Asia
9 hours ago
- Nikkei Asia
China economic indicators worsen under trade war pressure
An employee works on a production line for aluminum rolls in Zouping, in China's Shandong province. © Reuters GRACE LI and WATARU SUZUKI TOKYO/SHANGHAI -- A slew of Chinese economic data showed deterioration on Friday, suggesting that the trade war with the U.S. is weighing on the world's second-largest economy while the effects of government stimulus efforts are wearing off.
