RIO DE JANEIRO, BRAZIL – Beyond the difficult negotiations over the shipment of Sinopharm vaccines that Alberto Fernández and Xi Jinping are defining in these pandemic days, Argentina and China are working in parallel on an ambitious mid-term plan to implement 15 specific Chinese investment projects in infrastructure, energy and transport, which would amount to some US$30 billion.
This is one of the Argentine government’s main bets in terms of international economic and trade agreements planned for the post pandemic period. The list of investment projects that Argentina wants to prioritize began to take shape in recent days and are being discussed within the framework of the Strategic Dialogue for Economic Cooperation and Coordination (DECCE), a forum where diplomats, ministers and political leaders participate.
Argentina and China, under ex-President Cristina Kirchner’s mandate, sealed a “comprehensive strategic alliance”, which in terms of Chinese diplomacy is a step above any basic agreement that may exist between countries. Now Alberto Fernández, faced with the lack of dollars and the economic crisis left by the pandemic, wants to reinforce this strategic alliance with investments from Beijing.
Minister of Production Matías Kulfas reported that “there are more than 20 projects related to energy and infrastructure under negotiation” with China. The Minister’s statements were recorded in a videoconference he shared last week with members of the Chinese Academy of Social Sciences, a body similar to CONICET, where the scope of bilateral relations was discussed in a seminar on “Economic cooperation in a changing world.”
According to statements made at the Casa Rosada and at the Foreign Ministry, Xi Jinping’s administration has some 15 projects in a position to advance immediately, involving a global disbursement of some US$30 billion.
The intention to progress as soon as possible in the implementation of most of these projects is justified: Alberto Fernández has planned a State visit to China in May, where he expects to sign the most important plans for bilateral relations.
The Secretary of Strategic Affairs, Gustavo Béliz; the Minister of Economy, Martín Guzmán, as well as Kulfas and the new Argentine Ambassador to China, who has a direct line with Vice President Cristina Kirchner, Sabino Vaca Narvaja, are in charge of conducting negotiations with Beijing. Foreign Minister Felipe Solá is virtually on the sidelines of these negotiations.
The list of projects that Argentina wants to prioritize for Chinese investments includes the rehabilitation plan of the San Martin Railway system; improvements in the Roca Railway line, infrastructure works in the Mitre and Urquiza systems; the redefinition of the Belgrano Cargas 6 railway network, which is an old Chinese project to speed up the shipment of soybean from the interior of Argentina to Buenos Aires, and the incorporation of passenger rolling stock in different lines.
A separate chapter in China’s investment projects is the construction of Nuclear Power Plant IV. This project for the installation of nuclear reactors in Campana with strictly Chinese technology began to take shape in the last year of Cristina Kirchner’s government. The original proposal had a cost of US$12 billion but in 2016, when Mauricio Macri came to power and after tough negotiations, it was reduced to a soft US$9 billion loan. Then came Macri’s defeat and and the election of Alberto Fernández, so China is now discussing the issue again within the scope of the Energy Secretariat led by Darío Martínez.
This initiative will exclude the Canadian CANDU technology historically used by Argentina for its nuclear power plants.
The Chinese investment portfolio also includes a megaproject for the installation of intelligent pig farms. According to Foreign Ministry estimates, these investments could reach over US$3.8 billion over the next four years, to increase meat production by 882,000 tons and generate exports worth US$2.5 billion.
In his meeting with Chinese officials, Kulfas stated the need to deepen relations between Argentina and China. So that there would be no doubts about Argentina’s intentions in this new stage of the integral strategic relationship, the Minister of Production said: “Since 2000, cooperation with China has resulted in the entry of US$25 billion. This meant the creation of more than 20,000 jobs.” And the path of relations will continue in this direction.
Bilateral trade between both countries increased from US$2 billion in 2000 to US$16.3 billion in 2019, with Argentine exports at US$7 billion, which represents 10.8% of the country’s total foreign sales, and imports of US$9 billion. The government wants to boost this trade.
Furthermore, for Argentine companies, these agreements lead to Chinese demand for products of different items, such as wines and dairy. The mining sector is also on the list of Chinese investments, particularly copper and lithium in northern Argentina. To this end, Kulfas told Beijing that the government is preparing a bill on electromobility, which will be another cooperation platform.
The list of the 15 Chinese investment projects in Argentina also includes the construction of the El Tambolar and Chihuido hydroelectric plants in Neuquén, as well as the Potrero del Clavillo hydroelectric plant. Also included is the installation of a Solar Power Station in Jujuy Cauchari, which could become the largest of its kind in South America, including more than 1,180,000 solar panels located 4,020 meters above sea level, built by Power China and Shanghai Electric.
The president of the Shanghai section of the Chinese Academy of Social Sciences, Dezhong Wang, outlined an assessment of the relations between both countries in his videoconference with Kulfas. He recalled the works with Chinese investment carried out in the Néstor Kirchner administration – dams for the hydroelectric exploitation of Santa Cruz that is being built by a consortium including the Gezhouba Group Company Limited.
“All these works point to a path of cooperation that would be highly beneficial to deepen, given the challenges for economic and social development imposed by the pandemic,” Wang said in conclusion.
In relation to the wind energy projects, the investment in the “Cerro Arauco” wind farm in La Rioja, the “Los Blancos” hydroelectric station, the dredging of the El Salado River and the electric transmission of the Condor Cliff-La Barrancosa hydroelectric complex are being considered.
In terms of energy investments, China and Argentina also made progress in agreements for the construction of a Zarate Energy Pole (Gas) and the development of gas pipelines in Vaca Muerta.
Separately, in the list of issues on the agenda were the construction of an aqueduct and water treatment plants; the remodeling of the Chaco-Corrientes bridge; road corridors and the development of a major logistic hub in Tierra del Fuego, which provincial Governor Gustavo Melella is rapidly closing with the endorsement of the Casa Rosada.
Looking ahead, the Chinese government hopes to implement in Argentina Xi Jinping’s greatest dream: to establish Huawei for the development of 5G technology in telecommunications and to compete openly with the United States in Latin America.