Fourteen Chinese companies to invest in Argentina

RIO DE JANEIRO, BRAZIL – The results of the visit made in February by President Alberto Fernández to China to meet with his peer Xi Jinping are already yielding concrete results. Beyond the agreements sealed for the Silk Road, 14 Chinese companies closed contracts to invest in Argentina and deploy in the immediate future different economic development projects.

In some cases, the Chinese companies present themselves as private, although all production sectors belong to the State in the Chinese regime. There are investment projects in mining, tourism, agriculture, electric and nuclear energy, health, and e-commerce sectors.

These are direct investments that will be deployed in Argentina. Many of these Chinese companies will be associated with local counterparts or have partnered with the Government to realize a specific project, as in the case of the nuclear power plant, which implies a 40% local labor force for the new plant in Zarate. In this case, Argentina intends for China to provide the total financing.

FOOD, METALS, CARS, MEDICINE, AND ENERGY

According to the Chancellery’s document to which El Cronista had access, the following is the detail of the 14 companies that have already closed investment agreements in Argentina and detail the scope of the initiatives:

JD.COM

It is the largest retail company in China, with more than 550 million active users, and will announce the signing of a Memorandum of Understanding (MOU) committing to increasing the volume of transactions of Argentine products. The idea of the Chinese company is to inaugurate a National Pavilion of Argentina on its platform in 2022 and “significantly increase the purchase of Argentine products” such as meat, wine, and seafood.

TONG REN TANG

This Chinese company is dedicated to importing Traditional Medicine from Beijing and is one of the leading traditional Chinese medicine companies with more than 2,000 stores throughout China, as well as 149 franchises in 28 countries. This company expressed its intention to establish a “specialized quality control platform” for bovine gallstones in Argentina, which could then be exported to China. That is a product that currently has little commercialization in Argentina, despite being a significant producer. Due to the particular conditions necessary for its production, it has a high market value.

SINOGRAIN

The Chinese company Sinograin is one of the largest producers and importers of grains and oilseeds worldwide. According to the report, it has already announced its intention to import 3 million soybeans and 300,000 tons of soybean oil from Argentina, according to the report.

CHERY

This electric car company is one of the leading Chinese automakers. It has over 20 years of experience and sold more than 10 million units worldwide. It plans to announce the opening of an electric car plant in Argentina. This investment is in line with the electromobility bill promoted by the Government.

5-GOTION HIGH TECH

This Chinese company is dedicated to lithium batteries. The Gotion High Tech Electric Bus Plant specializes in developing iron phosphate batteries, lithium mining, and related materials through its subsidiary Jiankang Automobile. It will announce the establishment of an electric bus plant in Argentina and an additional plant for lithium processing, from the exploration stage to battery production.

ZIJIN MINING

Lithium exploration factory Zijin Mining is one of the largest gold and copper producers in the Asian country, being ranked by Forbes as the third among the 11 largest gold companies globally. Zijin Mining announced the purchase of the Tres Quebradas project in Fiambalá, Catamarca, from Canadian mining company Neo Lithium, which operates through its local subsidiary Liex. Zijin expects to make an initial investment of some US$319 million in Argentina, generating around 1,000 jobs.

TSINGSHAN

A lithium exploration company, Tsingshan is the largest producer of stainless steel and more than a quarter of nickel worldwide, which in 2021 was ranked as the 297th company in the Fortune500 ranking. In Argentina, it is contemplating an investment of more than US$370 million to exploit lithium in the province of Salta.

JIANGXI NUCLEAR POWER CO.

This Chinese state-owned company agreed to produce medical reactors with INVAP of Rio Negro. Thus, the Argentine company will provide strategic consultancy for the future supply of medical reactors, their installation, and the supply of integrated medical solutions linked to these reactors. The agreement also stipulates cooperation in Clean Energies and Green Hydrogen.

CURRENCY SWAP

Although it is not a traditional investment, the diplomatic report details that the Central Bank of Argentina is working together with the People’s Bank of China on the technical aspects to materialize the extension of the currency swap with Argentina (SWAP), with a view to the early announcement of its results. It is estimated that there will be an as-yet-undetermined extension of the US$20 billion in swaps already made.

BAII

The Chinese government supports this Asian Investment and Infrastructure Bank and has already announced a millionaire investment in the San Francisco International Pass. It is a connection axis between the province of Catamarca, Argentina, and the Atacama Region, Chile. It has direct access to the Port of Caldera and, consequently, to the Asia-Pacific Region countries. This multilateral development bank aims to provide financing for infrastructure projects in the Asian region based on a financial lending system and the promotion of the free market system in Asian countries.

XIAOMI

It is a Chinese company that produces cell phones and aims to open Xiaomi stores in Argentina. This world-leading Chinese technology company will expand its presence in Argentina by starting to produce its cell phones in Tierra del Fuego this year and open a series of its own stores (Mi Stores) in Argentina by the middle of the year. According to the report accessed by El Cronista, it is expected that Xiaomi “will deepen its presence in the Argentine market and will continue with the idea of investing in providing Argentine consumers with good products at reasonable prices”.

GREAT WALL

China Great Wall Industry Corporation (CGWIC) is the only commercial organization authorized by the Chinese government to provide satellites, commercial launch services, and carry out international space cooperation. Thus, this company signed a technological and commercial complementation agreement with the Argentine company SPACESUR. The strategic objective of this agreement is to develop a Chinese-Argentine satellite technology export model to provide digital transformation solutions and value-added products to supply the Latin American market.

YULIN

It is an Argentine Soccer Academy. The intention is to install in the high-tech area of Yulin, Shaanxi Province, within the framework of the China-Argentina International Football Academy project the construction for the Argentine School of two soccer fields (international standard), an exercise field of professional dimension, two teaching buildings, and three apartment buildings with all the necessary facilities for teachers and students. Investments in Argentine soccer are also contemplated.

TRIP.COM

The largest tourism service provider in China and the second-largest globally, with 400 million users worldwide, closed the execution of an agreement with the Ministry of Tourism in which it will seek, among other things, to capture the accumulated demand, develop campaigns to stimulate the recovery of Chinese citizens’ travel to Argentina and encourage travelers from all over the world to visit once international travel resumes.4

HOW FAR ALONG THE PROJECTS ARE

According to what the Chancellery told El Cronista, all these projects are at an advanced execution stage and were supervised by Chancellor Santiago Cafiero and the Ambassador to China, Sabino Vaca Narvaja. In Argentina, the Secretariat of Strategic Affairs, headed by Gustavo Béliz, is in charge of their implementation.

Besides, all the Chinese investment projects are framed in the Silk Road agreement for investments in railroads, Dams, AMBA Transmission Lines, gas pipelines, and the fourth Nuclear Power Plant. These have already signed advanced contracts and are in the financing and fuel technology transfer stage.

All the Chinese investment projects and the 14 companies that will disembark soon are framed within the framework of the Integral Strategic Association that both countries have. That is why the projects are financed with “preferential/concessional credits,” which are much cheaper than any normal credit.

With information from El Cronista