Source: Xinhua
China has become Argentina’s second largest trading partner and a major source of investment. Argentina is China’s fifth largest trading partner in Latin America. The relation is further fueled by the major economic agreements signed on Friday in Buenos Aires, including the financing by the Beijing government of two hydroelectric dams in the South American country.
It’s been ten years since Argentina and China first signed a strategic alliance which has now continued to strengthen both their economies and trade. The arrival of China’s President Xi Jinping in Buenos Aires consolidates that alliance and brings fresh investment to key areas in Argentina.
With more than two-billion dollars of financing, China is providing trains and materials for Argentina to revamp its ailing railway service and there is also investment in other key infrastructure projects.
"Argentina is in a partnership with China in the making of an energy project here in Argentina where Chinese companies put money, Argentina puts in knowledge for this energy venture in the south of the country," Nicolas Tereschuk, political analyst said.
China will loan Argentina nearly five-billion dollars for the construction of two hydroelectric dams in Patagonia, which will bolster Argentina’s energy production. The project will take the name of Jorge Cepernic, a former governor, but also Nestor Kirchner, the late former president who promoted the special alliance with China back in 2004.
Chinese investment and trade with Argentina is diverse. With one of the largest shale oil and gas reserves in the world, and also as one of the largest soy producers, Argentina also has plenty to offer.
"At the start of the 1990s, China exported soy and oil. Now it doesn’t have enough soy and oil to supply its own demand, and is the main importer of soy and oil. So Argentina is the third most important for not only soy, but also soy derivatives, and China is the main client," Gustavo Girado, Asia Y Argentina consultant said.
The relationship between Argentina and China continues to grow. In 2013, trade between the two reached 15 billion dollars. This state visit continues to develop a partnership that stretches across sectors such as energy, agriculture and banking - sectors that are vital for both countries.
During the trip, Xi also signed a three-year agreement for an $11 billion swap operation between the central banks of Argentina and China. This will let the Latin American country pay for Chinese imports with the yuan currency.
