Xi in ArgentinaSaturday, July 19, 2014
Argentina, China upgrade ‘strategic’ ties
Argentina and the People’s Republic of China entered a new phase of their relationship yesterday after promoting their relationship to a “comprehensive strategic association” and signing a battery of agreements, which include a US$ 4.7-billion investment in hydroelectric dams, US$ 2.09 billion in the renovation of the Belgrano Cargas freight rail system and US$11 -billion currency swap.
Buenos Aires and Beijing will now enter a new “comprehensive strategic association” ten years after the launch of a “strategic association” that has brought a boom in trade and investment. The upgraded diplomatic relations — previously restricted only to Brazil within the region — open the door to a further deepening of the existing ties.
“This is a foundational day for the relationship between our two countries,” said President Cristina Fernández de Kirchner at Government House, referring to the new chapter in relationships, adding that the “this is an upgrade of our relations” in terms of political, economic, and cultural bilateral links.
Her counterpart, Chinese President Xi Jinping said that he viewed Argentina as “partner for development” and that a “broad consensus” had been established on political and economic matters during yesterday’s talks. The upgrade in relations comes only a week after Russian President Vladimir Putin’s visit to Buenos Aires and was accompanied once again by comments from the president regarding the “multipolar nature” of global politics.
“No longer is this a world in which one can dominate over others, this is a world in which cooperation is required,” said Fernández de Kirchner, adding that “I am sure that China will one day become the world’s largest economy.”
She went on to add that now “the relationship with China is a state policy, not just one of this government.”
“We will promote balanced trade with Argentina,” said President Xi, in allusion to Argentina’s trade deficit with the Asian giant.
“We now are focused on the implementation,” of the deals said Xi, adding that “we will always support any projects that benefit the people of Argentina.”
In recognition of the links between the countries and the fact that we are in the Year of the Horse according to the Chinese Zodiac, Fernández de Kirchner announced that she would be gifting Xi a saddle horse and polo pony.
Dams, trains and cash
Yesterday’s official activity in the Government House was punctuated by the signature of 20 framework agreements spanning a range of economic, political and cultural activities involving various ministries. The most important, however, concerned financing agreements for the construction of the Néstor Kirchner and José Cepernic hydroelectric dams in Santa Cruz, the refurbishment of the Belgrano Cargas freight train and a currency swap between the countries’ respective Central Banks worth approximately US$11 billion (see below).
“We hope that these projects can become standard-bearers for the cooperation between China and Argentina, and that they contribute to Argentina’s economic and social development,” said Chinese President Xi Jinping at Government House in reference to the Néstor Kirchner and José Cepernic dams and the Belgrano Cargas renovation.
“This is more than an agreement, this is a dream coming true for generations of Santa Cruz residents,” said President Fernández de Kirchner, in reference to the two mega-projects. The dams, financed by Chinese funds to the tune of US$ 4.71 billion will sit upon the Santa Cruz river and provide a massive increase to the power grid in the country’s South.
“From this nook of the South there will be transformation of the Patagonia by way of a phenomenal impulse,” said Santa Cruz Governor Daniel Peralta in a videoconference from El Calafate. The dams will generated an estimated 1,740 MW He was joined by mayors of the region benefited by the dams and added that “a great part of the population of Santa Cruz is on its feet applauding because our dreams our coming true.”
From Santa Fe province, Transport Secretary Alejandro Ramos said that the US$ 2.09 billion will be invested to add 1,500 kilometres of track to the Belgrano Cargas network, purchase 100 new engines, 3,000 new carriages and will also provide for the refurbishment of 2,000 carriages in Argentina using highly-skilled labour.
“This will allow for improvement of conditions for our producers and regional economies,” said Ramos, nothing that the increased transport networks will facilitate access to markets.
The Belgrano Cargas has been in the process of renovation and refurbishment and yesterday’s announcement of new funds will allow for continued revitalization of a railway network that primarily serves the northern part of the country. The network had fallen into disrepair and was nationalized in 2013 after a brief intervention.
Basket of agreements
In addition to the featured agreements, frameworks were established for cooperation on veterinary standards, the creation of cultural centres in Beijing in Buenos Aires and an agreement between YPF and the China Development Bank (CDB) on energy matters.
According to the agreement signed by YPF CEO Miguel Galuccio, YPF will provide advisory services for Chinese companies interested in investing in the country’s hydrocarbon sector, which will also receive financing from the CDB.
China has also committed US$423 million for the purchase of 11 dredging boats to be used to augment trade in the country’s riverways.
In recognition of the tragic series of events that lead to the loss of Malaysia Airlines flight MH17 over eastern Ukraine on Thursday, both presidents expressed their condolences and solidarity with the victims and their families while also calling for an independent investigation.