Wednesday, November 17, 2004
China to invest $20 bn in Argentina
AFP
BUENOS AIRES: China's President Hu Jintao and Argentine President Nestor Kirchner signed cooperation agreements Tuesday as Chinese companies pledged investments of $20 billion.
Chinese companies would develop railway and aerospace projects and send tourists to the South American country on holiday packages.
"The goals will be to strengthen strategic cooperation and continue the firm reciprocal support in terms of sovereignty, such as the territorial integrity of both countries," Hu said through an interpreter. Lo Fong Hung, chief executive of the China Construction Bureau, said during a ceremony that $20 billion would be invested in Argentina.
Some $8 billion would finance urban and interurban railways and $5 billion would be invested in fossil fuels over 5 years, according to Argentine officials. Another $6 billion would build 300,000 homes and other infrastructure projects, such as $450 million in communications and $260 million in satellite technology.
Welcomed by dozens of children waving the two countries' flags at Buenos Aires airport, Hu and his official delegation took a 50-car convoy into the capital ahead of meeting Kirchner. Argentina laid out maximum civilian and military honors for the visit with a cavalry guard escorting Hu and his wife, Liu Yongqing to the government headquarters.
Hu has sought to use this Latin American tour -- ahead of a major Asia-Pacific leaders' summit in Santiago this week -- to extend China's economic reach in the region. Argentina has been desperate to attract new investment since its spectacular default on its foreign debt in 2001.
Hu said the accords were intended to "strengthen strategic cooperation." "The two governments are going to stimulate enterprises to increase initiatives in the agro-food, industrial, mining and infrastructure sectors," said the Chinese leader after signing the accord.
One poll published Tuesday said 78 per cent of Argentines believe the economic agreements will be important to help Argentina's efforts to escape its economic crisis. In Brazil, where he spent five days, Hu secured recognition from the government that China is a "market economy" which helps its case in international anti-dumping disputes.
In exchange, Brazil obtained greater access to the Chinese market for its beef and poultry industry, as well as a $200 million order for at least 10 Embraer airplanes. Hu was expected to seek the same concession from Argentina.
As in Brazil this has caused concern in Argentina that such a move could weaken Argentina's defenses against a flood of Chinese goods. "It is impossible to compete with China equally," said Aldo Karagosian, who heads Argentina's textile industry federation.
"We fear an avalanche of Chinese products." On Wednesday, Hu will meet the Supreme Court president and the mayor of Buenos Aires before heading to San Carlos de Bariloche in the foothills of the Patagonian Andes for a private visit. Hu will leave Argentina on Thursday for the annual summit of the Asia-Pacific Economic Cooperation forum in Santiago.
Trade between China and Argentina reached $2.6 billion between January-October. But it favored Argentina whose exports reached $2.1 billion -- more than 80 per cent of that in soy exports.
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