January 24, 2018
Friday, May 19, 2017

Macri, Xi seal infrastructure deals worth billions of dollars

China and Argentina signed a host of agreements addressing various sectors this week in Beijing.
China and Argentina signed a host of agreements addressing various sectors this week in Beijing.
China and Argentina signed a host of agreements addressing various sectors this week in Beijing.

President wraps up visit to China with agreements for energy and transportation sectors ahead of meeting with Japanese PM Shinzo Abe

President Mauricio Macri and Chinese counterpart Xi Jinping have signed 16 agreements worth at least US$17 billion in areas such as energy and transport infrastructure, confirming the government’s intere st in working with Beijing.

Macri’s visit to China, part of the “One Belt, One Road” trade initiative, came after an earlier stop in the United Arab Emirates and subsequent travel to Japan for another round of agreements. Macri is the first Argentine president to visit Japan in nearly 20 years. The president’s tour has been based on securing public and private investment in Argentina and promoting the country for trade and business opportunities among Asian stakeholders.

“In China we felt that we took a very positive step forward, this is the third time in less than 18 months that I meet with Xi Jinping and we have been able to create a personal relationship, and that is always important, and above all there has been an increase in confidence between both countries, between both governments” said Macri as he wrapped up the China meetings, heading to Japan.

Foreign Minister Susana Malcorra noted that over the next five years, the agreements signed with China could amount to investment worth US$32 billion from Beijing.

Nuclear power plants

“As these projects run for five years, some of these projects will be consolidated over time. But what is important from the point of view of the Chinese is that they are seeking a long-term plan of complementation. With China we have an integral strategic complementation, and it includes every sector that is part of the bilateral relationship.”

Among the agreements are commitments for the construction of two new nuclear power plants. “Those two power plants have to be settled with the technical details of the construction. But there has already been a commitment based on the progress that has been made so far and we are speaking about an investment of US$ 12 billion that is independent of the five-year plan.”

The governments made official an agreement for a five-year public works plan which “sets the goals chosen by both countries like railway rehabilitation, the system of incorporation of wind power, the big hydroelectric and nuclear works,” said Argentine Ambassador to China Diego Guelar.

The governments also agreed on the extension of visas for 10 years, with multiple entries to inject Chinese tourism in Argentina. There were also agreements in matters of agro-industry, along with major transport works such as the refurbishment of the San Martín freight train. Worth an investment of US$2.4 billion, and generating some 26,000 jobs directly and indirectly, the plan calls for cooperation with the China Railway Construction Corporation (CRCC). The San Martín freight line connects Mendoza to the port of Buenos Aires and the refurbishment is projected to take 39 months. Estimates say that the improved line will allow for the transport of 13 million tonnes by 2024, up on the current 2.3 million tonnes. Argentine inputs will account for 72 percent of the project.

In addition, the government renewed a credit for the refurbishment of the Belgrano Cargas freight train that was started during the Cristina Fernández de Kirchner administration.

During his official visit to China, Macri advocated the “re-launch” of bilateral relations, forecasting that “the following 10 years will be more important than the last 45,” called for “improving the trade balance” and asserted that Argentina wants “to stop being the world’s barn to become the world’s supermarket.”

Macri also welcomed the idea of a “free and open market” that China proposed at the international forum, and advocated a “smart and gradual integration with the world.”

“Argentina, particularly, has ahead the important task to rebuild roads, bridges, ports and airports that unite us. the Chinese have the capacity to do it in our region. There are already many companies that chose the region and I hope we can find many more that want to invest,” said Macri.

Improved relations with Japan

After meeting with Xi, Macri will also reciprocate the recent visit to Buenos Aires paid by Japanese Prime Minister Shinzo Abe and will also meet with Emperor Akihito. Having arrived in Japan yesterday, he will commence a round of meetings today.

Agreements in the fields of telecommunications, promotion of trade, agriculture, fishing, forestry and livestock will be signed and the president will participate in an economic forum and meet with the CEOs of multiple multinationals.

Japan has consistently said that it is looking to increase investment in Argentina but requires greater guarantees for its companies in order for that to be possible.

According to analysis by the Argentine Chamber of Trade (CAC), Argentine exports to Japan totalled $663 million in 2016 — 15.6 percent more than in 2015. The primary export was minerals for a total of 26.1 percent, with live animals clocking in at 20.3 percent. Japanese exports to Argentina totalled US$953 million in the same period, down 22.1 percent compared to 2015, with the primary export being machinery and electronics.

As such, Argentina’s trade deficit with Japan shrank by US$291 million in 2016, making it 55.3 percent smaller than in 2015.

Herald with Télam

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