Argentina joins China's Belt and Road initiative, eyes US$23 billion investment

[peppertree]

Argentina’s government has confirmed that the country has signed up to China’s sweeping Belt and Road initiative, paving the way for investments worth more than US$23 billion.

The deal is expected to be finalized in the next few hours during a closely watched bilateral meeting between President Alberto Fernández and Chinese Premier Xi Jinping, as part of the Argentine leader's three-day visit to Beijing.

A memorandum of understanding committing both nations to the deal has already been signed.

The news will see the two nations “sign different agreements that guarantee financing for investments and works for more than US$23.7 billion, generating a new milestone in the bilateral relationship that in the last 15 years has expanded and strengthened notably."

Xi launched BRI in 2013, aiming to harness China's strengths in financing and infrastructure construction to "build a broad community of shared interests" throughout Asia, Africa and Latin America.

At: https://www.batimes.com.ar/news/argentina/argentina-joins-chinas-belt-and-road-initiative-eyes-us23-billion-investment.phtml

Argentine President Alberto Fernández and Chinese President Xi Jinping pose at Beijing's Great Hall of the People during a bilateral meeting today in which Fernández joined China's Belt and Road initiative.

The agreement makes up to $23.7 billion in Chinese infrastructure investment available over the next several years for the cash-strapped South American nation.

Argentina has been largely cut off from international financing since a 100 billion-dollar foreign debt bubble under Fernández's predecessor Mauricio Macri burst in April 2018.

[Irish_Dem]

1. China will have control over Latin America and Africa.

They have been spending like crazy there, and have Chinese military stationed there.

[peppertree]

2. Which is why Biden was smart to give his approval of Argentina's recent IMF repayment agreement

Many of these countries carry yooge dollar-denominated debts, and are in turn strapped for dollars.

This forces them to turn to alternative sources of financing - particularly China.

Argentina in particular doesn't have Chinese military bases (though they do have a small U.S. military base in the SW) - but it does have a Chinese satellite tracking station in Patagonia.

And why?

Because in 2014, Argentina was forced to turn to China for a $10 billion currency swap when the country's credit was ruined by vulture fund lawsuits that literally stopped U.S. bondholders from receiving their checks by court order (the late Judge Greasa, with his million-dollar Montana ranch).

The Chinese even threw in a massive hydroelectric dam project - which was nixed by Macri in 2016, but now revived with this agreement (Macri, ironically, was forced to turn to China himself for another $8 billion when his debt bubble burst).

In return, that's what they asked for: the tracking station, which is still there - near the U.S. base, of course.

Were it not for the vulture fund credit blockade (which many in Argentina saw as being U.S.-sponsored), and Macri's $100 billion debt hangover a few years later, Argentina's relationship with China would be far more limited.

But now, they need their help.

[Irish_Dem]

3. China decided to seduce other countries into compliance.

Instead of bombing them back to the Stone Age.

Yes Biden is making some good moves.

[peppertree]

4. Money talks - especially when you're strapped for cash.

When Macri was elected in 2015, with his con-man smile and all his U.S.-flag-waving, it was mostly seen as a "win" in Washington foreign policy circles.

Then he doubled the country's already-bulky foreign debt - including the record-setting $45 billion bailout Trump forced the IMF to lend him ahead of Macri's 2019 re-election campaign.

Macri lost anyway - but left his country with a colossal, $200 billion public foreign debt that's absolutely overwhelming now.

Argentina's not that poor - but it is dollar-poor, you see. Anything that forces them to come up with a ton of dollars puts them in a spot - and in need of a big, alternative source of funding like China.

[mitch96]

5. "control over Latin America and Africa" the way I see it is cheap labor and plentiful resources.

If you take the time frame from the end of WW 2 the cheap labor kept moving.. Japan, Taiwan, China, India, Vietnam and now I see Africa and So America...
Slave wages and cheap plentiful materials...
m

[peppertree]

6. In this case, the resources more than the labor

Argentine wages are fairly high by 3rd-world standards (about $3 an hour on average) - but they do have a good many under-exploited resources such as natural gas and lithium.

Natural gas is already well-developed there - in fact, neighboring Chile depends on Argentina for much of theirs. But with more fracking, it's estimated they could easily double their output.

Lithium output, similarly, could double or triple with the right investment; Argentina's already #4 in world lithium output.

Potash is another possibility - especially now that prices have recovered after a decade-long rut.

Suffice it to say, Chinese firms want a bigger share of that.

And with the $200 billion foreign debt Trump's pal Macri left them with (much of it to finance offshoring by short-term speculators and Argentina's own elites), Argentina's been shut out of global credit markets - making Chinese financing an easy sell for them.

[Irish_Dem]

7. China is going to be a superpower, and is lining up global allies.

Yes also getting minerals and resources around the world.
And lining up cheap labor.

So it is not either or in terms of our theories.
It is all of the above.