2023-05-02 01:05:29
The activation of a swap tranche to pay imports from China in yuan and the announcement of a new disbursement of 500 million dollars from the Asian country to finance the construction of hydroelectric dams in Santa Cruz is verified in a context of greater rapprochement of Beijing to Latin America. This also explains the renewed concern on the part of the United States so that China does not continue to increase its power of influence in the region and in Argentina itself.
According to the last publication of the Boston University Global Development Policy Center, In 2023, economic relations between Latin America and the Caribbean and China began to recover from the pandemic, with three new loans to the region for the first time since 2019, along with growth in foreign direct investment from China and significant moves towards new agreements. of free trade. As a result of lithium, Argentina, which joined the Belt and Road Initiative last year, occupies a privileged place in the purchase of companies and direct investments.
Trade
In 2022, trade between Latin America and China once once more reached record levels, with exports to the Asian country estimated at 184 billion dollars and imports at 265 billion dollars. However, the resulting trade deficit of $80 billion is not distributed evenly.
While Mexico, Argentina and Colombia show a persistent deficit in their trade balance with respect to ChinaThe opposite is the case of Chile, Peru and Brazil. In Chile and Peru, the trade surplus is explained in the first place by the role of copper exports, a key mineral to expand the electrification that China requires to expand its urbanizations and serve its industry.
Chile also supplies China with most of the lithium, followed by Argentina, although the values are not yet high enough to have a decisive impact on the trade balance. While, Argentina has a strong role in frozen meat sales, along with Brazil, and in soy derivatives.
One of the points that explains the position of the report regarding underlining the “greater rapprochement” of the region with China is the table of progress in the signing of free trade agreements, following the batch of Chile, Costa Rica and Peru, agreed in 2006, 2010 and 2011respectively.
Last year, Ecuador negotiated a free trade agreement with the Asian country and announced at the beginning of this year the technical closure of the negotiation. Furthermore, the government of Uruguay wants to move forward with its agreement, which would imply a lethal blow for Mercosur. For now, China prefers that the unity of the bloc be maintained.
credits and investments
While in 2020 there were no new country-country credits from China to Latin American countries and in 2021 there was only one, last year the number rose to three loans financed by the China Development Bank and the Export-Import Bank of China. These operations were as follows: 500 million dollars to Brazil to support social projects, 121 million to Barbados for a road infrastructure project to boost tourism and a 192 million loan to Guyana, also for a road project.
In addition, Ecuador agreed to a restructuring of its debt with China, with a reduction in its payments of the order of 1.4 billion dollars until 2025. In the case of Argentina, which formalized its entry into the Belt and Road, an initiative of China to expand its commercial and financial influence throughout the world, also extended by 5 billion dollars his currency swap.
In the field of investments, Argentina had a salient note regarding China’s relationship with the region. Within the three purchase operations of local companies, two occurred in the country, both in the lithium sector. It is regarding the decision of Ganfeng Lithium for 962 million dollars to buy Lithea, which owned the Pozuelos-Pastos Grandes salt flat. Second, there is the $767 million purchase made by Zijin Mining Group of Neo Lithium Corp. to keep the Salar de Tres Quebradas, in Catamarca.
As regards direct foreign investment, Argentina also occupies a preferential place. Last year, The Chinese company Chery Automobile announced the investment of 225 million dollars to develop an electric car factory. Meanwhile, Liex, a subsidiary of the litiferous company Zijin Mining, announced its intention to build a new lithium carbonate factory in the country with an investment of 380 million dollars.
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