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the arrival of more currencies could come from China

the arrival of more currencies could come from China

With few reserves, a historic drought and the need for dollars to sustain activity, the Minister of Economy, Sergio Massa, aims to get more foreign currency. The new “rabbit in the galley” to add dollars could come from China: continue with the currency swap, advance with the Silk Road and adhere to the Brics bank. Also, direct investments in lithium and copper, and in infrastructure, such as railways, dams and solar parks.

“There will be more things, I want Massa to capitalize on it when he travels to China”assured the Argentine ambassador in China, Sabino Vaca Narvajawho is traveling in Argentina to “push in person” the fine print of the agreements.

Massa could travel to China on May 8, together with governors and businessmen. “The heart of the tour will be to sign the Silk Road cooperation plan”Vaca Narvaja explained. It is that what was signed last year was the memorandum of understanding, and the next step is to list the priority projects. At that time, investments in technology and infrastructure had been estimated for almost $30 billion. In addition, the third multilateral forum on the new silk routes could take place in October, with 274 countries.

“Disbursements already underway in hydroelectric plants, in railways such as Belgrano Cargas and the Caucharí Solar Park will be accelerated. And apart are the direct investments of companies that are accelerated when there is a high-level visit, “said Vaca Narvaja.

Another topic on the economy minister’s agenda will be the formalization of Argentina in the New Development Bank of the BRICS, made up of China, Brazil, Russia, India and South Africa, which finances infrastructure projects in emerging economies. “There is a consensus that we join the expanded BRICs,” said Vaca Narvaja, although geopolitical disputes between China and India could also mean an obstacle.

In addition, he sees as “positive” the trip that the president of Brazil will make at the end of March, Luiz Inácio Lula Da Silva, to China. “It would be good in terms of Unasur if Brazil also joined the Route, as Chile and Uruguay did,” added the ambassador.

Asked about the need for foreign currency that Argentina has, Vaca Narvaja anticipated that in the coming months they could be made available the third stage of the currency swap with China. “Of the US$5 billion announced, US$3 billion were made available, and another US$2 billion could be available in the coming months”, assured the Ambassador. These are currencies (yuan) that Argentine businessmen use to trade with China.

“Massa’s agenda will also include investments by Chinese companies in Argentina, in sectors such as lithium and copper,” said Vaca Narvaja. Regarding the potential for exports in the mining sector, the Ambassador explained: “Chile exports minerals for US$57 billion and we for US$3,000 million. With China, many question that there is a trade deficit, but China is willing to buy more from us, ”he explained. In fact, he reported that Chile and Brazil have a positive trade balance with China due to the sale of minerals.

Vaca Narvaja, which already has a Chinese name (Niu Wang Dao) ventures to project that China could be Argentina’s main trading partner three years from nowespecially for lithium. China is the second country in the ranking of lithium investments, with US$ 1,756 million since 2020, and is first in the ranking of acquisitions and mergers.

The Ambassador estimates that China could grow almost 6% in 2023. “They criticize us for anything we do with China, they don’t understand that China must be seen in pragmatic terms, as Uruguay or Chile do, because they could help us solve structural problems ”, he analyzed.

However, as a self-criticism, he assured that commercial diplomacy with China should be expanded, but with Asia in general. “We think foreign trade relations for a world that no longer exists,” she opined, due to the number of trade tours and embassies that exist in the West over the East. Her goal is to open seven consulates in China.

Trade deficit

In fact, beyond the specific issues already announced, such as Chery and Gotion to manufacture electric cars and batteries in Argentina, Vaca Narvaja assured that there are other segments to explore: “There are things that Argentina imports today and could export, and China is interested in them. From a fertilizer plant to LNG, in fact when it is winter here it is summer, so long-term contracts could be signed, and take advantage of the fact that hydrocarbons could be prohibited in 40 years.” In addition, Vaca Narvaja does not rule out that an agreement with China may be back on the agenda for the pig farms. “There are companies and provinces that want to do it, but communication must be improved,” he assured.

In this sense, he assured that neighboring countries could “beat Argentina” and reach markets in China that Argentina could also supply: Chile with wine or Uruguay with meat, cellulose and offal. “There are e-commerce platforms in China with 700 million users,” she reported.

For Vaca Narvaja, another sector with potential is tourism: “They are the country that spends the most on tourism in the world, and post-pandemic it will be higher.” For this, he assured that he is working on the existence of a direct flight, improving the bureaucracy of Visas and closing improvements with Banco Nación to promote digital means of payment. “Currently 70,000 Chinese tourists travel to Argentina, who They spend an average of $10,000 per trip. Imagine if 500,000 people did tourism,” he said.

Source: Ambito

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