The Minister of Economy, Sergio Massa will land in Shanghai this Tuesday where it plans to develop an intense work schedule that includes negotiations with representatives of the Chinese government and the main companies of the Asian giant, in search of achieving results that help mitigate the drain on reserves. Massa will meet over five days with executives of energy and infrastructure companies, with the head of the central bank (People’s Bank of China) and also with the Brazilian Dilma Rousseff. But what are the main objectives?
1. Widen the swap
The presence of Miguel Pesce, the head of the Central Bank, is no coincidence. The intention is to deepen the central bank swap and expand the use of the yuan, which will allow it to have more firepower when it comes to intervening in the exchange market.
“Currently we are using the US$5,000 million available for commercial exchange with China. Now we are negotiating to expand that number of free availability, always within the general agreement of US$18,000 million,” anticipated sources from Economy.
As Ámbito learned, Alberto Fernández and Xi Jinping agreed to activate $5 billion of the swap when they met at the Bali, Indonesia summit. The first agreement signed between the BCRA and the People’s Bank of China (BPC) was in mid-January. The model that was negotiated two years ago is the one that opened up the possibility of operating in local currencies in foreign trade, which is now being used more and more. Now, that same agreement must be renewed and the official search is to extend it to another $5 billion.
2. Meeting with investors
A meeting with directors of the Chinese company Gezhouba Group Corporation (CGGC) to monitor the state of execution of the works of the Santa Cruz river dams, as well as announce the increase in Argentine exports in the area of meat and derivatives with the opening of new markets by the People’s Republic, reported diplomatic sources and of Economy.
The day will continue with a working meeting with the representatives of the power china company, that will have as a guiding thread a battery of projects related to the energy development of the country.
During his six-day stay in two of the largest cities in China, Massa will hold meetings with the board of directors of the companies CET-State Grid Corporation, the largest electricity distributor in that country; Tibet Summit Resources (mining); Ganfeng Lithium, the largest lithium producer in China and the third largest in the world, and Tsinghan Holding Group (a steel and nickel producer).
The objective of the succession of meetings is “to promote investments in different Argentine provinces linked to the development of mining,” reported from the Palacio de Hacienda.
Among the novelties that could arise is also the possibility that the Asian giant finances the second section of the Néstor Kirchner Gas Pipeline.
China is open to future investment, especially in mining, electricity distribution and drinking water provision.
At the same time, he wants to analyze, together with the Argentine counterpart, the current status of projects already launched -with financing provided by Beijing- that face obstacles, among which are the dams on the Santa Cruz river and the Belgrano Cargas railway.
3. Silk Road
From the priorities of the Asian giant, a key moment of the visit will be the signing of the Belt and Road Cooperation Plan, which Massa will sign on behalf of the Argentine State together with the president of the National Development and Reform Commission, Zheng Shanjie. .
The Belt and Road Initiative, also known as the Silk Road, It is a commercial and financial project that Beijing considers strategic and which consists, among other things, in facilitating financing by Chinese banks for large-scale infrastructure works in different parts of the planet.
Argentina adhered to this Initiative together with dozens of countries around the world, and later formalized this adhesion with the publication in April 2022 of the Memorandum of Understanding in the Official Gazette, which among other objectives aims to promote the use of “national currencies”. in investment and bilateral trade.
4. The entry of Argentina to the bank of the BRICs
The expectations are placed on what can happen in the two sessions in which Massa will participate with those who lead the NBD, the bank of the Brics group.
The meetings will take place tomorrow and Wednesday, with the presence of the Ministers of Economy or Finance of the countries that make up the forum of emerging countries -Brazil, Russia, India, China and South Africa-.
Another actor that could collaborate with Argentina in terms of financial assistance is the IMF, with which Massa has been carrying out a complex negotiation in which he hopes to get the multilateral organization to advance the disbursements scheduled for the remainder of the current year.
Source: Ambito
