China's president visit to Buenos Aires sparked all sort of versions about huge investments from the Asian country. Local media even speculated about a Chinese full acquisition of Argentina's obligations with the IMF.
As keeps on its efforts to successfully renegotiate its $100 billion debt with foreign creditors, Argentina lives a strange “Chinese fever”, nowadays. Rumours about huge investments coming from the Asian country have led to any sort of speculations among the local media and even high ranked authorities within Argentina’s government.
Rumours came shortly after Buenos Aires announced it was planning to announce “extraordinary measures” aimed to take the South American country out of the hole in which fell in 1998 and it is partially trying to climb up now.
Local press then speculated that the announcements were related to the forthcoming visit of Chinese President Hu Jintao, scheduled for November 23 after touring Chile, Brazil and Cuba. As local authorities did not rule out such versions, newspapers, magazines and even top ranked officials gave green light to imagination.
Grounding versions on the necessity of China to get rid of an enormous mass of US Dollars it has stocked up in its Central Bank, local analysts speculated about huge investments coming from the Communist country. A lot was written about the electrification of railways, construction of ports, erection of power plants, off-shore oil well drillings and technology transference.
The most audacious of them even commented about the “imminent decision” of the Chinese Government to buy the bulk of the Argentine obligations to the International Monetary Fund. If that happens –analysts weighed- China would become Argentine creditor Number one and its new strategic partner in the Americas.
Even the opposition commented about the new situation warning about the imperial ambitions of China. “China will be our new England”, they said, linking the forthcoming era to the times in which Argentina was an economic colony of the British Empire early last century. The magic figure was $20 billion. “China will invest $20 billion in Argentina”, titled one of Argentina’s most influent dailies.
As the situation was turning out of control, Chinese Information Minster, Yang Yang, Monday told the press in Buenos Aires, that speculations were exaggerated. “We cannot put $20 billion in Argentina when the total amount of our investments outside China only reach to $50 billion”, said he while opening a week of Chinese culture in Buenos Aires.
After the declarations of Yang Yang, the Argentine Government went out to cool down expectations. “Chinese investments will be only a part of a broader program to recover our economy”, officials told.
At the end of the day, it looks like President Kirchner’s administration will seal some cooperation agreements with Hu Jintao at his arrival in Buenos Aires. No matter the case, Mr. Jintao will be welcomed to Buenos Aires with all the honours, like a marvellous Chinese magician willing to help poor Argentina.
Latin America has been a key investment destination for China.
Around US$1.04 billion flowed into Latin America in 2003, accounting for 36.5 per cent of the year's total, according to statistics from the Ministry of Commerce. Latin America had US$4.62 billion, or 14 per cent of China's accumulated outbound investment.