A country as vast as Argentina is ripe for high-speed rail travel and indeed intercity rail services are undergoing something of a revival there after years of underinvestment. That makes it a ripe export market for China’s burgeoning rail engineering industry.
Argentina look set to buy some $10 billion of Chinese trains and associated rail equipment for both passenger and freight services. China Development Bank is providing a ten-year 273 million dollar loan to be used to buy Chinese high-speed trains from China Northern Locomotive & Rolling Stock Industry.
It was one of a bunch of deals signed during Argentine President Cristina Fernandez de Kirchner’s just concluded visit at the head of a large trade delegation. It may turn out to be one of the main achievements. Little progress was made on the biggest issue between the two countries, China’s restrictions on the import of Argentine soya products imposed in April on the grounds that chemical residues had been found in some shipments of soya oil, although the action may just be retaliation for Argentine efforts to block imports of Chinese products on anti-dumping grounds and for the President’s last minute cancellation of a state visit to Beijing in January.
China spends some $2 billion a year buying more than two-thirds of Argentina’s soya exports and is the South American country’s third largest trading partner. Suspension of the trade is serious for Buenos Aires which is relying on a rebound in agricultural sales to spur economic recovery and generate the export taxes needed to get its public finances back in some sort of order. A bilateral commission is to be set up to resolve trade differences, but details remain sketchy.
On his trip to South America in April, President Hu Jintao skipped Argentina between stops in neighbors Brazil and Chile. If the two countries can sort out their trade spat, the next time a Chinese president makes a similar journey he might well be able not just to visit Argentina but to do so in a Chinese built train.