A high-level Argentine delegation arrived in China Aug. 31 for three-days of meetings to follow up on agreements signed during President Xi Jinping’s July 19-21 visit to the country, and also to prepare for President Cristina Fernandez de Kirchner’s visit to China later this year.
The delegation includes Finance Minister Axel Kicillof, Planning Minister Julio De Vido, head of the nuclear energy agency, CNEA, Norma Boero, Public Works Minister Jose Lopez, president of Nucleoelectrica Argentina Jose Luis Antunez, and the head of the YPF oil firm Miguel Galuccio, who arrived from Malaysia where he just signed an agreement with that country’s Petronas oil firm for investment in Argentina’s Vaca Muerta shale oil/gas reserve.
Argentine mouthpieces for the vulture funds claim the trip is done out of panic that China’s announced investments in the country will fall through, since the country is now in “default,” and this allegedly violates agreements signed by Xi Jinping, as the pro-Empire La Nacion claimed last week. Last week, billionaire Paul Singer’s NML vulture fund subpoenaed documentation from Bank of China and the Industrial and Commercial Bank of China on their planned investments in Argentina, looking toward possible asset seizure. These entities, plus the China Development Bank Corporation (CDB), will be investing $4.7 billion in the Kirchner-Cepernic hydroelectric complex in Santa Cruz and $2.1 bn. in the Belgrano Cargas railroad, while the China National Nuclear Commission (CNNC) plans to help finance, on very attractive terms, and build Argentina’s next nuclear reactor, Atucha III.
As De Vido explained to Pagina 12, there is no issue of the promised credits falling through, as Article 7 of the contract signed with China stipulates this would only occur were there to be some new occurrence of default, unrelated to the current conflict with the vulture funds. On Aug. 26, Pagina 12 quoted officers of Electroingenieria, the Argentine construction firm that will build the Santa Cruz hydroelectric project in association with China’s Ghezouba company, who reported that the first $500 million tranch of the Chinese loan will arrive between October and November.
But, as the financial daily Cronista pointed out on Monday, both China and Argentina want to ensure that Chinese loans, including the Bank of China’s currency swap agreement with the Argentine Central Bank, cannot be embargoed. To this end, Bank of China officials will be travelling to Buenos Aires in the next two weeks, to work out the details on this. This month, Argentina plans to activate the swap, in the amount of $1 billion, to bolster reserves, given the debt payments due this month will draw on those reserves.