Argentina Signs An Agreement with China to Enter The Belt and Road Initiative

Last February 6, in the context of the 50 anniversary of the establishment of diplomatic relations between Argentina and China, President Alberto Fernández and his Chinese counterpart Xi Jinping signed a Memorandum of Understanding (MOU) between the People's Republic of China and the Argentine Republic on cooperation, as part of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (Belt and Road, or B&R), among other cooperation documents. 

The Belt and Road Initiative is an economic project launched by China in 2013 with the purpose of boosting cooperation and connectivity with the rest of the world through the creation of two major routes: a land-based one (Silk Road Economic Belt) and a transoceanic one (Maritime Silk Road). 

The project was initially focused on Central Asia, but it gradually expanded its participation to other regions and currently, more than 140 countries in the world participate in it. From Latin America, 19 countries have joined, while Colombia, Mexico, and Brazil have not joined yet.

The initiative promises to develop hydroelectric, railway, technological, and infrastructure projects, as well as to deepen cooperation in the areas of trade, agriculture, energy, mining, investment, and financing. For Argentina, this political and strategic decision means US$23 billion in financing for announced investments and projects. 

The financing was agreed in two stages. The first one for US$14 billion in existing projects to renovate the railway network and hydroelectric power plants, which have already been approved for financing under the Strategic Dialogue on Economic Cooperation and Coordination. In a second stage, approximately 9.7 billion dollars are expected to be disbursed, which will be presented once Argentina joins the Belt and Road Initiative and will be executed together with a set of relevant infrastructure projects for energy supply, water, and sewage networks, transportation, and housing construction. This way, the project seeks not only to promote actions and projects but also to deepen, innovate and diversify the economic relations between the two countries.

Together with the New Silk Road agreement, other thirteen cooperation documents were subscribed for green development, digital economy, space, technology and innovation, education and university cooperation, public media, nuclear energy, earth sciences, and agriculture. A joint action plan on Agricultural Cooperation (2022 - 2027) was included, identifying priority areas of cooperation in the field of agribusiness.

The Belt and Road Initiative will allow, in the medium term, to obtain tangible results in bilateral trade and investments for the productive sector and the development of technological skills.