Argentina’s local economy receives injection of Chinese investment – World

Experts say China’s strong ties with Argentina are increasingly being felt at the local level, especially in less developed provinces, which is helping to boost the local economy.

The northern provinces, such as Salta, Jujuy, Catamarca and Tucuman, are located on the periphery of the Argentine national economy. To address this problem, the northern provinces of Argentina have been particularly active in engaging directly with China, aware that Chinese investment is a key support.

“The northern provinces lag behind the central provinces of the country. They often have fragile structures of primary production,” said Stella Juste, a researcher at Argentina’s National Council for Scientific and Technical Research.

“However, they found a point of complementarity with China’s interests in the region,” she said. “This is extremely important for the future of bilateral relations and especially for the economic development of these provinces.”

These relationships and related investments are often fueled by China’s Belt and Road Initiative. The BRI has played a key role in deepening China’s relationships in Latin America.

Direct efforts by provinces to strengthen their links with China have met with some success, with many securing Chinese support for projects, including the Cauchari Solar Park in Jujuy, the largest in Latin America, and the Cafayate Solar Park.

As Sebastian Schulz, a researcher at Argentina’s National University of La Plata, said, Catamarca and San Juan have used their ties with China to build wind farms.

“These projects were accompanied by the creation of real jobs, the construction of a network of connections and the inflow of foreign currencies necessary for the country,” said Schulz, an expert in sinological studies.

Schulz also linked the development of renewable energy projects in Argentina’s northern provinces to China’s new development concepts, which include internationalization and the promotion of low-emission industries over the next three decades.

Since joining the BRI in February 2022, membership has helped Argentina strengthen its relations with China, bringing benefits to individual provinces.

Such projects have allowed Jujuy to diversify its production base and become a net producer of renewable energy. This is partly due to the province’s relationship with Power-China, a global developer of power plants, which is helping to build and operate the Cauchari Solar Park.

Argentina is the world’s fourth largest lithium producer, with a third of its lithium exported to China.

The provinces of Jujuy, Salta and Catamarca are the centers of the country’s lithium industry. Last year, more than 40 percent of Argentina’s lithium exports went to China, compared with 9 percent to the U.S., El Pais reported.

Chinese companies invested $3.2 billion in mining projects in Argentina between 2020 and 2023, including seven lithium projects, it said, citing government data.

“China’s actions in Argentina and Latin America in general are complex and characterized by a diverse presence on the ground. That’s a remarkable feature of the relationship,” Juste said.

The author is a freelance journalist writing for China Daily.