ARGENTINA: Chinese President Xi Jinping signs a billion-dollar deal with Argentine leader Cristina Fernandez de Kirchner to build power and rail projects as the debt-burdened South American nation nears possible default

Record ID: 449197

  • Title: ARGENTINA: Chinese President Xi Jinping signs a billion-dollar deal with Argentine leader Cristina Fernandez de Kirchner to build power and rail projects as the debt-burdened South American nation nears possible default
  • Date: 19th July 2014
  • Summary: BUENOS AIRES, ARGENTINA (JULY 18, 2014) (REUTERS) **CONTAINS FLASH PHOTOGRAPHY** EXTERIOR OF GOVERNMENT HEADQUARTERS VARIOUS OF CHINESE AND ARGENTINE FLAGS AT GOVERNMENT HEADQUARTERS VARIOUS OF CHINESE PRESIDENT XI JINPING WITH ARGENTINE PRESIDENT CRISTINA FERNANDEZ GREETING EACH OTHER VARIOUS OF GOVERNMENT OFFICIALS FROM BOTH COUNTRIES SIGNING AGREEMENT VARIOUS OF LEADERS APPLAUDING AGREEMENT (SOUNDBITE) (Mandarin) CHINESE PRESIDENT XI JINPING, SAYING: "These projects are priority for the substantial cooperation between China and Argentina and we hope that the companies in our countries can collaborate and work together, strengthening cooperative ties so as to accelerate the implementation process to finalise the projects as soon as possible so that they may be exemplary models for the mutually beneficial cooperation between China and Argentina, including between China and Latin America and the Caribbean. In this way we can contribute actively to the economic and social development of Argentina." VARIOUS OF BILATERAL AGREEMENT BEING SIGNED (SOUNDBITE) (Spanish) ARGENTINE PRESIDENT CRISTINA FERNANDEZ, SAYING: "The Central Bank of Argentina has signed a financial swap, a financial deal for 11 billion dollars, precisely to achieve stability in the exchange rate at a time when we are suffering from speculative attacks by what, as I mentioned the other day in the Brasilia summit, we refer to as vulture funds." VARIOUS OF LEADERS SIGNING AGREEMENTS
  • Embargoed: 3rd August 2014 13:00
  • Keywords:
  • Location: Argentina
  • Country: Argentina
  • Topics: International Relations
  • Reuters ID: LVA6PQMYIBN8AGZRMW88MV2RAAM9
  • Story Text: Chinese President Xi Jinping travelled to Buenos Aires on Friday (July 18) for the signing of a bilateral deal with Argentina to borrow $7.5 billion from China at a time when the Latin American country cannot tap global capital markets due to disputes over unpaid debt.
    Argentine President Cristina Fernandez and her Chinese counterpart agreed on a loan for $4.7 billion from the China Development Bank for the construction of two hydroelectric dams in Patagonia.
    The Chinese bank also granted a $2.1 billion loan to help finance a long-delayed railway project that would make it more efficient to transport grains from Argentina's agricultural plains to its ports.

    "These projects are priority for the substantial cooperation between China and Argentina and we hope that the companies in our countries can collaborate and work together, strengthening cooperative ties so as to accelerate the implementation process to finalise the projects as soon as possible so that they may be exemplary models for the mutually beneficial cooperation between China and Argentina, including between China and Latin America and the Caribbean. In this way we can contribute actively to the economic and social development of Argentina," announced President Xi Jinping.
    Argentina is the world's third-largest exporter of soy and corn. China is the main buyer of its soybeans.
    Xi, China's first president to visit Latin America's No. 3 economy in a decade, also signed an agreement for an $11 billion swap operation between the countries' central banks over three years that will allow Argentina to pay for Chinese imports with the yuan currency.
    The deal comes as Argentina faces default as a debt deadline looms with "holdout" investors.

    "The Central Bank of Argentina has signed a financial swap, a financial deal for 11 billion dollars, precisely to achieve stability in the exchange rate at a time when we are suffering from speculative attacks by what, as I mentioned the other day in the Brasilia summit, we refer to as vulture funds," said Fernandez.
    Argentina has under two weeks to broker a deal with "holdout" bondholder investors.
    Until it pays up, or reaches an agreement with the holdouts, U.S. District Judge Thomas Griesa will prevent Argentina from servicing restructured debt resulting from 2005 and 2010 debt swaps. That means it could go into default by a July 30 deadline for a coupon payment.
    A potential default for Argentina could also hit Chinese exports, Argentina is its second-largest trading partner after neighbour Brazil. In 2013 Argentina's trade deficit with the Asian country increased more than 20 percent to $5.8 billion.
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