“The Chinese looked first at their continent, then at Africa, and for some years now they have their eyes on Latin America. First of all, they were interested in agricultural and mineral products, and today they are not only the region’s second largest trading partner, but also a good investor,” Jorge Taiana, Argentine foreign minister between 2005 and 2010, told IPS.
As in other Latin American countries, in recent years
China has been a strong investor in Argentina. The environmental impact and
economic benefits of this phenomenon, however, are a subject of discussion
among local stakeholders.
One of the key areas is energy. A study by the
and Natural Resources Foundation(FARN) states that China has mainly been financing hydroelectric,
nuclear and hydrocarbon projects.
Just four percent of these investments are in
renewable energies, which is precisely the sector where the country is clearly
“China’s main objective is to export its technology
and inputs. And it has highly developed hydraulic, nuclear and oil sectors.
There are no more rivers in China where dams can be built and this is why they
are so interested in the dams on the Santa Cruz River,” María Marta Di Paola,
FARN’s director of research, told IPS.
"What we attributed in the past to U.S. pressure
we are now experiencing with China….The dams are a clear example of how this
pressure for economic reasons could be trampling over the nation's
environmental sovereignty.” -- Hernán Casañas
China is behind a controversial project to build two
giant dams in Patagonia, on the Santa Cruz River, which was approved during the
administration of Cristina Kirchner (2007-2015) and ratified by President
Mauricio Macri, despite strong environmental concerns.
The dams would cost some five billion dollars, with a
foreseen a capacity of 1,310 MW.
However, expert Gustavo Girado said that it is not
China that refuses to get involved in renewable energy projects, but Argentina
that has not yet made a firm commitment to the energy transition towards clean
and unconventional renewable sources.
“Like any country with a lot of capital, China is
interested in all possible businesses and takes what it is offered. In fact, in
Argentina it also has a high level of participation in the RenovAr Plan,”
explained Girado, an economist and director of a postgraduate course on
contemporary China at the public National University of Lanús, based in Buenos Aires.
He was referring to the initiative launched by the
Argentine government to develop renewable energies and revert the current
scenario, in which fossil fuels account for 87 percent of the country’s primary
Also participating in this industry are Chinese
companies, which during the period January-September 2017 produced 25 percent
of the total oil and 14 percent of the natural gas extracted in the country.
Since 2016, the Ministry of Energy has signed 147
contracts for renewable energy projects that would contribute a total of 4,466
MW to the electric grid, most of them involving solar and wind power, which are
currently under development.
The goal is to comply with the law enacted in 2015,
which establishes that by 2025 renewables must contribute at least 20 percent
of the capacity of the electric grid, which today is around 30,000 MW.
In this sense, 15 percent of the power allocated
through the RenovAr Plan has been to Chinese capital.
One mega project in renewable energies is the Caucharí
solar park, in the northern province of Jujuy, which is to consist of the
installation of 1,200,000 solar panels built in China, on a 700-hectare site.
The project has a budget of 390 million dollars, of
which 330 million will be financed by the state-owned Export-Import Bank of
China is also behind Argentina’s intention to develop
nuclear energy, since in 2017 it was agreed that it would finance the fourth
and fifth nuclear power plants in this South American country, at a total cost
of 14 billion dollars.
However, the Macri administration announced this month
that it would indefinitely postpone the start of construction of at least the
first of these plants, to avoid further indebtedness and reduce the country’s
high fiscal deficit.
The decision is aimed at facilitating the granting of
a loan from the International Monetary Fund (IMF), after the crisis of
confidence that resulted in a massive outflow of capital and which put the
local economy in serious trouble.
On the other hand, other energy projects funded by
Chinese capital are going ahead, including four other hydroelectric power
plants and thermal plants powered by natural gas.
So far, the investments already committed by Beijing
in the energy sector in Latin America’s third-largest economy total 30 billion
dollars, in addition to projects in other areas, such as infrastructure,
agribusiness or mining.
“The Chinese looked first at their continent, then at
Africa, and for some years now they have their eyes on Latin America. First of
all, they were interested in agricultural and mineral products, and today they
are not only the region’s second largest trading partner, but also a good
investor,” Jorge Taiana, Argentine foreign minister between 2005 and 2010, told
The veteran diplomat recalled a point made by then
U.S. President George W. Bush at the 2005 Summit of the Americas (SOA) in the
Argentine city of Mar del Plata, where the region refused to form the Free
Trade Area of the Americas (FTAA).
“He (Bush) told us,’I don’t know why they care so much
about the FTAA, when what we need to discuss is how we defend ourselves against
China’,” Taiana said.
He maintains that it depends on the decisions of
Argentina and the rest of the countries in the region whether they will benefit
from or be victims of China’s aggressive economic expansion.
“Foreign direct investment is always beneficial. The
secret lies in what conditions the recipients put in place and what their
development plan is,” he said.
“Argentina, for example, built its railways with
English capital, and all the tracks converge in Buenos Aires because the
English were only interested in getting the agricultural products to to the
port. Those are the things that shouldn’t happen,” he added.
Environmental organizations are particularly critical
of the dams on the Santa Cruz River, which begins in the magnificent Los Glaciares National Park and could affect the water level in Lake
Argentino, home to the Perito Moreno Glacier, one of the country’s major
However, the dam contract has a cross default clause
whereby, if not built, Chinese banks could also cut off financing for railway
infrastructure projects they are carrying out in Argentina.
“What we attributed in the past to U.S. pressure we
are now experiencing with China,” said Hernán Casañas, director of Aves Argentinas, the country’s
oldest environmental organisation.
“The dams are a clear example of how this pressure for
economic reasons could be trampling over the nation’s environmental
sovereignty,” he told IPS.
In this regard, Di Paola said that “China has occupied
in Latin America the place previously occupied primarily by traditional
financial institutions such as the World Bank and the Inter-American
“The problem is that it does not have the same
framework of safeguards, so they are able to start infrastructure works without
complying with environmental requirements,” he said.
But Girado sees things differently, saying “the
financial institutions impose conditions on the countries that receive the
credits, which China does not do. In that sense it is more advantageous.”