China signs deals to $10B invest in Argentina’s railways but no progress on soy dispute

Tuesday, July 13, 2010

China to invest $10B in Argentina’s railways

BEIJING — Argentina and China signed a deal for Beijing to invest $10 billion in the South American nation’s railways during a visit by the Argentine president but there was no sign of progress in a dispute over soy imports.

The agreements announced Tuesday during the visit by President Cristina Fernandez come as Beijing expands its role in Latin America through investments in oil and other industries and closer financial ties with the region’s governments.

The railway deals include a $2.5 billion project to upgrade the rail system of Argentina’s capital, Buenos Aires, Chinese news reports said. They said projects would include the purchase of Chinese railway technology.

China is promoting exports of railway equipment and is trying to develop its own high-speed rail technology. A Chinese railway official said in March that state-owned companies are building high-speed lines in Venezuela and Turkey.

There was no sign of progress in a dispute over China’s ban on imports of Argentine soy, a key export for Fernandez’s nation. The Chinese government played down the ban, calling it a normal trade dispute.

The soy dispute is the most pressing issue for Fernandez, who was on the first trip to China by an Argentine president since 2004.

The railway deals were among a dozen agreements announced Tuesday.

Others included a memorandum of cooperation state-owned China Petroleum & Chemical Corp., also known as Sinopec, and state-owned Energia Argentina SA, or Enersa. No details were released.

There was no word on a possible Chinese purchase of BP plc’s stake in Argentina’s Pan American Energy, an oil and gas producer. News reports say BP might sell its 60 percent share to state-owned China National Offshore Oil Corp., which owns 20 percent of Pan American and wants to expand abroad.

Argentine exports of soy oil to China totaled $1.4 billion last year, accounting for a sizable chunk of two-way trade that strongly favored Beijing.

China imposed the soy ban April 1, after saying it found shipments containing excessive levels of hexane, a potentially cancerous chemical used in soy processing. The restrictions also came after Argentina last year imposed antidumping measures on some Chinese goods.

China has denied the soy ban is a retaliatory measure, while Argentina has said its soy products are not contaminated.

When asked Tuesday by reporters about the soy dispute, a Chinese Foreign Ministry spokesman called Argentina an important partner in Latin America and said the problem should be resolved.

“Regarding the import of soybean oil to China, it’s just a normal problem that comes with the development of trade and economic relations,” said the spokesman, Qin Gang. “I believe as long as the two countries follow the spirit of cooperation and mutual benefit and through friendly consultation, a proper resolution will be found.”

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