China will invest more than US$19 billion in Argentina over the next 10 years, deepening trade links between the world's fastest growing economy and South America's second-largest, Argentine officials said yesterday.
The announcement of the trade and investment agreements came as President Hu Jintao opened a two-day visit to Argentina, part of a four-nation Latin American tour.
Argentine officials said the multibillion dollar investments would be made in energy production, infrastructure and Argentina's railway system in what amounts to the largest bilateral trade accord for the South American country since its 2001 economic crisis.
"Our aim is to strengthen this relationship despite the distances," between the two countries, said Argentine President Nestor Kirchner.
The largest investment includes a Chinese pledge to invest US$8 billion in the coming years to expand Argentina's railroads, US$6 billion over five years in construction projects, along with US$5 billion in oil exploration.
Other projects include investments in communications and satellite technology, raising the total investment amount to US$19.7 billion, according to Argentine and Chinese officials.
Analysts say China's interest in a region recovering from recent economic turmoil is largely due to a growing Chinese need for commodities and other natural resources readily abundant in Latin America.
"China is increasingly prioritizing Latin America as an economic power," said Dan Erikson, an analyst at the Inter-American Dialogue, a Washington policy group. "China is becoming a tremendous importer of raw materials, much of which Latin America has to offer."
Rapid heavy industry development in China and rising living standards have contributed to an overall 50 percent increase in South American imports over the last three years, according to Wenhui Zhu, an expert on Chinese trade at the Brookings Institution in Washington.
"The two sides are complementary," Zhu said. "South America is resource-rich, and it's a growing market."
After holding talks with his Argentine counterpart in the afternoon, Hu told the press: "We have reached wide-ranging consensus on bilateral cooperation and international issues of mutual concerns."