This newsletter summarizes the trade and economic importance of a balanced relationship with China for Argentina’s financial and economic development.
Last week, Argentina has reached an agreement with the IMF that will provide the country with a much needed sustainable debt agreement. That agreement though extremely important must be accompanied by an aggressive international campaign to attract foreign investments and expansion of trade to meet its obligations. This explains the visit of the President of Argentina to Russia and to Beijing.
Less than a week after Argentina agreed with the IMF on a new $44.5 billion standby deal, a major breakthrough after months of tense talks with IMF officials to restructure a debt that the country could not repay, Fernandez met his Russian counterpart, Vladimir Putin, in the Kremlin to strengthen bilateral cooperation and trade relations.
Beyond the importance of the visit of the Argentine president to Russia, China was the main target of the trip and the one that could trigger more financial and economic benefits for Argentina. In effect:
Chinese new direct investments
Xiaomi, the Chinese manufacturer of smartphones, will make a millionaire investment to position its brand in Argentina through the assembling of its phones and accessories and the opening of official stores.
The announcement is expected to be made by the company itself within the next 60 days at a special event.
To meet its goal of expansion in the country, Xiaomi agreed to assemble its cell phones in Tierra del Fuego, a province that provides tax advantages and incentives. The Argentine government of President Alberto Fernández has extended the so-called industrial promotion regime for the Province of Tierra del Fuego, Antarctica and South Atlantic Islands (which technically includes British Overseas Territories like the Falkland Islands claimed by Argentina).
In fact, its Redmi Note line quickly became one of the favorite models for users since the launch of the first one more than six years ago. Arguably one of the best Redmi smartphone currently available, the Redmi Note 9 Pro offers a whopping 6GB RAM and a 5020 mAH battery. It also comes with a 6.67-inch LCD screen that has an impressive resolution of 1080 x 2400 pixels.
Although it was established for its smartphones, the firm also has a wide range of items: computers, tablets, televisions, electric scooters, vacuum cleaners, among others. One of his latest announcements was the Xiaomi Car, a 100% electric car that will hit the market in 2024 to compete head-to-head with Tesla, from Tesla Motors, the company of billionaire investor Elon Musk.
This innovative car will be entirely manufactured in Beijing, the Chinese capital, where it will have the capacity to produce more than 300,000 units per year.
“Xiaomi aims to provide high-quality intelligent electric vehicles to its users around the world to enjoy ubiquitous intelligent life,” he said in a brief statement. Argentina already imports six different Chinese cars.
Exports and imports
In 2021, Argentina’s exports to China were 6.16 billion dollars, which marked an increase of 17% year-on-year. Among the main exported products were soybeans (31.6% of the total) and boneless beef (23.7%).
On the other hand, Argentine imports from China reached 13,52 million dollars, implying an expansion of 56% year-on-year. The main imported products were automatic machines for data processing, digital, portable, with 2.8% of the total purchases from that destination, and vaccines for human medicine, with 2.8%.
Main Argentine exports to China
Main Argentine imports from China
The above is a compendium of business news from the media.
If you need further information please contact Carlos Alfaro at cealfaro@alfarolaw.com.
