BUENOS AIRES, July 18 Argentina on Friday will
sign deals to borrow $7.5 billion from China, its Cabinet chief
said, at a time when the Latin American country cannot tap
global capital markets due to disputes over unpaid debt.
Among the 19 agreements to be signed, Argentine President
Cristina Fernandez and her Chinese counterpart, Xi Jinping,
will agree on a loan for $4.7 billion from the China Development
Bank for the construction of two hydroelectric dams in
The Chinese bank is also expected to grant 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.
"Regarding the total amount, it is about $7.5 billion,
covering cooperation agreements to finance infrastructure
projects and this bilateral trade deal," Cabinet chief Jorge
Capitanich told reporters.
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, will also sign 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.
"This will allow the flow of reserves to stabilize,"
Argentina signed a similar deal with China in 2009.
Stringent import and capital controls imposed by Fernandez's
government have deterred foreign investment and forced the
central bank to drain its foreign reserves to shore up an ailing
China is Argentina's second-largest trading partner after
neighbor Brazil. In 2013 Argentina's trade deficit with the
Asian country increased more than 20 percent to $5.8 billion.
China's Gezhouba Group Corp and Argentina's
Electroingenieria last year won contracts to build the two dams,
which will have a combined generating capacity of 1,740
Xi arrives in the capital city of Buenos Aires on Friday
after participating in a summit of emerging BRICS economies in
Brazil earlier in the week.
(Reporting by Jorge Ataola and Richard Lough; Editing by Lisa