Argentina is China's Next Investment Frontier

Chinese investment in Argentina has gone from millions to billions overnight. Click to enlarge. (Source: FT.com)

A Wall Street strategist appeared on CNBC last week and when asked in which sectors and companies to invest he replied, “Buy what China wants. The world story hasn’t changed. The place where the growth is is Asia, and the things Asians want are the things that are going to grow in the West.

Argentina knows this first-hand, and the level of Chinese investment here has gone from millions to billions overnight. In a detailed look at the breadth and depth of Chinese holdings on and under Argentine soil, London’s Financial Times today labels the country along with Brazil as China’s New Investment Frontier.

Total Chinese investment in Argentina was a meager US$13 million in 2004, writes Jude Webber, but that figure has grown to US$2.45 billion today in everything from silver in Salta to motorcycles in Cordoba to electronics in Tierra del Fuego. The oil and gas sector probably holds the most potential for both countries in terms of profit potential, but it’s also the most heavily taxed and regulated. “Not a problem,” one Cnooc executive tells FT, expressing optimism there will be positive changes in 2011, the pivotal presidential election year.

Other major Chinese investments in Argentina announced this year include plans to invest US$10 billion in Argentina’s rail network (a move that would accelerate the supply chain of soy and other commodities) and China Railway International’s possible participation in building a new BA Subte line. If approved, Eximbank China would finance the US$1.5 billion G-line extending from Retiro to Cid Campeador. (Full Story at FT.com)

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