- The Washington Times - Thursday, November 11, 2004

BUENOS AIRES — Argentine investors are driving up share prices ahead of a visit by Chinese President Hu Jintao, who arrives in the region today dangling the promise of billions in new investment in return for oil, gas and nuclear fuel.

His entourage, which includes 200 Chinese businessmen, arrives today in Brazil and continues to Cuba and Argentina. The tour concludes in Santiago, Chile, with a two-day Asia-Pacific Economic Cooperation summit that will be attended by President Bush.

China, which more than doubled its trade volume with Latin America last year, is looking at the region as a source of natural resources for its explosive economic growth. The Latin American nations, meanwhile, see Chinese investment as the key to kick-starting their economies, which are struggling to recover from recent failures.

Nowhere is that more apparent than in Argentina, which is counting on a trade accord, expected to be signed next week, to provide the nation’s first major capital infusion since its economic collapse in 2001.

Earlier this week in Buenos Aires, feverish media speculation, spurred by high-ranking government officials, projected that the accord could bring $20 billion in Chinese investments, mostly for infrastructure and energy projects.

The rumors sent the Buenos Aires Stock Exchange to record highs on Friday. But Chinese officials downplayed expectations this week while underscoring Beijing’s desire to strengthen trade ties, which are largely based on Argentine soybean exports.

Analysts said Mr. Hu is mainly interested in securing new energy supplies to meet his nation’s burgeoning needs, projected to reach the equivalent of 12.8 million barrels of oil per day by 2025.

Brazil, for example, is negotiating to sell Beijing uranium and uranium-enrichment technology, while Argentine officials have hinted at transferring technology to make Cobalt 60, a radioactive isotope commonly used in industry.

Argentina’s National Commission of Atomic Energy is a major producer of Cobalt 60, and Argentine officials, according to a document prepared by U.S. scientists at Los Alamos National Laboratory in New Mexico, say they control 10 percent of the world’s cobalt market.

“The opportunities between China and Argentina are very, very big,” said Juan Llach, a former vice minister of economics and current dean of the economics department at IAE Universidad Austral in Buenos Aires. “China wants to make sure that it has a reliable source of natural resources, and for that reason, it is willing to invest in our infrastructure.”

In Brazil, representatives from the China National Petroleum Corp. are expected to hold talks on a plan to co-invest in two Brazilian gas pipelines.

And in Argentina, officials of China Petrochemical Corp., China National Petroleum Corp. and China National Offshore Oil Co. will meet with representatives from Argentina’s state oil company.

Both South American and U.S. officials have taken pains to say that China’s burgeoning interest in the region will not, as the Argentine newspaper Clarin put it, “cause a short circuit with the United States.”

Another paper quoted the U.S. ambassador to Buenos Aires, Lino Gutierrez, as saying Washington was not worried about Chinese penetration in Argentina.

And James A. Dorn, a China specialist at the Cato Institute in Washington, said, “I doubt if this will have much impact on U.S.-China relations, which is a complex relationship.”

John Tkacik, an analyst at the Heritage Foundation and former head of the U.S. State Department’s China desk, said China will use the growing relationship to harvest support for its territorial claims over the Republic of China (Taiwan).

“Chinese efforts to establish itself in Africa and Latin America have a political dimension, the most immediate being on Taiwan’s foreign policy,” Mr. Tkacik said.

• This article is based in part on wire service reports.

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