Macri's suspension of Chinese hydroelectric project in Argentina prompts soy oil boycott by China

[forest444]

The Argentine Embassy in Beijing confirmed that China has suspended purchases of soybean oil from Argentina, its largest supplier, for at least the remainder of 2016.

While Chinese officials have not officially disclosed reasons for the move, the boycott follows a unilateral decision by the right-wing Mauricio Macri administration to indefinitely suspend construction of two large hydroelectric dams that were to be built with China in southern Argentina.

The Néstor Kirchner-Jorge Cepernic Hydroelectric Complex, slated for the Santa Cruz River in Argentina's windswept Patagonia region, was awarded in August 2013 to the Chinese state construction firm Gezhouba and the private Argentine firms of Hidrocuyo and Electroingeniería. The complex, 85% of whose $5 billion price tag was to be financed by China, was designed to add 1,740 MW to installed capacity once completed in 2020 (nearly 5% of Argentina's total).

The Macri administration had already strained relations with China in April by cancelling construction of two 750 MW nuclear power plants (the fourth and fifth in Argentina) agreed to last November. China had similarly agreed to finance 85% of this second project, worth some $15 billion.

Both commitments were secured by Macri's predecessor, former President Cristina Fernández de Kirchner - leading to speculation that the projects were scuttled for political reasons. In the case of the canceled nuclear power plants, industry sources have also pointed to "U.S. business interests, which have been intensely lobbying Macri to nix the project."

Rising trade deficit

While soy oil made up only about 7% of Argentine exports to China, the boycott is likely to exacerbate Argentina's yawning trade deficit with the Asian giant. This trend, which began in 2008, led to a similar dispute in April 2010, when China suspended Argentine soy oil imports in retaliation for anti-dumping measures taken by former President Fernández de Kirchner.

The dispute was resolved in May 2011; but Argentina's trade gap with China has continued to worsen, growing nearly 12-fold from $537 million in 2008 to $6.4 billion in 2015 on rising demand for Chinese industrial goods.

China imported 808,000 tons of soybean oil in 2015, of which Argentina supplied 65% (525,000 tons). Argentina, the world's top exporter of soy oil, shipped a record 5,757,000 tons in 2015 - representing $4 billion, or nearly 7%, of all merchandise exports. The largest market, however, was by far India, which purchased 37% of Argentine soy oil exports in 2015; China's share was 9%.

At: https://translate.google.com/translate?hl=en&sl=es&u=http://supercampo.perfil.com/2016/10/china-paralizo-la-compra-de-aceite-de-soja-a-la-argentina/&prev=search

[Judi Lynn]

1. This seems incredibly stupid. The only reason can be political. Good grief!

I surely hope someone will leak the name of these "U.S. business interests" who are so powerful they can compel an Argentinian President to screw his people this badly, when he surely understands how dead wrong it is to do this.