On his last day of business in Beijing, Sergio Massa and his entourage were able to avoid the heavy traffic of this city of wide boulevards. They arrived on time thanks to the escort who went to the Four Seasons hotel, a symbol of so-called Asian luxury and which in a few days will host the national team with Leo Messi in the lead.
Massa was the main speaker of the Investment and Tourism Business Forum, before the CEOs and executives of about 50 Chinese companies, including major tourism agencies.
Thus, he praised the swap scopes which allows different uses, among which the interventions to stabilize the exchange rateinvited to invest in Energy and Mining and finally announced it the gas bill that provides for a 50-year framework has been sent to Congress and special tax treatment for such investments. Specifically, Chinese companies are interested in liquefied gas plants that allow their export. But the law will have to wait before a paralyzed Congress in an election year.
In inviting these companies to invest in the country, Massa referred to the advantage of having the exchange rate between pesos and yuan. That exchange has been renewed by others three years for US$19,000 million and of that total allow up to US$10,000 million to be used as freely available.
Massa defended the mechanism and reacted to doubts about its use and scope raised by the opposition and some experts as soon as it became known that it had been renewed. They are looking for the Minister to explain in Congress together with the president of the BCRA, Miguel Pesce.
19,000 kilometers away, Massa elaborated on what that means and said it like this; “The design and implementation of the exchange with our Central Bank is crucial, because it allows us to imagine in the case of companies in the People’s Republic of China the opportunity to develop an investment currency flow based on the mobilization of the yuan as an investment tool. The exchange enables Argentina not only for use for trade flows but also for use as an investment currency flow tool and also of mechanisms of use of our Central Bank for each type of intervention”.
As he explained, “the use of the yuan allows us to break with the idea that difficult cycles are linked to the formation of foreign assets, due to distrust of our currency, and therefore the exchange and use of the yuan as a tool or mechanism for investment”.
Another question about the exchange, whose contract is it confidential, is its relationship to the fulfillment of the agreement with the IMF. From the entourage they summarized that if the agreement with the Fund falls, the exchange falls.
It was later learned that this was a clause introduced during the Macri government. Martín Guzmán renegotiated that point when he was a minister and had to renew the exchange with Pesce in August 2020. At that time he managed to undo the exchange with China to keep a program with the IMF in place.
The minister also spoke to Chinese entrepreneurs of the complementarity between the two countries based on sectors such as mining, energy and agri-food. Aware that in a few months there will be a new government, he underlined state policies for Argentina to become the world’s second largest exporter of lithium in 5 years to generate a sector that exports 20 billion dollars
In passing, he referred to Vaca Muerta, which he still has Chinese investments have not arrived. “We have reserves for 140 years that guarantee the supply. Last year investments in this sector grew by 42%, which is a tractor that allows us to partly compensate for the worst drought in history,” Massa said.
The tourist agencies were the most enthusiastic among the participants. Massa communicates that visas for theChinese tourists who today take 90 days will be done in 15. And that airlines will fly every 15 days in China with a stopover in Auckland.
“More and more Chinese tourists are choosing Argentina based on its natural destinations and the possibility to do payments in local currency thanks to the direct yuan exchange promotion. This phenomenon leads to a positive impact on foreign exchange earnings for the country as China is now one of the top emitters of tourists in the world and one of the biggest spenders,” Massa said.
The airlines would be the first direct flight to China, initially under a shared code, which will shorten the journey by 10 hours. And the most popular electronic payment methods in China will be able to be used in Argentina.
Argentina is the the first South American country authorized by China to welcome its tourists under a pilot program which he presented to revive global tourism.
According to data from the Tourist Information System of Argentina, during 2022 they entered Argentina 7.4 million foreign tourists. China ranks 16th in hospitality tourism rankings in Argentina with 76,000 arrivals in 2019, with an average cost per stay per person of US$1,860 and an average daily cost of US$122.
The country could go from an average of 70,000 tourists a year to almost 500,000, which would imply a strong inflow of foreign currency due to the spending they do on average. In the weekend of May 1 alone, about 274 million people went on tourist trips to China.
During his presentation, Massa was accompanied by the Argentine Ambassador to China, Sabino Vaca Narvaja; the Minister of Transport, Diego Giuliano; the Secretary of Agriculture, Livestock and Fishing, Juan José Bahillo; and the president of YPF, Pablo González.
At the end of his speech, he received each one in the VIP room of the hotel. Among others, Huawei executives asking neutrality in the case of 5G, i.e. companies can independently choose operators.
Participating companies included China Energy Engineering, Gezhouba, Powerchina, China Railway, China Electric Power Equipment and Technology, ZTE, Xiaomi, China Machinery Enginecring, Tibet Summit Resources, Cnnc, Chery, Shandong Gold, Jinyuan, Great Wall, Zijin, Ganfeng OPPO, Goldwind and tour companies UTour, Qunar and CTRIP to name a few.
In that tete a tete with the minister, some complained that they cannot send components to their Argentine customers. Massa tried to reassure: immediately they can do it in yuan. It was already noon and Massa was waiting for him to visit the Forbidden City board the presidential plane bound for Buenos Aires. It will have two stops, one in Prague and the other in Fortaleza. Arrives this Sunday evening.
Source: Clarin
