Interview: Experts highlight potential for Sino-Argentine cooperation in manufacturing sector

Sino-Argentine cooperation in the manufacturing sector shows great potential, market analysts Matias Carugati and Jorge Castro said Wednesday.

In an interview with Xinhua, Carugati, chief economist at consulting firm Management & amp; Fit (M&F), said "for Argentina, the importance of trade ties with China was made clear by two figures."

Some 7 percent of Argentina's exports are destined for the Chinese market, making China one of the country's four top trading partners, and 17 percent of Argentina's imports come from the Asian giant.

Commerce between the two falls into the traditional pattern of international trade, noted Carugati, "with Argentina supplying agricultural goods and China providing machinery."

Some 94 percent of Argentina's exports to China are agricultural products, while 60 percent of its imports from the Asian giant are durable items, parts and accessories, he noted. Taking this equation into account, "the potential for cooperation is significant," he said.

By increasing trade exchange, said Carugati, China can supply the capital goods that Argentina needs to produce agricultural products, "adding value to basic production and increasing foreign revenue generation in an economy that suffers from external restrictions."

As the International Monetary Fund noted, Argentina's "ongoing standoff with holdout investors leaves the country shut off from global bond markets," a primary source of financing.

Carugati acknowledged "the challenge is enormous, for several reasons," citing Argentina's "tendency to close its economy and try import substitution," as well as its "fear of an avalanche of Chinese products generating reactions ... that would be difficult to overcome."

Still, he believes these issues should not get in the way of "the commendable aim to bolster ties with China, but instead force us to find solutions."

Castro, director of the Strategic Planning Institute and an expert on Sino-Argentine ties, noted Chinese investment in Latin America's manufacturing industry has already begun to increase.

In Brazil, for example, China has invested more than 10 billion U.S. dollars in the sector, he said.

It remains to be seen whether "the next phase of Chinese investment in the country (Argentina)" is directed towards the manufacturing industry, and not just infrastructure or the oil sector, he said.

An indication of what direction China's trade cooperation with Argentina might take came a few days ago, when its ambassador in Buenos Aires, Yang Wanming, addressed a seminar on bilateral ties organized by the Political, Economic and Social Studies Foundation for the New Argentina (FEPESNA).

"The three engines of trade, investment and finance have been turned on simultaneously and each reinforces the other, promoting the firm and steady development of practical cooperation, accompanied by an improvement in quantity, quality, diversity and balance," said Yang.

The two countries are "diversifying their trade products (and) optimizing the trade structure even more," said Yang, adding "today, developing bilateral ties face important opportunities." Endi