The China Signal - May 13
Light rail & a lithium refinery to Argentina's Jujuy province, ESG red flags in Guyana & Argentina, defense equipment to Uruguay
G’day, and welcome to The China Signal. This week, Argentina’s Jujuy province strikes deals with Chinese firms for light rail and a lithium carbonate refinery; ESG red flags for Chinese-backed infrastructure projects in Argentina and Guyana; Uruguay’s Ministry of Defense “pre-awards” China Shipbuilding Trading Co a contract to build their Navy’s Offshore Patrol Vessels as bilateral FTA discussions continue; plus much more. Read on.
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Clean Energy/Infrastructure 🚆
Argentina 🇦🇷
*Note: China.org.cn is a Chinese state-sponsored media outlet
[On Friday May 6], CRRC Tangshan Co., Ltd., a major Chinese high-speed train manufacturer, announced the signing of a new-energy light rail train project with authorities of Jujuy province of Argentina.
This marks the first time that China's new-energy light rail trains are to be used by Argentina's transport system.. The train will adopt lithium battery drive technology, and make full use of the abundant solar energy resources in Jujuy to provide a power source for the vehicle.
As noted in TCS July 2, 2021:
“The Jujuy province, led by Governor Gerardo Morales has been analysed by Margaret Myers as a prime example of growing local, sub-national relations between China and Latin America in her December 2020 report “Going Local: An Assessment of China’s Administrative-Level Activity in Latin America and the Caribbean”. I covered the report in TCS December 11, 2020.” (MH).
Background: CRRC Tangshan Co., Ltd. + CRRC Corporation Limited (“CRRC”) 🔍
Headquartered in Tangshan (Hebei province), China, CRRC Tangshan Co., Ltd. is a rolling stock manufacturer. Originally founded in 1881, it was incorporated as a subsidiary to Chinese state-owned CRRC Corporation Limited (“CRRC”) in 2007.
CRRC is the world's largest supplier of rail transit equipment. Headquartered in Beijing with over 46 wholly-owned subsidiaries, CRRC was formed in 2015 following the China CNR Corporation Limited (“CNR”)-CSR Corporation Limited (“CSR”) merger. It’s been listed on the Shanghai and Hong Kong stock exchanges since the merger.
CRRC ranked 349th on Fortune’s Global 500 2021 List, with revenues over US$34 billion. In June 2020, CRRC was listed as a Communist Chinese military company by the U.S. Department of Defense. It is currently on the U.S. Department of Commerce’s Entity List. (RP)
Critical Minerals 🧱
Argentina 🇦🇷
*Note: Yicai Global is a China state-affiliated media
Hefei (Anhui region)-based Chinese battery maker Gotion High-tech Co Ltd. (“Gotion”) will partner with Argentina’s state-owned Jujuy Energía y Minería Sociedad del Estado (“JEMSE”) miner to build a battery-grade lithium carbonate refinery in the Jujuy province of the South American country. In detail: (RP)
Gotion will build the refinery, [while its] partner JEMSE will provide exploration and mining rights for lithium minerals over an area of about 17,000 hectares and ensure raw materials, power, transport, and land.
The pair will cooperate in downstream areas such as cathode materials and battery manufacturing to jointly develop in the European and American markets... Their respective stakes in the refinery project were not disclosed.
Diplomacy 🕊️
Argentina 🇦🇷 + BRICS / China 🇨🇳
~Above for the full Spanish article~
Between May 20 and June 24, Argentina will participate in the summit of foreign ministers and presidents of the BRICS, following President Xi Jinping’s invitation, revealed Argentina’s Ambassador to China, Sabino Vaca Narvaja.
The grouping first met in 2009. This year, the five countries will meet by videoconference with China as host. This move will help bring Argentina closer to the goal of its "formal entry" to the BRICS, Vaca Narvaja added.
In early April, Brazil’s Economy Minister Paulo Guedes disclosed Argentina’s official candidacy to join the New Development Bank (NDB), the BRICS financial institution created in 2014.
~Above for the full Spanish article~
A new “China-Argentina Bi-National Study Center for Innovation and Technology” was announced via videoconference in a meeting between the two countries’ Ministers of Science and Technology on May 9.
The announcement is only an MOU at this stage. It follows Beijing’s recent approval to import for HB4 soybean strains (TCS May 6). The center aims to study recent science, technology and innovation policies implemented by the two countries, and their impact on economic and social development. (RP)
ESG 🏔️ + Legal ⚖️
Argentina 🇦🇷
China-funded dam could disrupt key Argentine glaciers and biodiversity | Mongabay | May 12, 2022
A hydroelectric, two-dam complex along the Santa Cruz River in Southern Argentina’s Patagonia is facing backlash from conservationists and indigenous communities. Expected to supply around 5% of Argentina’s national energy needs, the project raises concerns about its impact on the surrounding glaciers and the destruction of ancestral Mapuche lands.
Incorporated into China’s Belt and Road Initiative (BRI), the complex is being built by Unión Transitoria de Empresas Represas Patagonia, a partnership between Chinese state-owned China Gezhouba Group Co., Ltd. (* see backgrounder below), together with Argentine Hidrocuyo S.A.. and Electroingeniería S.A., with financing from several Chinese development banks.
Despite protests, lawsuits and court orders to pause construction so that adequate environmental studies can be carried out, work on the complex has [so far] continued.
…The dam complex was [indeed] subject to environmental impact studies during development so that changes could be made to mitigate potential impacts. But in this case, the studies were plagued with inaccuracies and a lack of detail, according to numerous organizations that reviewed them in a lawsuit presented to the Supreme Court.
Further technical details on the project can be found here (in Spanish), as released by Argentina’s Ministerio de Energía y Minería (Ministry of Energy and Mining).
Background: China Gezhouba Group Co., Ltd. + China Energy Engineering Group (“CEEG”) 🔍
China Gezhouba Group Co., Ltd. is a Chinese construction and engineering company based in Wuhan (Hubei province). Its major shareholder (40.8%) is state-owned China Gezhouba Group Corporation (“CGGC”), which is in turn a subsidiary of state-controlled China Energy Engineering Corporation, which forms a part of the state-owned conglomerate China Energy Engineering Group (“CEEG”).
A power and infrastructure-solution global provider, CEEG (alternatively referred to as “Energy China”) ranked 301st on Fortune’s Global 500 2021 List with revenue of over US$39 billion. It is Beijing based, and its business extends to over 140 countries. (RP)
Military Equipment 🛳
Uruguay 🇺🇾
~Above for the full Spanish article~
Uruguay’s Technical Commission of the Ministry of Defense pre-awarded Chinese company China Shipbuilding Trading Co., Ltd. (“CSTC”) with the contract to equip the Uruguayan Navy with its new Offshore Patrol Vessels (OPVs).
Winner amongst other 11 initial competitors from the original 2014 bid, ultimately reduced down to two (the Dutch Damen Shipyards Gorinchem, and the French Kership) in the bid 2021 re-launch, the deal is estimated to be worth around US$200 million.
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The CSTC offer was reportedly not the most generous offer received. Pre-awarding the contract to CSTC may be part of Uruguay’s broader China strategy as bilateral discussions over a Free Trade Agreement continue in the coming months. (RP)
Argentina 🇦🇷
Una comitiva de la Fuerza Aérea Argentina visita China para evaluar al JF-17 Thunder | May 9, 2022
~Above for the full Spanish article~
An Argentine Air Force delegation is currently in China as evaluations continue on where to source the country’s new set of supersonic fighter jets. As noted in TCS May 7, the Argentine Air Force has been without a supersonic fighter jet fleet since 2015. One candidate is state-owned China National Aero-Technology Import & Export Corporation (“CATIC”), which manufactures the JF-17 fighter jet.
In turn, a CATIC delegation is reportedly expected to pay a new visit to Argentina in the upcoming months. They also visited Argentina for discussions in May 2021. The JF-17 was discussed by Presidents Alberto Fernandez and Xi Jinping at their February meeting, and has been pushed by Argentina’s Ambassador to Beijing Sabino Vaca Narvaja. Recall that Vaca Narvaja has been questioned for being seen as a conduit for Chinese influence after being solicited by the China Communications Construction Company to be awarded a construction contract for the Vía Navegable Troncal (“Hidrovía”) (see TCS May 1). (MH, RP)
Background: China National Aero-Technology Import & Export Corporation (“CATIC”) 🔍
Headquartered in Beijing, CATIC is a Chinese state-owned defense company with a core business in aviation products and technology. It is the exclusive representative of the Aviation Industry Corporation of China (“AVIC”) in the global market.
Originally founded in 1979, CATIC is not publicly traded. Active in over 30 countries worldwide, CATIC has three Representative Offices in Latin America: Bolivia, Ecuador and Venezuela. (RP)
Infrastructure/ESG 🏗
Guyana 🇬🇾
Some three months after the government commenced negotiations with a Chinese joint venture on the construction of the new Demerara Harbour crossing, Public Works Minister Juan Edghill says that the government is finalising those talks.
Edghill’s statements come after the Environmental Assessment Board (EAB) upheld the Environmental Protection Agency’s (EPA) decision that an impact study for the new Demerara Harbour Crossing is not needed.
Instead, it has been recommended that an Environmental and Social Management Plan be crafted. This plan is expected to include the identification of potential impact and mitigation outcomes of the final design and other much-needed analyses and plans.
The new firm the government has been in talks with is a Joint Venture (JV) company between China Railway Construction Corporation (International) Ltd., China Railway Construction (Caribbean a) Co. Ltd, and China Railway Construction Bridge Engineering Bureau Group Co. Ltd (China & Trinidad and Tobago).
After the contract is signed, the government expects to have the modern structure delivered in two years.
Agriculture + Trade 🍒
Chile 🇨🇱
*Note: Global Times.cn is a Chinese state-sponsored media outlet
During the 2021-22 season, 88% of Chile's cherry exports, worth more than US$2 billion, were shipped to China. The world’s largest cherry market, China is the consumer of around one-third of the fruit globally, with Chilean cherries accounting for 95% of its total cherry imports. (RP)