China spents billions on intercontinental HSR

China Development Bank recently agreed to loan the Argentinian government $10 billion for new railway and metro construction.

China has become a major source of funds for countries around the world, acting essentially as an alternative or competitor to the World Bank. It has been increasing its spending in Africa (much more than other countries). And it is looking to fund much of an intercontinental high-speed rail network it and others are planning, “the largest infrastructure project in history.”

China seems to have a direct interest in Argentinian farmland, a good reason for it to help improve transportation to and from this farmland in a very cost-efficient way (through better rail lines).

“Thanks to talks between Presidents Cristina Fernández de Kirchner and Hu Jintao, Argentina will receive $4.35 billion to renovate three freight railroad lines, including $1.85 billion to improve conditions on the Belgrano Line, which links the country to Bolivia and is an important link for the nation’s agricultural producers,” Yonah Freemark of the TransportPolitic writes.

But $4 billion for improvement of the Buenos Aires Subway and creation of a 4-corridor Metro in Cordoba don’t seem to offer any direct economic benefit to China. Yonah conjectures that Argentina must have agreed to give China some preferential trade treatment for this.

The Argentinian government has also committed to give a 15% match to the loans they receive.

Photo courtesy of http://cleantechnica.com.