China's Chery announces $400 million electric auto plant in Argentina

[peppertree]

Chinese automaker Chery announced that it will invest US$400 million in Argentina to establish a production plant for 100,000 electric vehicles (EV) annually.

The plant is slated to generate 6,000 direct jobs, and comes on the heels of plans by steel and nickel giant Tsingshan to increase lithium carbonate output in its NW Argentina site to 50,000 tons annually.

The announcement was made after the meeting held yesterday in the city of Wuhu between the vice president of Chery International, Zhang Shenghan; Argentina's Secretary of Industry, José de Mendiguren; and the Argentine Ambassador to China, Sabino Vaca Narvaja.

The company's objective by the end of 2030 is to manufacture 100,000 vehicles per year in Argentina - a sizable addition to the country's current auto output of around 550,000 units annually.

Founded in 1997, Chery is currently the ninth largest auto manufacturer in China - with around a million units annually. It already operates a plant in Brazil since 2014 - though Argentina's would be its first in the region for EVs.

At: https://infonews-com.translate.goog/autos-electricos-un-fabricante-chino-invierte-us-400-millones-en-argentina.html?_x_tr_sl=auto&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp

Argentina's Secretary of Industry, José de Mendiguren (middle, in screen), joins a teleconference with officials from Chinese automaker Chery and the Argentine Embassy, for Chery's announcement Thursday of an Argentine plant for 100,000 EVs annually.

Chery plans to make Argentina the regional base for new energy cars, given the lithium reserves available in the country's mountainous northwest.

[Irish_Dem]

1. China has been sinking huge amounts of money into Africa and South America for a reason.

[peppertree]

2. There's the 'soft power' angle, yes - but also the fact that US & European firms tend to ignore them

Africa and South America have 1.9 billion people between them (430 million in S. America; 1.46 billion in Africa) - but they're often seen by U.S. and European firms (especially our CEOs) as "too remote, too restive, and too poor" to be worth their while.

This, of course, leaves a vacuum for Chinese investors - who tend to have a more long-term view of things.

It's another example of our CEOcracy basically making foreign policy - and leaving the U.S. at a disadvantage as a result.

In Argentina's case, the EV and lithium sectors are a good fit - since the country has the world's 2nd-largest lithium reserves (though, so far, only its 4th-largest output); and a fairly large (90,000), well-trained supply of auto/auto parts workers.

A very undervalued peso, moreover, makes Argentine labor costs comparable to China's - yet affords them a decent, lower-middle class living standard, which makes for good PR as well.

[Irish_Dem]

3. Russia and China are carving up the world behind the scenes.

[peppertree]

4. Whatever influence Russia had, they frittered away

Even before the invasion, the Russians could never compete with China (government or firms) as far as investments, credits, and infrastructure grants - critically important to third-world countries that have been basically left out of global credit markets.

They were a minor player in development finance - and now, aren't even in the game anymore (and won't be for many years, thanks to Putin).

[Irish_Dem]

5. Time will tell how this all plays out.

[peppertree]

6. Absolutely.

In the meantime, it's good to see Argentina get meaningful, productive investment that can both create good jobs - as well as help balance their external accounts (hard currency out, often outweighing hard currency in).

A very positive change from the days when Trump's pal Macri was in the saddle (2015-19).

He only believed in short-term, speculative investment - nicknamed "swallows capital" in Argentina, due to their habit of leaving just three or four months after arriving.

The result, as you can imagine, was a Bush-style debt bubble - and subsequent crash. The country's still trying to wade out from under it - hence its need for investments that can generate export dollars (like this one).

[Irish_Dem]

7. As long as Argentina understands there are strings attached.

Big strings.

[peppertree]

8. Possibly - but nothing NEARLY as stringy as the loan Trump forced the IMF to give Argentina in 2018

That April, Macri's 2016-18 debt bubble burst.

Collapse would've surely followed (as it did in Lebanon and Sri Lanka) - but miraculously, the IMF granted Macri's shameless request for a record, $57 billion bailout.

The IMF board, of course, objected - but they were summarily overruled.

The supervisor of the bailout, Italy's Roberto Cardarelli, was unequivocal: It was granted on Trump's orders, and for the sole purpose of getting his pal Macri re-elected in 2019.

When Macri was soundly defeated in the first round in August, the bailout was immediately cut off. That was "the string."

But by then $45 billion had been lent - leaving Argentina a massive, new debt the current president (the beleaguered Alberto Fernández) referred to as "the largest campaign contribution in world history."

So it was (like so many things Trump) both illegal and pointless. Argentina's still struggling to pay it off - hence their need for Chinese aid.

[Irish_Dem]

9. It's all the same point I am making

You know who Trump works for.

Connect the dots.

[peppertree]

10. You're saying Trump deliberately pushed Argentina into a corner, so they'd have to rely on China?

I hadn't looked at it that way - although that was certainly the net effect, yes.

[Irish_Dem]

11. I am going to shed a bit more light, my friend.

You are obviously an intelligent, well informed person.

I am talking about geopolitics, the world autocracies beginning to seriously flex their muscles.
(Rachel Maddow is finally addressing this. Long overdue.)

China has been in Africa and SA for decades, not out of the goodness of their hearts.
It is about harvesting the world's resources so they can have power over the rest of the world.
Just like Putin has done with oil. If they have enough resources and money spread around the world,
they call the shots.)

It is also about gaining allies.

China and Russia hope to be 21st century superpowers. They are strong allies.
Russia takes Ukraine, China takes Taiwan.
Because to be a superpower you must have regional control first.

Putin has greatly weakened the western democracies by installing puppets everywhere.
Including one Donald J. Trump who did quite a bit of work for him while in office.
Trump was also fond of North Korea, which is basically a Chinese colony.
And Trump had undisclosed financial deals going with China.

It is 100% certain that Trump never worked for the US, or the American people.
He worked for himself and his minders.

When you are trying to figure out what is really happening in life, connect dots.
Ask "who benefits."

[peppertree]

12. Thanks for the compliment!

Same goes for you, and then some.

But do try to see it from where the Argentines are standing:

They're in desperate need of the kind of investment that might mitigate current account deficits - investment that helps reduce the need for big-ticket imports, and if possible add to exports too.

That - and their debt interest payments - means dollars they have to come up with, and have a hard time doing so (all the more so, with heady local demand for dollars by the country's panicky middle and upper classes).

And nothing even comes close to Chinese investment in terms of helping with those needs - especially their currency swaps.

Not that Argentina can give China much in return: It's got no clout; it's one of the least militarized countries around (defense budget at 0.3% of GDP - and 80% of that is wages and benefits, so almost no arms industry); and while not "backward" it certainly has nothing the Chinese don't already have many times over.

There is the matter of the Deep Space station China opened in SW Argentina in 2018 - which, though small, could be used for surveillance. I played a key role in China Moon rover landing that year.

But that might've never opened - had it not been for the vulture fund fraud against Argentine bonds in 2012-16, which cut the country off from global credit markets.

Obama should've never allowed the fraud - but he was hoodwinked into thinking "Macri would be a better bet - and the vulture lawsuit would be a good way to bring about regime change."

And while his predecessor did approve it (for the reasons mentioned), Macri let the Chinese inaugurate that base!

What a wicked web we weave...

[Irish_Dem]

13. Trust me. There is something China wants from Argentina.

We may not know what it is yet.

The Chinese believe strongly in reciprocity in their transactions.

Repayment in some form is expected.

The space station is something very interesting to keep in mind.

Also Chinais most interested in South America's “lithium triangle,” the region consisting of parts of Argentina, Bolivia, and Chile. These countries account for 56% of the world's lithium resources.

China hopes to corner the market on rare earth minerals. It is a way to control other countries.
Much like Putin is doing with oil right now. Or trying to do.

[peppertree]

14. You're right: they're cornering (or at least, getting a leg up) on their lithium supply

But there again: they wouldn't be able to, if it weren't that U.S. firms show so little initiative (French and Australian firms are already big players in Arg. lithium, besides the Chinese).

It seems that all our bloated-tick CEOs care about anymore, are stock buybacks.

And buying politicians. Always that.

Doesn't leave too much for productive investments though.

[Irish_Dem]

15. Either short sighted or by design.

Who knows.

Trump and some American oligarchs have ties to autocratic regimes.

Yes we have a corrupt system of government.

[peppertree]

16. Yeah - money talks. And often to the exclusion of other considerations.

Thanks again for all the good banter, and insights.

Definitely a big part of what makes this site such a great place.

Have a great weekend, and All the Best.

[Irish_Dem]

17. Delighted to interact with you!

Yes money, greed, power seems to be a big driving force these days across the globe.

Have a great weekend!