(Source: Reuters & The Transport Politic)

China and Argentina have agreed to invest about $10 billion over several years to renovate the Latin American country’s dilapidated railway system and build a subway for its second-largest city. Funds come from the China Development Bank and will require a 15% match from the Argentinian government.

The $10B breaks down as follows:

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.  Argentina’s once-extensive rail network was largely dismantled during the privatisations of the 1990s. But as agricultural output soars, farmers and grain elevators — who send more than 80 percent of grains by costly road transport — have been calling for investment to revive the railways.

Road transport costs about 7 U.S. cents per tonne per kilometre in South America’s No. 3 economy — about twice the cost of rail cargo and four times what it costs to transport grains by boat, according to the grains exchange in the country’s biggest agricultural port, Rosario.

More than four billion dollars for the improvement of the Buenos Aires Subway and the creation of a four-corridor Metro in Cordoba — projects.

China in recent years has been dipping into its deep pockets to fund infrastructure projects in poor and emerging economies that bolster relations and often further Beijing’s own economic goals by helping bring goods and raw materials to market faster.  I’d not be surprised if the Chinese are looking to export their rail technology to not just the developing parts of the world but also to advanced economies such as the USA.  The world better learn fast how to say Ni Hao!

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