Argentina hopes to sign this weekend a deal with China to build its fourth nuclear power plant, Juan Pablo Tripodi, head of Argentina’s investment agency, told Reuters—a move that would boost Chinese influence in America’s historically perceived backyard of global influence, Latin America.
The agreement, reportedly worth US$8 billion, would be for the construction of the Atucha III nuclear power plant that would be financed with Chinese money. According to Chinese state funding data reviewed by Reuters, the new nuclear power plant would become one of the largest projects that China has financed in Argentina.
According to the World Nuclear Association, Argentina’s three operating nuclear reactors currently generate about five percent of the country’s electricity.
Apart from attending the G-20 summit in Buenos Aires this week, Chinese President Xi Jinping will also make a state visit after the meeting of the world’s top leaders ends. U.S. President Donald Trump will also attend the G-20 summit and there are plans for a bilateral meeting with Xi to discuss the trade war.
Yet, as Reuters notes, the backdrop of the summit will be the competition between the U.S. and China for influence in Latin America. The region has traditionally been viewed as America’s backyard, but with the growing influence from China, U.S. officials have become increasingly uneasy about the Chinese bolstering economic, trade, and strategic ties with a U.S. ally such as Argentina.
“These are infrastructure projects where China is coming in and providing very low interest loans or they are just having Chinese companies do it,” a senior U.S. Administration official told Reuters. “It’s creating an economic and political dependency on China that’s incredibly dangerous.”
According to a Reuters analysis of data, China has four ways to increase its influence in Argentina—providing cheap financing; investing heavily in infrastructure; a currency swap expected to be extended to the point of making China Argentina’s top non-institutional lender; and boosting trade ties.