MercoPress. South Atlantic News Agency

Argentina plays the Chinese card.

Argentine Foreign Affairs Secretary Rafael Bielsa confirmed this Sunday significant Chinese investments in energy, railways and infrastructure, as well as South Korean financial support, the first credit since Argentina defaulted at the end of 2001.

In an interview with a Buenos Aires radio Mr. Bielsa said that since President Kirchner's visit last June to China with a delegation of 200 businessmen, Beijing and Buenos Aires have been working "in several bilateral agreements related to energy, railways and basic integration infrastructure".

"As to South Korea it's a financial investment with the purpose of generating new credit lines for the production sector, which signals the end of our credit isolation since defaulting".

Mr. Bielsa thus confirmed the insistent rumours last week in Buenos Aires which anticipated a "mega-announcement" when Chinese president Hu Jintao officially visits Argentina next November 16.

However Mr. Bielsa said that he was not allowed to talk about the package, which apparently involves 20 billion US dollars, since "its contents and timing are under exclusive management of President Kirchner".

According to the Argentine press, 20 billion US dollars is a sum just short of the country's annual budget and represent twenty times what the Kirchner administration was planning in capital investment.

Regarding railways the idea is to recover the extensive network that was eliminated during the time of former president Carlos Menem and establish a "bullet train", between Buenos Aires and Rosario.

Apparently the thirty years agreement involves paying back to China with Argentine commodities (cereals, minerals and hydrocarbons) with "no strings tied" to the package.

The operation will be done through a Portuguese bank, Banco Espiritu Santo, which operates in 17 countries and is involved in similar projects in Brazil.

The thinking behind the Chinese long term strategy speculates the Argentine press, is that China has international reserves totaling 420 billion US dollars and is most interested in ensuring commodities supplies for the future. Similar agreements have been signed with African countries and in South America with Brazil and Chile.

The Chinese economy will be second only to United States by 2010.