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Which isn't saying much, but it's a start...

The Argentinian government recently received a loan of $10 billion from China Development Bank in order to begin the construction of a new metro and railway system. 

This comes as a bit of a surprise, considering China's embargo on imports of soybean oil from Argentina as of late, where antidumping measures have caused quite a dispute between the two. Argentina seems to be tweaking production to meet Chinese standards now, and due to China's interest in Argentinian farmland, both countries remain interested in working with one another. In fact, building the high-speed rail for Argentina means China can easily access the farmland in a "cost-efficient" way, and Argentina is able to obtain the new technology through China's loan.

"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," said Yonah Freemark of the Transport Politic

In addition, China will commit over an additional four billion dollars to the Buenos Aires Subway and the development of a four-corridor Metro in Cordoba. Argentina has agreed to match 15 percent of the loans they receive.

China is certainly in a position to loan countries money around the world, especially for transportation-related projects like railways since China is the number one leader in high-speed railways in the world. The country recently completed the Hongqiao Station, which lies over the Beijing-Shanghai High-Speed Railway line (and now has a solar station as well), and the Wuhan Station, which is over the Wuhan-Guangzhou High-Speed Railway. 

So far, China has invested $259 billion in high-speed rails for their own country, and plans to spend a total of $1 trillion by 2020. This kind if investment leaves America far behind with its own investment of $13 billion. While the United States continues tinkering with carbon solutions like "carbon-credits", China will be on the fast track (literally) to both decreasing carbon emissions and increasing business productivity by cutting travel time through the development of high-speed railways.  

"If U.S. companies aren't able to provide adequate private sector support for construction programs, and if neither the federal government nor states themselves are able to develop infrastructure banks to advance such funding, foreign aid could be a realistic possibility," said Freemark. 

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Its sad
By ZachDontScare on 7/22/2010 3:39:32 PM , Rating: 5
Its sad that now when I come to dailytech, I actually look to the Jason Mick's entries for the more balanced articles.

Train service is not an object good. Whats great for Belgium or Argentina may not be great for the US.

The only real thing I take from this article is, should the US and China ever find themselves at war, we should take out Argentina's trains first, to deprive the chinese of the food they're importing.

RE: Its sad
By bryanbrun on 7/22/10, Rating: -1
RE: Its sad
By Spuke on 7/22/2010 4:27:45 PM , Rating: 3
The US is bankrupting itself with a military it can't afford.
Provide some proof of that please.

The pathetic and outdated transportation infrastructure of the US, which is tied to OIL
What do the Argentinian trains use as an energy source? Thanks.

RE: Its sad
By bryanbrun on 7/22/10, Rating: -1
RE: Its sad
By Solandri on 7/22/2010 6:26:51 PM , Rating: 4
We can afford a military budget of something like 300 billion, which more than any other country in the world.

The U.S. military budget in 2010 is $664 billion, or 4.6% of GDP. The world average is about 2.6% If you factor in that we're currently in two shooting wars (arguments about their justification aside), bound by a peace treaty to provide for Japan's defense, and also maintain a presence in Europe as a member of NATO (arguments about its continued necessity aside), I don't think 4.6% is that outlandish. You could argue for 4% or maybe even 3.5%. But $300 billion is 2.1% which would put us significantly under the world average.

As for deficit reduction, please read some of the Congressional Budget Office publications to see where money is actually being spent, which categories are falling, which are rising, and which are projected to become an albatross around our necks. Military spending is actually one of the few budget items which has consistently been decreasing over the decades. The main contributor to our deficits is increasing cost of social programs. In fact, even if you completely eliminated military spending, by 2025 we'd still be running a deficit because of spending on social programs.

RE: Its sad
By bryanbrun on 7/22/10, Rating: -1
RE: Its sad
By ninjaquick on 7/26/2010 4:01:55 PM , Rating: 1
At 9% annual *growth* how much of that is to compensate for inflation? With what is left, does that really reflect the war very much?
Sure, cut the budget to 400 billion, I mean, our men and women in service don't need to be properly paid or equipped...

RE: Its sad
By TSS on 7/22/2010 6:39:30 PM , Rating: 2
Measuring in % per tax dollar spent is moot. In fiscal 2008 that was 10% and in fiscal 2010 that is <5%, simply because spending increased with a trillion. The debt also increased with 4 trillion in the same period.

Average interest rates declined due to the crisis from 1.6% in 2008 to 0.3% in 2009

At the end of fiscal year 2008, interest on the debt was $451 billion. At the end of fiscal 2009, interest on the debt was $383 billion, due to the above.

National debt at the end of fiscal 2008 was $10 trillion. National debt at the end of fiscal 2009 was $12 trillion.
National debt right now is $13,2 trillion and expected to top $14 trillion at the end of fiscal 2010.

Now, in order to be able to pay off this debt your economy will need to recover. When the economy recovers (long before actually beeing strong enough to pay off debt), Inflation takes hold because of the low interest rates. In order to prevent a Zimbabwe, Interest rates will need to rise, and as shown above, the national debt will rise substatially as well.

So ya get to choose. Have your children default on the debt or suffer hyper inflation. And for those of you saying that won't happen, it'd better, or else your children's children will be the chinese's personal slaves at this rate. Or y'all could, i dunno, vote somebody sensible into power?

RE: Its sad
By Nfarce on 7/22/2010 8:03:39 PM , Rating: 5
Or y'all could, i dunno, vote somebody sensible into power?

That's not going to happen. Both major parties have failed America (Republican, Democrat).

We have "lifers" in Congress who love their own power over the best interest of the nation and suck up to special interests.

We have ignorant masses who are easily duped into smooth talkers (and teleprompter readers) without even checking into facts and especially the voting history of said politician (especially if a Congressperson is running for President).

Finally, we have a media that is wh0red out to special interests and biased unabashed for their candidate and will not call out said candidate on BS, flat out lies, and hypocrisies - even when said candidate becomes an elected official.

So in short, the "sensible" politicians are few and far between these days. And America is paying dearly for it with each successive election.

RE: Its sad
By MatthiasF on 7/22/10, Rating: 0
RE: Its sad
By Nfarce on 7/23/2010 12:11:14 AM , Rating: 2
Get a clue. Nearly half the households in the US pay ZERO federal income taxes.

Next up in the fact department, just 20% of US households (those evil rich) pay over 85% of all federal income taxes.

"The top fifth of households made 56% of pre-tax income in 2006 but paid 86% of all individual income tax revenue collected, according to the most recent data available from the Congressional Budget Office. Narrowing in further: The top 1% of households, which made 19% of pre-tax income, paid 39% of all individual income taxes."

Only a clueless moron (or an Obamabot) would think pushing the tax burden HIGHER on those who pay the most in income taxes would free up public debt. Try cutting WASTE and FRAUD in the federal government first, geniuses.

And finally, over 1/3 of those US households in upper tier income brackets are business owners who employ people. But go ahead you economic gurus - raise taxes on those who pay them, see what happens, and then blame the party who's essentially been out of power since the Pelosicrats who took the Congressional gavel from Republicans in January 2007.

RE: Its sad
By bigdawg1988 on 7/23/2010 3:24:48 PM , Rating: 2
Next up in the fact department, just 20% of US households (those evil rich) pay over 85% of all federal income taxes.

But those 20% also have at least 85% of assets in this country. That seems about fair, especially when certain investments (capital gains) are taxed lower than wages. That is partially why the tax rate for some incomes (more like the top 10%) could be higher. Income and wealth aren't necessarily the same thing. You can have wealth without income.
And cutting the federal deficit is like making people lose weight. They know it, but getting them to do it is nigh impossible. For every good idea to cut waste, there is someone congressman that will have a reason it hurts his constituency. Part of the reason the military gets stuck spending money on some spare parts they don't want.

RE: Its sad
By Nfarce on 7/23/2010 10:23:24 PM , Rating: 2
But those 20% also have at least 85% of assets in this country. That seems about fair

I guess it is "fair" with a progressive income tax.

You can have wealth without income.

Yep. But most people who have wealth without income don't last long. Live off $100,000 and see how long you can survive without another source of income. Income being a steady paycheck that is. Most people who are not working have income on their wealth, which is still taxed as you say.

Chances are they have been taxed all their lives to earn that wealth. So, why punish them even more. And people (especially politicians) wonder why overseas retirement options in places like the Dominican Republic are becoming more and more attractive to retiring baby boomers.

RE: Its sad
By xmichaelx on 7/23/10, Rating: 0
RE: Its sad
By Nfarce on 7/23/2010 10:30:11 PM , Rating: 2
Maybe we could just incorporate the same tax structure Reagan supported, which is substantially more than what we're paying now.

The Reagan tax hikes under the Tax Equity and Fiscal Responsibility Act of 1982 was only because Congress agreed to reduce spending by $3 for every $1 increase in tax revenue increase.

Now, what about the Obama administration and reducing spending and tax hikes coming next January? Uh huh.

But in any event, as I stated, over 1/3 of the "evil rich" are business owners. Go ahead and raise their taxes, throw on a VAT, pass Cap & Trade, and see what happens.

RE: Its sad
By Shining Arcanine on 7/23/2010 12:27:45 PM , Rating: 1
Why is it that you consider what the US can afford in terms of military spending to be a function of what is left in the budget after everything else has been funded?

The answer is that your priorities are backwards. Defense needs to be first in the budget and everything else must come afterward. Congress needs to discontinue all of its social programs. Social Security is one of the first that need to go. The proper way to discontinue it is to stop accepting new people into the program. That way when the people in the program are dead, the program is discontinued. The same should be done with Medicare, Medicaid, the recent "health care" bill, etcetera. Several government agencies like the department of agriculture also need to go. Then after all of these things are gone and the debt is paid, taxes can be reduced.

The federal government was never meant to do these things and the fact that it is outside of its bounds is the cause of the US national debt. Fixing the cause of things is the proper way to deal with them. The short sighted approach of cutting the most vital spending that is being done at the moment because we want frivolous stuff.

I know that some profound individual will say that the need for such things as a military should not exist. I also know that such an individual in today's world is also unable to plan over periods of time greater than a decade, assuming that he can make significant plans for periods greater than a year. One day, the causes of wars between humans will end. When that day comes, military spending as we know it will end. That day will not come until things like Islam, Marxism, domestic issues, etcetera die, all of which ultimately contribute to the need for war. While the death of Marxism will likely occur within 200 years, the death of Islam is still very far away. Domestic issues (i.e. the mistreatment of others based on irrational thoughts such as personal gain or simply differences in age and ethnicity) have no end in sight. There are no short cuts to an ideal world. Therefore, until all of these things end, military spending is something that must be done. Anything else is ostensible.

RE: Its sad
By ninjaquick on 7/26/2010 4:14:47 PM , Rating: 1
The national deficit is calculated with projected expenses from all sectors of federal public service, including realistic projections of worst case Social expenses.
The deficit is more than anything the failure of economists to properly predict operating expenses and represents the amount over budget year per year. Normally when there is a deficit the correct thing to do is find what is going over budget and capping the intake, restructuring or terminating it.
The military is quite good about staying within budget. The problem is many public servants are paid extremely high wages, social services are more expensive than predicted, etc.
Don't confuse Debt with Deficit, it makes you sound stupid.

RE: Its sad
By microAmp on 7/22/2010 5:18:05 PM , Rating: 3
The US is bankrupting itself with a military it can't afford.

Add welfare to that too if you're going to complain.

RE: Its sad
By johnr81 on 7/22/2010 7:12:18 PM , Rating: 2
Can we throw in Medicare, Medicaid and Social Security as well? Granted Social Security wouldn't be an issue in the future had the government not spent the huge SS budget surplus to offset other budget shortcomings in the present and past.

That's just to name the big ones.

RE: Its sad
By Reclaimer77 on 7/22/2010 8:10:36 PM , Rating: 2
The US is bankrupting itself with a military it can't afford.

I get so tired of hearing this lie repeated. Stimulus, Health Care, runaway spending on social programs...and you think our military spending is the problem?? Oh and they just voted today to increase unemployment benefits, AGAIN, with money we don't have. I guess that's military spending too?

You idiots talk like we're the USSR or something at the height of their military buildup. Get a clue, the actual budgetary numbers are very easy to find. Our problem has NOTHING to do with military spending.

RE: Its sad
By JKflipflop98 on 7/22/2010 9:36:19 PM , Rating: 1
Military spending is a problem. Just because it's not as big of a mess as giving hundreds of billions to insurance companies doesn't mean it's not an issue.

We wouldn't need to spend over half a trillion per year if we weren't so busy goosestepping up in other countries' business all the time.

RE: Its sad
By Shining Arcanine on 7/23/2010 12:30:47 PM , Rating: 2
Military spending is not perfect, but it is one of the smallest issues in the US budget. Its weight in terms of actual spending is relatively small compared to other items (e.g. bailout bill) and the amount of waste is minimal (<20% while the bailout bill is >90%). It is the last place that needs attention, not the first.

RE: Its sad
By ninjaquick on 7/26/2010 4:25:02 PM , Rating: 2
How to get out of debt:
Sell stuff you don't need -> Privatize
Decrease Spending -> no new federal expenses
Constitutionally there is one sector that cannot be fully privatized and that is the Mil, everything beyond the Treasury proper, Legislative, Judicial and Executive branches should be privatized.
I'm pretty sure we can handle 1.2 is trillion a year if we privatize everything we can.
People in the business of making money are competitive and competition lowers prices.

Or am I wrong?

RE: Its sad
By kattanna on 7/23/2010 10:33:16 AM , Rating: 2
Its sad that now when I come to dailytech, I actually look to the Jason Mick's entries for the more balanced articles

true, which is a primary reason why i barely come here anymore.

Argentina to have better rail than US?
By Smartless on 7/22/2010 2:45:27 PM , Rating: 2
Wow that made me do a double-take. But I guess the ironic part was China telling Argentina to meet its standards.

RE: Argentina to have better rail than US?
By quiksilvr on 7/22/2010 2:52:58 PM , Rating: 5
Why do people get surprised that countries magnitudes smaller both in population and surface area of the US have a better system than us? We have a crapload of people in this country and its one of the most spread out populations in the world.

By HotFoot on 7/22/2010 2:59:55 PM , Rating: 2
There are regions that are marginal in terms of population density to make sense for high-speed rail. It just seems to me, though, that the investment is already there in terms of air travel and personal vehicles. Many countries where there are great rail travel, people spend a lot less on personal vehicles - so perhaps they accept more money going to trains. Whereas in N.A. we're very much more individualistic, and few of us would want to have our money put towards trains, to the point of affording only economy-class vehicles.

RE: Argentina to have better rail than US?
By TheDoc9 on 7/22/2010 3:09:13 PM , Rating: 2
Exactly, while I agree with the tone of the article there's certainly no pressing reason to upgrade, at least not for passenger use.

If they removed the rail union and built a new high speed system for cargo it might be different. Of course this would never happen, truckers unions wouldn't have it. And no senator could accept the job losses.

It would be up to private companies to build it and undercut everyone... Of course then the guvment would just take over.

By Lonyo on 7/22/2010 3:57:08 PM , Rating: 2
well considering over 40% of the money is being used for freight lines, I would guess that would be an area the US might take interest in.

By Shining Arcanine on 7/23/2010 12:41:41 PM , Rating: 2
I looked it up:

Most freight trains can operate at speeds of 60mph. They go from point to point, so they likely can arrive sooner to the railway station than a truck can. How is the speed of trains an issue? Throughput is what matters, so I fail to see how a higher speed network would change things.

RE: Argentina to have better rail than US?
By MrTeal on 7/22/2010 3:58:01 PM , Rating: 2
Argentina has half the population density than the US does.

By Solandri on 7/22/2010 6:07:54 PM , Rating: 2
Argentina's population is more concentrated in cities than the U.S. Half the population density + more urbanized = a heckuva lot easier to link up with fewer public transportation routes.

By Rookierookie on 7/22/2010 7:11:49 PM , Rating: 1
The US is the transportation cesspool of the world.

China is a joke!!
By bobny1 on 7/22/2010 7:22:12 PM , Rating: 2
How can China force Argentina to go by their standarts when every peace of junk that comes out of china is classified as a hazardows material in the rest of the world. Talk about a country where breathing clean air is a commodity. Pathetic!!

RE: China is a joke!!
By Orac4prez on 7/22/2010 11:25:17 PM , Rating: 2
The toxic bonds, sub-prime mortgages and state bonds coming from the US are little more than hazardous junk. The standards for oil drilling are obviously junk. In China, they have "dispatched corrupt politicians and company officials. You have no problem killing off many other criminals - why not get rid of the Madoff's , Enron execs, too-big-to-failed Bank CEO's, and the BP operations manager. Seems like if you are rich CEO, you can get away with destroying the economy. No one holds them to account! Can't I've ever been to LA and enjoyed breathing the air. Still, the USA trails Japan for government debt, but with good old Yankee know how I'm sure it would be possible to overtake them!

RE: China is a joke!!
By Penti on 7/23/2010 11:38:03 AM , Rating: 2
US jails more people then China and India combined, actually 25% of the world prison population is in the states.

Lets face it US is a failed system. At so many levels.

China makes all the top goods the west have, or it's neighbors. Companies like Dell, Apple, Cisco, HP etc wouldn't exist without Taiwanese investment in China. We wouldn't have enough semiconductor-capacity without Taiwan, Korea, Singapore and Japan and partly China. We wouldn't have anywhere to assemble all our stuff without China. US and partly Europe was to slow to move and adopt new technology which is why southeast asia got it's foothold. We cannot manufacture TFT/LCD screens outside Korea, Taiwan and Japan. China is still a country with less pollution and coal then the west, however your fine as long as you don't live near a old coal plant or a smogged up city. Remember 50 years ago, when it rained ash near plants in the west... They just have the same problems we all where having. As for forbidden and toxic stuff, you get what you pay for, buy from respected firms and don't do shortcuts and your fine, India, Bangladesh etc is worse in that regard, most industries in the west was even more toxic. China is very aware of local environmental problems. And any respected firm do comply with US and EU standards.

This is not inconsistent with their embargo
By NA1NSXR on 7/22/2010 4:10:06 PM , Rating: 2
This money is used to buy influence. The project its used for is almost irrelevant. You can insert any other infrastructure project and it would mean the same thing to me.

By theArchMichael on 7/22/2010 5:55:26 PM , Rating: 2
China does a lot of these types of projects like this in emerging economies and underdeveloped nations.
I think one reason is because the money goes a lllloonnnngggg way in those countries. You can build a huge library for a few hundred thousand dollars whereas you can't get a two bedroom condo in a good part of town for that here.
But also, it helps them put their foot in the door and expand their influence in the region. So when it comes time to mine X metal or order Y durable goods. China and it's companies will have the upperhand. Or in the case of the tax levy you referenced.

All that to say that this seems like to MO for China. I used to live in the Caribbean and they do lots of stuff there and central america.

By chmilz on 7/22/2010 2:36:56 PM , Rating: 3

China, a leader?
By eddieroolz on 7/23/2010 3:05:33 AM , Rating: 3
I was fine with the article, but when I saw this:

China is a leader in high-speed rail

I just stopped reading at that point.

I can't believe anyone would claim that China, a newcomer to high-speed rail, is a leader. Japan has 50 years of experience running the show, and the TGV is right behind the Shinkansen. If anything Japan and France has much, much more experience than China ever will.

Let's not even go into the reverse-engineered Western trains that China is now selling abroad.

By mkrech on 7/22/2010 3:30:38 PM , Rating: 2
...including $1.85 billion to improve conditions on the Belgrano Line, which links the country to Bolivia...

I think Bolivia has something that may interest China and I don't think it's 'marching powder'... unless your thinking of a little pink rabbit with a drum.

I live in Argentina
By Nacho on 7/22/2010 7:06:24 PM , Rating: 2
And I can that because of our corrupt politicians, this government's populist views and our powerful trucker's union, exactly $0 will go to the railway system.

Paying for resources
By Shig on 7/22/2010 8:33:06 PM , Rating: 2
The rail lines are being built so Argentina can mine and export faster, and get workers | economic development out there they can mine faster.

Anyone also hear that China wants to build a HSR line all the way from Beijing to Europe?

Western Hemisphere vs. Eastern Hemisphere, oh it's on! (Crap the west is so going to lose)

By CityZen on 7/23/2010 1:56:21 AM , Rating: 2
I live in Buenos Aires and I actually use the metro system that will hopefully be expanded and improved thanks to Chinese generosity :)
The way that I see it, this is about two issues:
80% of this move is China wanting to improve production and shipments of the food that Argentina produces and China needs. For example, Argentina is the third largest soybean producer in the world and China buys over half of that production. Plus China is securing access to it ("Hey, I lent you a few billions ... I do have priority on your food production, right?"), probably in favorable terms.
20% of this move is China wanting to expand its political influence in different parts of the world (in this case, Argentina)

I live in Cordoba, Argentina
By marraco on 7/23/2010 8:51:43 PM , Rating: 2
I live here, and is clear that we have a BIG problem:

We cannot pay back the loan.

Also, the subway in Cordoba have no study of factibility or conveniency. It's just made because the loan is offered, but why we should pay for sometingh that maybe don't need, at that price?

A loan is not a gift. Is only another (more expensive) way to pay for it.

We already declared default on our debt. We did not pay back, so why the Chinese think that we can pay for those rails?

Maybe we are in deep need of interstate load trains, but those NEVER are high speed trains.

High speed trains are non cost-convenient. They are too expensive for ton of load. They are for passengers, and is not even cost-effective for passengers.

And dont forget
By Dodgy on 8/6/2010 3:10:10 AM , Rating: 2
Besides the expansion of influence, access to goods.. this can also become a flag train (?) for the Chinese rail system, useful in sales/Demo to other countries. Its exactly what western country's do all the time, sell advanced arms to country's, then loan them the money to buy those arms, then include the Arms loan money as "overseas Aid".. LOL. Plus whose to say a few Argy politicos arent getting a Brace of IPAD's, Free Trips or just Plain old Cash?

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