China To Finance Development & Logistics Of Argentina’s Beagle Channel Around South America?

China’s Antarctic and LatAm interests make a match for Argentinian developments

With Argentina having joined China’s Belt & Road Initiative earlier this year, becoming the largest LatAm economy to do so, discussions are apparently taking place concerning the development of the Beagle Channel, an inland strip of water separating Argentina and Chile at the southern tip of South America. It is one of three main routes that allow shipping to navigate around the continent, which is notorious for poor shipping conditions.

At present, the route most often used by commercial vessels needing to round South America is the open ocean, Drake Passage. However, global warming is affecting weather and the tendency for this route to become more perilous over time. The Beagle Channel (named after the ship used by Charles Darwin on his naturist explorations) can handle deep water vessels and crucially, being inland offers protection against extreme Oceanic weather. It runs for 240km and is 3km wide. It can also function as a gateway to Antartica, where China has four research and exploration bases.

Argentina has already developed an integrated naval base and an Antarctic Logistic Pole in Ushuaia, on the Beagle Channel, to be used as an Antarctic logistics base. This involves the building of a pier to dock deep sea vessels, including icebreakers, the building of facilities to house an increase of military personnel stationed in the area, while the existing Ushuaia Naval base and its logistics, plus other facilities such as workshops for the repair of vessels, covered storage spaces, scientific labs for the different government agencies linked to Antarctic activities, a fuel plant and a runways for heavy duty aircraft are all part of this project.

Argentina has been increasingly turning to China to help bail out its appalling economic record, with the US-controlled IMF politicizing loans due to Argentina’s support for the Venezuelan Government, which Washington does not recognize. China’s Antarctic interests and the further development of a South American trade route present an interesting opportunity for China to develop commercial trade in a region Washington has long neglected and interfered with. Argentina has been replacing loans and aid from the IMF with increasing ties to Chinese-led policy banks such as the AIIB.

Chinese involvement in the Beagle Channel would also mean that it would be capable of exerting some control of US commercial shipping both north and south of the South American continent as the Panama Canal is operated with assistance from Chinese logistics firms, an issue that will raise the hackles of Washington’s hawks and policy makers. Panama is also a member of the Belt and Road Initiative. Argentina meanwhile is considered a primary candidate to join an expanded version of BRICS.

Should the Beagle Channel project materialize, it would serve as a transit and support hub to other China funded Latin American ports, such as Cosco’s US$3 billion port at Chancay in Peru.

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• China Eyes BRI Projects In Argentina To Secure Soy & Wheat Imports