Leader Xi Jinping’s invitation for Argentina to be present at the BRICS meeting that China is organizing next month – still in a virtual way, because of the restrictions imposed by the Covid pandemic – reinforced a recent rapprochement between the neighboring country and the giant. Asian.
Previous steps included a visit by President Alberto Fernández to Beijing in February. At the meeting to celebrate 50 years of diplomatic relations between the countries, several agreements were signed, such as the entry of Buenos Aires into the so-called “new Silk Road”, a Chinese project of global connectivity called Belt and Road (Belt and Road initiative). .
The signed memorandum made Argentina the 21st country in Latin America and the Caribbean, but the first major economy in the region to make up the group — Brazil and Mexico, for example, are still outside. Among the investments that China has committed to make under the agreement are waterways, a new nuclear power plant and a project linked to lithium exploration in the north of the country.
Even with these recent advances, analysts view the move with caution. “The alliance between China and Argentina is strategic and important, but since February there have been no major disbursements in terms of investment”, he tells Sheet Sergio Cesarín, coordinator of the Center for Studies on Asia-Pacific and India at the National University of Três de Fevereiro.
He also highlights the weight that the worsening of disagreements between the president and his vice, Cristina Kirchner, can have in the Argentine diplomatic scenario.
“Foreign policy has been erratic, but Fernández is more pro-Europe and the US, while Cristina is more pro-China and Russia. In February, the differences weren’t that big, but today the two are more distant and that can reflected in this strategic context”, says Patricio Giusto, director of the Sino-Argentine Observatory and the consultancy Diagnóstico Político.
“The rapprochement with China and Russia and the desire to be part of the BRICS have always been a whim of Cristina’s — so much so that agreements with Beijing were interrupted under Mauricio Macri, who pointed to a very clear alignment with the US.” (Brazil recently said it saw no space for a debate on Buenos Aires joining the BRICS, a demand reinforced by Fernández in Asia.)
According to the analyst, Chinese are considering investing in Argentina at a time when few actors are doing the same. “For them, Buenos Aires joining the Belt and Road is very symbolic in the trade dispute with the US.”
Another sign leading China to be cautious is a recent controversy with a strong regional ally. On his trip in February, before the Ukrainian War, Fernández met Vladimir Putin in Moscow and said he wanted Argentina to be “Russia’s gateway to Latin America.” Later, the politician condemned Russian action in the conflict, aligning himself with the European Union and the US, which made Putin refer to Fernández as a hypocrite and a traitor, according to the local news agency Sputnik – the dispute generates some suspense about how the two will meet at the BRICS meeting.
Meanwhile, the Argentine president’s assertion, upon returning from Beijing, that joining the Belt and Road would mean investments in the country of US$ 23 billion for the time being, has not materialized.
“Argentina is in debt, has debts that go beyond the existing with the IMF, and it would be unlikely that China would accept to lend more money in a context in which the country restructures its commitments and is unable to meet deadlines”, says Cesarín. For the logistic-scientific hub of Ushuaia alone, a loan of US$ 9 billion was foreseen, almost a quarter of the debt with the International Monetary Fund that Argentina has just restructured, throwing payments to a possible future government — there are presidential elections in 2023.
Regardless, there is voluntarism. A sign of this is the fact that China today takes turns with Brazil as Argentina’s main trading partner —depending on the time of year, Beijing takes the traditional first place in Brazil. “The trend is irreversible, China will be the biggest importer of products from Argentina, mainly food”, says Giusto.
In 2021, Beijing purchased US$6.3 billion in Argentine goods (8% of total exports), mainly soybeans and derivatives and beef, according to Indec. “It’s a shame that the Chinese vision for imports is restricted to food. Chile is ahead in that sense for more refined products — and even in the case of wines, due to a free trade agreement that leaves us behind.”
Argentina, meanwhile, buys about 5,000 types of Chinese goods, including automobiles, clothing and electronics. In 2021, this trade moved US$ 13.5 billion or 21% of the country’s total imports. Exchanges between the two countries increased fivefold between 2003 and 2020.
For analyst Eduardo Oviedo, from Conicet, China’s interest collides with the economic issue. “Argentina’s financial situation does not encourage new investments: it is a country whose external debt reaches more than 80% of GDP and which has annual inflation of 58%. Chinese, like other investors, act with caution”, he says. “For now, this approximation is more symbolic for Beijing than it becomes investments per se, because there is no certainty of return.
The movement began in 2014, when Cristina Kirchner, then president, and Xi Jinping signed a joint declaration for the establishment of the Comprehensive Strategic Association between the two countries. Since then, there have been large investments from China, such as a loan of almost US$ 5 billion to finance hydroelectric plants in Santa Cruz province (the Kirchner’s electoral stronghold) and the renovation of the Belgrano Cargas railway company.
For the Argentine ambassador to China, Sabino Vaca Narvaja, a product recently approved by the Ministry of Agriculture can serve to vitalize the relationship: the HB4 type soy, developed in the country and more tolerant to drought – the biotechnological cultivation carried out in Argentina has a free pass in China.
“We are working on several fronts, the first being dialogue to coordinate strategic investments in the medium term, such as the construction of our fourth nuclear power plant. Other important projects are gas pipelines, a set of dams, lithium exploration in Jujuy and railways” , says the diplomat.
There are also geopolitical commitments, with Buenos Aires supporting the idea of a “single China” — without recognizing Taiwan’s independence — and Beijing recognizing the struggle of Latin Americans for the required sovereignty of the Falkland Islands, now part of the United Kingdom.
