“If you were Argentine, you would be a Peronist,” Argentine President Alberto Fernandez told the Chinese leader on a visit to Beijing a few days ago. I wondered how the interpreter turned with “Peronist” in the translation of the joke. But Xi Jinping will have gotten the message, Fernández sees him as someone on the same team.
Not for nothing. China becomes an unavoidable partner of an Argentina in crisis, I wrote here in 2020. And as the Argentine crisis never ends, Beijing is gaining ground. During the trip, Fernández announced Chinese investments of around US$ 23 billion in the country. In 2021, China became the main source of imports from Argentina, surpassing Brazil.
Fernández was in Beijing with his head also in Washington. He is negotiating with the IMF on the restructuring of Argentine debt, balancing between negotiations with the fund and with China and making use of parallel moves to enhance his negotiating position.
Exercising strategic autonomy for an Argentina in crisis is like walking a tightrope: if it loses its balance, it is left with bankruptcy. Working, there’s a new arrangement with the IMF and more Chinese resources; going wrong, you are left without one or the other. And, in the past, even Chinese investments announced in a presidential visit have not materialized.
Like no other country, China is able to finance infrastructure projects in an Argentina haunted by the risk of default and in search of investment. In addition, at a time of dollar shortages in Buenos Aires, a new currency swap agreement is sewn up with the Chinese. The aim is to increase the use of local currencies for trade and investment — a relief for the country of limited reserves, but also something Beijing, with an interest in the internationalization of the yuan, wants to promote.
However, nothing Fernández had to offer would be as valuable as Argentina’s adherence to the New Silk Road.. The Xi Jinping Eyes project has gained traction in the developing world, but in Latin America it is met with resistance from Brazil, Mexico and Colombia.
By increasing the number of endorsements for the initiative, Beijing is especially looking for something of political value. China sees membership as a sign of international recognition and prestige, a testament to a country capable of shaping global governance. Alberto Fernández’s Argentina did the math and came to the conclusion that it was worth giving Beijing this seal now. Experienced operator, the Peronist also capitalizes with the Chinese in the face of reluctance of other major countries in the region.
But he knows that he also needs the US in the negotiations with the IMF. He promised a respectful relationship with Washington directly from Beijing, after receiving harsh internal criticism over the timing of his trip, with a stopover in Russia as well. Fernández, the tightrope walker, just a few days ago got the green light from the OECD to begin (like Brazil) his process of joining the forum in which the US has great influence.
The Argentine president waves at the same time to China and the IMF, to the USA and to the New Silk Road, to the OECD and to the BRICS (yes, he asked for Chinese support to join the group). With all that, he still has to juggle to manage his own allied base in Buenos Aires.
Calculated but risky, hyper-activism in flirtation aims to maximize the bargaining power of a country lacking many options. Reality, however, imposes itself: China’s influence in Argentina is increasing.
