Sunday, June 23, 2024

ARGENTINA | 14-11-2022 14:37

Fernández seeking more than words at bilateral with Xi Jingping

During his upcoming bilateral meeting with the Chinese premier, Argentina’s president will seek better conditions in the use of currency swaps and be accompanied by Sergio Massa, who wants the relationship to stop being so unequal.

Alberto Fernández will meet for the second time with his Chinese counterpart, Xi Jinping, in Indonesia this week, a meeting in which Argentina’s government is set to argue that theirs is “an unequal relationship" which benefits China the most.  

The first time the two leaders met was in February in Beijing, during the Winter Olympic Games. Then, Argentina signed its adherence to China’s Silk Road and an investment plan involving infrastructure was agreed. There were various promises from Xi Jinping, but little progress was made. Now Argentina is seeking to find a way to revert the inequality in trades link.

Regarding the [currency] swaps, we managed to renew them in February. The extension of their use will be the main topic of the meeting. [Central Bank Governor] Miguel Pesce made progress but has not yet been able to close the deal," Argentina’s delegation in Indonesia announced to journalists. "Argentina's Central Bank is working together with the People's Bank of China on the technical aspects, in order to finalise the extension of the currency swap with Argentina, with the aim of agreeing to extend the use of up to US$5 billion and improve its terms and conditions."

On improving conditions for the use of currency swaps, another official explained that "today they are of no use for foreign trade." Some members of the team want to take a tough stance at the bilateral meeting, although this is not Alberto Fernández's normal way of doing things. 

There are those in the delegation who go even further: "The last 10 years the trade deficit is the same as the entire foreign debt." Economy Minister Sergio Massa recently spoke to Fernández about the need to change ties and that this should be raised at the meeting they will have on Tuesday, something that the head of state endorsed. 

The meeting on Tuesday, scheduled for 5.30pm, will last approximately 30 minutes. In addition to Alberto Fernández and Sergio Massa, Foreign Minister Santiago Cafiero, Argentina’s Ambassador to China, Sabino Vaca Narvaja, and the Secretary of the Chief-of-Staff Juan Manuel Olmos, are all expected to take part. 

In the government's view, the brotherly relationship that Xi Jinping's government is touting must be demonstrated in practice ("There are no words of love if there are no deeds."). And they go directly to the numbers ("They should pay what they owe … China has 52 mining and hydrocarbon projects in Argentina. We can't go on like this.”)

In order to begin to solve one of the biggest problems, the trade deficit of recent years, a long-term solution is also being considered. "In order for it to be balanced, if they really have that brotherly relationship, what they have to do is subscribe to sovereign Argentine bonds issued in yuan to finance the balance of trade deficit we have. Either they extend the swap to trade or they buy a bond," is how one member of the delegation simplifies it. This year the projected trade deficit is US$8 billion, and US$45 billion over 10 years.

Alberto Fernández will meet with Xi Jinping after attending an event organised by US President Joe Biden. The Chinese leader will also have his first face-to-face meeting with the American leader at the summit. Xi arrives at the G20 summit strengthened by the fact, at its 20th Congress, that the Communist Party of China re-elected him for a new five-year term as Secretary General. 

Bilateral relations between China and Argentina celebrated their 50th anniversary this year, with the authorities declaring a "tear of friendship between the two countries." Argentina is ready to lean on that spirit in Bali.

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Rosario Ayerdi

Rosario Ayerdi

Jefa de Política. Mail: [email protected]


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