The gravitational pull and impact of China on Argentina’s economy is so sizeable that, as is the case with the United States, the handling of bilateral diplomacy bypasseses Foreign Ministry protocol and spreads into other areas of government. Nearly 10 months into his administration, President Javier Milei seems to have buried his aggressive narrative anchored on ideological parameters towards the Asian giant. Now he has his closest collaborators, including his sister, presidential chief-of-staff Karina Milei, working on a relaunch of the relationship.
The President’s personal shift towards Argentina's top trading partner was announced in his recent interview with TV host Susana Giménez. Milei said he was “pleasantly surprised” about relations with Beijing, which he had previously once branded a “bloody dictatorship” that he would never do business with. “China is a very interesting trading partner,” MIlei told Giménez. “They don’t demand anything. The only thing they ask is not to be bothered.”
At that very moment, that famous “pragmatism” of Argentine foreign policy could be seen kicking in, just as it did when the country established diplomatic relations with China in 1972 during Alejandro Agustín Lanusse’s “anti-communist” dictatorship. Like his predecessors, Milei has seen his country’s multidimensional dependency on China, which is not only its main trading partner but the first source of direct foreign investment and lending.
Shift in stance
The materialisation of this new official stance switch has been left in charge of the President’s closest collaborator: his sister. Karina is on a mission to improve the links with Xi Jinping’s government, in an attempt to acknowledge a vital partner in the race against scarcity of Central Bank reserves.
On July 30, Karina Milei met with Chinese ambassador Wang Wei. She was accompanied by Diego Sucalesca, who used to share the stage with Milei and for three months now has been the head of the AAICI (Agencia Argentina de Inversiones y Comercio Internacional, or “Argentine Investment and International Trade Agency”). “Both parties exchanged opinions on bilateral relations and bi-national economic and trading cooperation,” read a statement.
Speculation is growing that Karina and/or Sucalesca will travel to China shortly in what would be a kind of return of courtesies following Beijing’s decision to renew a US$5-billion currency swap with Argentina in June 2024 – a move valued as a “gesture” by the La Libertad Avanza administration, since it provided some breathing room amid debt maturities.
The idea of the China trip – which is interpreted as an act of goodwill in the Asian country – came after speculation that Argentina’s head of state might travel himself to Beijing to attend the joint China-CELAC summit scheduled for January 2025.
It also came after reports ahead of Milei’s recent speech to the United Nations General Assembly suggesting that the head of state would make a negative reference to China in his speech. The secrecy about the speech was a source of concern to those inside and outside of government, including top-level officials in the Foreign Ministry, Perfil was able to establish.
But Argentina’s President, in the end, did not voice further criticisms of China. A few days later, one of his most trusted officials, Guillermo Francos, was sent onto the airwaves to make the shift in stance even more explicit.
“The reality is that Argentina and China have an important trading relationship. There are Chinese investments in Argentina, there is the issue of the swap China has with Argentina,” the Cabinet Chief said in a radio interview. “There are a series of relations in which China has always worked effectively and has responded to the requirements set by our country in complex situations.”
Remaining tensions
The twist in Milei’s rhetoric towards China has broken with the clear foreign policy lines he drew upon his arrival at the Casa Rosada, when he focused on Argentina’s alignment with the United States and Israel.
This approach was evidenced through a series of actions, including the rejection of Argentina’s already approved membership of the BRICS group of nations and the decision to purchase US-made Danish F-16 fighter planes over Sino-Pakistani JF-17 Thunder fighter jets.
The plane snub, Perfil was able to establish, was “received badly” by Beijing and led to an initial cooling period of ties between the two nations.
Yet what generated even greater tensions with China of late is the impact that stance had on key areas where the Asian giant is engaged locally, such as in the construction of the Jorge Cepernic and Néstor Kirchner dams in Santa Cruz Province, the battle over the Hidrovía del Paraná waterway and several other infrastructure projects which have stagnated.
Another point which peeved Beijing was the rumour circulating of an alleged meeting between Foreign Ministry Diana Mondino and Taiwan’s trade representative in Argentina, something the Milei administration official’s inner circle denies. Taiwan is the most sensitive point for the Asian country, which demands recognition of the principle of “a single China” as a basis for its diplomatic links.
The expert view
Milei has taken ‘more realistic and pragmatic’ approach to China
Ten months into his government, President Javier Milei has taken a “more realistic and pragmatic” approach towards China, argues Jorge Malena, a specialist in contemporary China with a PhD in Political Science.
“China has an attitude of ‘strategic patience’ towards our country, in light of their understanding that the bilateral relationship has strong foundations. The view is not based on current circumstances but on the long term – we have 52 years of bilateral relations. Pragmatism and realism has been the typical note,” said Malena in conversation with Perfil.
How do you evaluate the change of official stance towards China?
One thing is statements made during an election campaign and another thing is that, once the election was won, realism and pragmatism are demanded. Comparatively, we might say that 10 months into the administration, they have taken their time in assuming that realism about China.
There are matters which are more undeniable for those with training on economic matters. China is not only for Latin America in general, but for Argentina in particular, one of the three main trading partners, the biggest foreign investor, lender and infrastructure builder.
It was obvious that it was not convenient for the national interest to have a bad relationship with China.
Why does China have “strategic patience”?
It’s an acknowledgment of what Argentina means: a country that is a worldwide producer of beef, soy, barley sorghum, but also the third biggest reserve of lithium in the world – an essential supply for the economy.
The new orientation in China’s economic policy is to promote high-end electronic products, that is why lithium is extremely important. In 2014 we were called integral strategic partners, one of the most important categories granted to its allies.
Do you believe the bilateral relationship may have been damaged?
It's not known for a fact if the meeting between Mondino and the Taiwanese official actually took place, at least with her as a minister; the issue is about being duly informed about what it means and not being carried away by dogmatisms or ideological narrow-mindedness.
How would China read the possibility of an official retinue travelling to Beijing?
It will be acknowledged as a gesture of friendship and a step forward in the strengthening of the bilateral relationship. It will be very important to be duly advised about what is appropriate in these cases as a diplomatic practice. Not only in the sense of the counterparty’s culture, but also in terms of what the bilateral relationship has been like.
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