Javier Milei’s damaged links with China is cutting private-sector business short. Unfortunate statements from Argentina’s President and his overacting of the relationship with US President Donald Trump have hindered important work that maintains the flow of trade. Despite the statements being toned down in Argentina, Beijing and its investors are awaiting a concrete gesture: a presidential trip and a meeting with Xi Jinping or, in its absence, the visit of a high-ranking official. It would show the libertarian government values a relationship which took decades to build.
“It’s a verticalist country so somebody high-ranking is needed to make the trip with a serious formal agenda to show interest,” was the view of one source with links to the Asian country, speaking to Perfil. In the private sector they warn that trade is hampered by phytosanitary protocols or unapproved agreements over technicalities. That is why they highlight the importance of timing in the midst of the trade war with the United States and the "surprise" caused by recent statements from the US Treasury Secretary Scott Bessent regarding the currency swap and the need for Argentina to cancel it as soon as possible.
China is Argentina’s second-most important trading partner with a deficit of US$1.055 billion last March, according to the data from the INDEC national statistics bureau. The industrial superpower has investments in half our country’s provinces. Above all, in strategic sectors which can earn hard currency, like mining, fossil fuels or agribusiness.
Milei’s US trips
In his first 16 months in office, Milei has travelled nine times to the United States (Argentina’s fourth-most important trading partner) against none to China (second).
The Casa Rosada is pursuing a policy of total alignment withWashington, seeking a reciprocal trade agreement, even if the cost is friction at the very least within the Mercosur regional trade bloc. Foreign Minister Gerardo Werthein is a clear reflection of the priorities: a former ambassador to the United States and a scion of one of Argentina’s most powerful business clans with a strong influence in that nation.
Werthein has not stamped his passport for the Asian superpower. The last minister to travel to Asia was then-foreign minister Diana Mondino for a lightning visit in April 2024, with an agenda which sources with links to the global power described as “informal” and “low political voltage” in Beijing. At the same time Central Bank Governor Santiago Bausili and Finance Secretary Pablo Quirno were holding meetings to roll over Argentina's currency swap, which was then nearing its deadlines.
Days later, in France, while on the same international mission, Mondino blurted her unfortunate phrase —"The Chinese are all the same"— which muddied the libertarian administration’s only gesture up until then. Another short circuit was the ex-minister’s overtures to Taiwan.
The last official to travel to the nation governed by Xi Jinping was current ARCA (ex-AFIP) tax bureau chief Juan Pazo, a former industry & commerce secretary. Late last year, Presidential Chief-of-Staff Karina Milei was scheduled to travel to the Chinese Export and Import Trade Fair but she never departed.
Meanwhile, the only time Milei shook hands with Xi was at the G20 summit in Río de Janeiro.
Investments for hydroelectric dams?
A point in suspense to date during the Milei presidency is the funding which China has yet to send to resume the construction of the hydro-electric dams in Santa Cruz: Jorge Cepernic and Néstor Kirchner. Of the scheduled credit, a total US$4.7 billion, only US$1.8billion has arrived.
One of the dams, the Cepernic, is 40-percent complete. According to business sources participating in the project consulted by Perfil, "negotiations are underway to advance" in the mega-works and to arrive at an agreement to resolve the technical problems that stand in the way. These include recalculating the costs generated by the halt in construction, without paying Gezhouba Group Corp, the main shareholder.
Other works are also halted, including the rehabilitation of the Belgrano Cargas freight railway line with an investment of US$800 million and the direct investment in 12 mining projects of capital from the Asian nation (seven of them related to lithium).
Much to discuss.
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