Photo: Flickr.
With the inauguration of President Javier Milei in Argentina, it appeared that relations with China would be curtailed due to the new president’s critical view of the Asian country. However, in a recent interview with Bloomberg News, Milei struck a more pragmatic tone, stating that trade relations with China will remain unchanged and that he has no intention of changing an $18 billion currency swap.
Acknowledging the complexity of the international landscape, the liberal president explained that his administration is seeking to balance relations with both the United States and China in order to address economic problems and stabilize Argentina’s domestic economy, where inflation is running at 276%.
Chinese trade and investment play a key role in Argentina’s economy, driving sectors ranging from commodities and energy to infrastructure. Projects such as hydroelectric dams, oil drilling, and a Chinese-funded space station are examples of this relationship.
Despite political and economic tensions, China remains the second-largest buyer of Argentine exports and the main source of imports. It is also a key player in the lithium industry, essential for battery production, an investment that has attracted U.S. attention.
President Milei has sought to balance Argentina’s foreign relations by taking steps that target both the U.S. and China. While he has made decisions that favor relations with the U.S., such as the purchase of U.S. aircraft for the national air force and a tougher stance against Chinese fishing fleets, Milei recognizes the importance of maintaining stable relations with China for the country’s economic stability.
Despite an initial rhetoric critical of socialism and state intervention, Milei recognized the need for pragmatism and international cooperation to address Argentina’s economic challenges.
The currency swap line with China and Chinese investment are key elements in Milei’s strategy to stabilize the economy and attract foreign investment, although he acknowledges that they are not perfect solutions and that there are economic risks associated with them.
For Argentines, China’s influence is evident in everyday life, from the presence of “Made in China” products to Chinese involvement in infrastructure projects throughout the country.
The interview reflects a shift in the Milei government’s current diplomatic strategy toward pragmatism to ensure Argentina’s economic and political stability.
Main source:
El giro pragmático de Javier Milei sobre China | Bloomberg (2024, abril 4)https://www.bloomberglinea.com/latinoamerica/argentina/el-anarcocapitalista-milei-se-transforma-en-pragmatico-sobre-china/