Half a century of relations between Argentina and China

On February 19, 2022, Argentina and China commemorated 50 years of diplomatic relations that have gone through different stages that have followed the accelerated rise of the Asian power on a global scale. Currently, asymmetries require adjusting strategies to maximize the benefits derived from Argentina’s growing interdependence on a country that will probably be the world’s leading economy by mid-century.

Already at the end of the 1970s, Argentina was trying to take advantage of the potential agrifood demand of an economy at the dawn of extensive reforms. The 1980s were marked by the primacy of external and internal factors where the restoration of democracy in Argentina boosted relations with China. Under similar worldviews as “developing and non-aligned economies”, both parties made progress in the signing of agreements, typical of a cooperative agenda.

Later, the 1990s provided a particularly suitable framework for the deployment of a more intense bilateral agenda, favored by globalization with its consequences on economic liberalization (Washington Consensus), Chinese expectations to join the WTO, and attractiveness generated by the Southern Common Market (Mercosur) project, and Argentina’s economic stabilization.

During this stage, China’s dynamic growth amplified options for expanding trade flows under a pattern of complementarity, channeling loans from Chinese financial institutions for social programs, and attracting Chinese investment capital (Foreign Investment, FI), particularly interested in mining, agri-food, and energy sectors. Chinese state-owned enterprises (SOEs), encouraged by the government’s internationalization strategy, explored opportunities in the country.

Backed by an active presidential commercial diplomacy, the respective business sectors (public and private) assumed a greater role, and issues such as migration, double taxation, investment protection (BTIs), customs cooperation, and the opening of an Argentine trade promotion center in Shanghai, boosted a dense bilateral agenda.

The first decades of the 21st century indicate divergent economic paths, which, however, did not hinder the continuity and expansion of bilateral relations. China maintained high growth rates and deployed in Latin America and the Caribbean an active strategy of commercial, cultural, investment, and financial penetration.

On the other hand, Argentina was immersed in a critical economic phase which was – partially – overcome as of 2004. At this stage, China played a central role in the traction of Argentine agri-food exports, thus helping the ailing national economy to obtain income thanks to the boom in international commodity prices.

The visit of former President Hu Jintao to Argentina in 2004 confirmed the Chinese interest in investing locally in strategic sectors such as railroads, telecommunications, roads, ports, mining, and hydrocarbons. The agreements signed at that time confirmed the importance for Argentina of a bilateral relationship with China. This fact was assumed in the words of Néstor Kirchner as a geopolitical “counterweight” to the U.S. proposal to create a Free Trade Area of the Americas (FTAA) and “industrialization factor”.

The political-ideological harmony between “leftist” governments in the region: Brazil, Argentina, Ecuador, Bolivia, and Venezuela, allowed China a less interfered insertion by the United States which was trying to “contain” the growing Chinese influence. On the other hand, the creation of the Community of Latin American and Caribbean States (CELAC) in 2010, fed back into Argentina’s (and Latin America’s) desire to deepen ties with China.

During the last decade and up to the present, bilateral relations have been consolidated. In 2014, Presidents Cristina Fernández de Kirchner and Xi Jinping signed the Joint Declaration for the Establishment of the Comprehensive Strategic Partnership between the two countries. Other agreements on economic, commercial, financial, nuclear, and cultural cooperation, included the granting by China of a US$4,714 million loan to finance the Kirchner and Cepernic dams (Santa Cruz province) and the loan for the total renovation of the Belgrano Cargas Railway tracks validated Argentina’s entry – de facto – to the Belt and Road (BRI) project.

Since then, Chinese investments have flowed into sectors such as infrastructure, telecommunications, oil extraction, and conventional and non-conventional energy. Financing from Chinese state-owned banks has supported and continues to support development projects in municipalities under the auspices of “city and province twinning” initiatives that bring distant geographies closer together and blend different identities. Subsequently, and also as a result of the 2014 governmental agreements.

But if the factual is relevant, the symbolic occupies a prominent place. In five decades the construction of representations of China at the local level has evolved positively. Immigration consolidated the establishment of an “overseas Chinese community” with an active social presence whose differentiated cultural identity generates interest.

The cultural promotion through the creation of Confucius Institutes in two universities (the University of Buenos Aires;  and La Plata University) feeds the curiosity to learn about Chinese culture; the opening of bilingual schools (Chinese-Spanish), the dissemination of studies on Argentine literature in China, tango as a popular expression, and the opening of study centers on China in Argentine universities and economic think tanks, has served to reaffirm the expected continuity of a strategic bilateral relationship with an extra-regional actor of growing global influence.

The recent visit of President Alberto Fernández to China in February 2022, reaffirmed Argentina’s interest in having it as a strategic partner. Indeed, China represents a political ally; an export of agro-industrial products and energy market; a source of investments (IE); a credit provider, and an innovation center for the acquisition and transfer of new technologies. For instance, in the nuclear sector, the construction of a new plant financed by Chinese banks would transform Argentina into a leading case by having an experimental Hualong One reactor.

This picture is complemented by Argentina’s formal entry into the Chinese project on global connectivity of the Belt and Road in its different components (land, railway infrastructure, maritime-port, digital-telecommunications 5G) through expected financing of US$23 billion, the search for alliances in science and technology focused on the space sector and the extension of the Swaps Agreement up to US$21.7 billion.

Joint participation in the G-20 also offers another level of bilateral and multilateral interaction in which both parties share interests in global stability, economic development, and the reduction of North-South asymmetries.

On the projections of these relations, the gaps and asymmetries of power between China and developing nations such as Argentina plunged into periodic crises in a convulsed world, will require managing a common agenda with greater diplomatic expertise in order to maximize the benefits derived from China’s growing interdependence.

In this way, China can play a central role for Argentina in the coming decades, driving trade exchanges, attracting investments, and contributing to local development through financial support for critical infrastructure projects.

Translated from Spanish by Janaína Ruviaro da Silva

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