China in a fix as Argentina under Javier Milei likely to upset its plans in South America

In its march to win every fortress in South America, China weaved and knit countless plans and strategies since the 1950s and provided economic aid, built infrastructure, and poured investments in the mineral rich countries of the continent to win them away from the US influence.

2.         But the electoral victory of Javier Milei, a right-wing politician, in the just concluded presidential poll in Argentina, seems to have upset China’s applecart in one of the important South American countries that shares strong bilateral economic relations. There is an apprehension that he may downgrade Buenos Aires’ ties with Beijing and upgrade with Washington DC.

3.         Javier Milei, a 53-year-old politician who will take office on December 10, has already shown his dislike for Beijing when he called the Chinese government as “assassins,” and accused the Communist Party of China of killing those “who cannot do what they want.”

4.         But push came to shove when Dina Mondino, senior adviser of Argentina’s President-elect Javier Milei in an interview with Russia’s news outlet RIA Novosti on November 20 said, “We will stop interacting with the governments of Brazil and China.” By making this statement, Dina Mondino, who is expected to join Javier Milei’s cabinet as Argentina’s Foreign Minister, alarmed China.

5.         “No countries could step out of diplomatic relations and still be able to engage in economic and trade cooperation; and it would be a huge foreign policy mistake for Argentina to cut ties with major countries like China or Brazil,” China’s Foreign Ministry Spokesperson Mao Ning said.

6.         However, Argentina’s engagements with China and any forum in which Beijing has a lead role will see a change and an indication to this effect was given by the senior adviser of Argentina’s President-elect.  She told Russian news agency Sputnik News that Buenos Aires would not proceed with plans to join the BRICS, an association of leading emerging economies comprising Brazil, Russia, India, China, and South Africa.

7.         “We do not understand the interest (in the bloc). We do not understand…what Argentina gets out of it at this moment. If later it turns out that there is an advantage, of course, we will analyse it,” Dina Mondino told Sputnik News.  

8.         In August, at the BRICS summit in Johannesburg, six countries such as Argentina, Saudi Arabia, the UAE, Iran, Egypt, and Ethiopia were facilitated to join the BRICS. These countries will formally become the bloc’s members in January next year. Javier Milei had, during the election campaign, pledged that if he got elected as the President, Buenos Aires would decline the bloc’s membership.

9.         There is also a hint that Argentina under the new administration will review its association with the China-led Belt and Road Initiative. In early 2022, Argentina under President Alberto Fernandez had joined the BRI.

10.       With this, Argentina became 21st country in South America and the Caribbean to join China-led overseas investment programmes. But in Argentina, which is already burdened by multi-billion dollar foreign debt, year-on-year inflation is over 140% and 40% of its 46 million people are reportedly living in poverty, the BRI was an issue during the presidential election campaign. It is seen as a tool to further suck Argentina into the China-led debt pile up.

11.       According to the Foreign Policy magazine, since 2005, Argentina has received $17 billion in loans mostly from China-backed state banks and $20.6 billion in currency swaps. On account of its depleted international reserves and lack of US dollars, Buenos Aires has been relying on currency-swap agreements with China to meet its financial obligations.

12.       This year, an additional 70 billion yuan-peso swap line was granted to Argentina by China. In an interview with Sputnik News, Dina Mondino said the Argentina government had in the past two decades conducted many “secret” negotiations with foreign countries, including China for currency swap arrangements. Terming these secret arrangements as “abnormal,” she said the Milei-led government would cease the practice.  

Besides, security is also a prominent area where the South American country would like to get rid of China’s influence. In the Patagonian region of Argentina, China has built a military-run space station which has a powerful 16-story antenna, Reuters said. China is said to have invested $50 million in the construction of the space station, considered as the first structure of its kind to be built outside Chinese territory.

Described as a “black box,” the facility is purportedly meant to track satellite launches and support the Chinese deep-space programme, but “most its activities are unknown” even to Argentine authorities, said the Foreign Policy magazine. In its defence, Beijing says the space station is meant for scientific purposes.

However, such assertions by China have been met with suspicion since 2018, especially after Argentine media reported about spotting Chinese military personnel on the site.  The space station, which is surrounded by an 8-foot barbed wire fence, has “generated criticism” across Argentina over the lack of domestic oversight, South China Morning Post said.

Negotiations were on with China for projects such as a new nuclear power plant in Lima, a town in Buenos Aires province, and a new port in Rio Grande, a strategically important Argentine city. It is feared that negotiations for these projects may now be nixed. A hint to this regard was given by Dina Mondino who told the Russian media that her country would offer these projects to private firms from other countries despite negotiations with China having reached an advanced stage.

Thus, writing is on the wall for China; its presence in the South American country under the Javier Milei government will not remain unchallenged even as Beijing says it stands ready with Buenos Aires to keep its relations “on a steady course forward.”