“They should be a perfect match, like a steak and a glass of Malbec. Argentina has fertile land and skilled farmers. China has 1.4 billion mouths to feed. Bilateral trade is expected to go from strength to strength. But Argentine politics fluctuates so much that China often wonders: where’s the meat?” thus begins a long article published on the website of the prestigious English magazine The Economist which reviews the multiple deals that the country is letting go in its relationship with the Asian giant.
The meat question “sometimes it’s literal”, jokes the newspaper, recalling that in 2021, three years after China opened its market to Argentine meat, the country “prohibited itself” from exporting meattrying to curb the rise in domestic prices. “The Chinese Couldn’t Believe It”, recalls Patricio Giusto, of the China-Argentina Observatory.
“Argentina is in desperate need of capital; China has deep pockets. China craves minerals; Argentina has mountains of them. Instead of exploiting these economic opportunities, Argentina’s current left-Peronist government has prioritized political ties and diplomats with China, which alarms the United States,” describes The Economist.
“A more pragmatic government it would try to get along with the two great powers, making the most of the complementarity of the Argentine and Chinese economies”, he adds, anticipating that the next elections could bring a government with these characteristics to power.
In reviewing how the trade relationship between the two countries has grown in recent decades, The Economist points out that more than half of the 62 loans made by Chinese commercial banks in Latin America between 2007 and 2021 went to Argentina, according to the ‘Inter-American Dialogue, a Washington think tank.
“Lately, however, progress has stalled. Where Argentina has a comparative advantage, the Fernández government erodes it. The blanket export ban on beef has disappeared, but seven popular cuts, such as roast, remain banned,” the publication indicates.
If you had moderately reasonable policiesit could add $25 billion a year to grain and oilseed exports over a decade, Fada’s David Miazzo told the magazine.
The magazine reviews the Chinese loan for the unfinished Santa Cruz power plants, the withdrawal of Chinese companies from the tender for the construction of the Vaca Muerta gas pipeline and the exit from the country of the Sinopec oil company after the disputes with the unions.
“The incentive to invest in energy is clouded by price controls. Households barely pay for electricity and waste it copiously. Power outages are frequent,” describes the magazine.
According to the opinion of The Economist, “Argentina seems more interested in being China’s ally than its supplierAnd he adds: “Many of Argentina’s recent initiatives with China have a lot of them political symbolism and little economic substance. Some of them have irritated the United States.”
He cites as an example the construction of a Chinese space observatory in Patagonia, closed to the public and staffed by military personnel.
Even if the Peronists distrust the Washington government, they do not want to antagonize it, among other things because the IMF’s support depends on the good will of the United States, the magazine points out. And it suggests that Argentina has begun to backtrack on some deals with China that the United States most opposes.
“The October elections should give way to a government with sounder economic policies, which it should benefit Argentina’s trade relations with China. It is also possible that he is less willing than the Peronists to promote China’s ambitions in the Western Hemisphere,” estimates The Economist.
“The Chinese communist regime may complain if Argentina chooses a government less favorable to its strategic objectives and closer to the United States. that Argentina’s economic policy is less absurdChinese investors could welcome it easily,” he concludes.
Source: Clarin
