G20 in Buenos Aires: 'the close friendship' between China and Argentina
by Silvina Premat

The leaders of the two countries will sign 37 bilateral agreements at the summit. In 2017, Argentina imported goods from China worth US$ 12.3 billion but exported less than half of that. Two experts express their views about Sino-Argentinian relations.

Buenos Aires (AsiaNews) – "A close friendship erases distance," said Xi Jinping shortly before leaving China for the G20 summit. In a statement, the Chinese president said that his country and Argentina "are friends who stand out for their mutual trust" and are "partners in shared development".

The virtual closeness will be reinforced by 37 bilateral agreements that the Chinese president and his Argentine counterpart, Mauricio Macri, will sign tomorrow during their fifth meeting in two years.

The deals cover a wide range of areas – e-commerce, transportation, energy, infrastructure, science, technology and education, among others – and will deepen the link that has made China Argentina’s top source of foreign investment, with about US$ 10 billion in communications, energy, agriculture and infrastructure companies, as well as its second largest creditor after the International Monetary Fund (IMF).

China’s push has not set off any alarm bells among economic analysts and social scientists. AsiaNews spoke to two Argentine researchers with different political views but who are in favour of Chinese investments. In terms of trade, both would like to see the Asian juggernaut import more Argentinian products with added value and not simple goods and basic products.

In economic terms, the "close friendship" between the two countries, at least until now, is lopsided. In 2017, Argentina imported goods from China worth US$ 12.3 billion, while exports amounted to less than half of that, US$ 4.59 billion (US$ 5.82 billion in 2016).

One scholar is sociologist Walter Formento, director of the Politics and Economics Research Centre (Centro de Investigaciones en Política y Economía, CIEPE) and professor of Geopolitics, Hegemony and Communication at the Faculty of Letters and Philosophy of the National University of La Plata (Universidad nacional de La Plata, UNLP). The other is Fernando Pedrosa, a professor in Contemporary Political Processes and researcher at the Institute for the Study of Latin America and the Caribbean at the Faculty of Social Sciences of the University of Buenos Aires (Universidad de Buenos Aires, UBA), where he teaches the Politics of South-East Asia.

Xi Jinping's national and multipolar government project is, for Formento, "a great ally" for today's Argentina because it can have a great impact on the real economy, with all that follows in terms of output and trade. "Perhaps today China is the world player with the greatest impact because of its ability to invest and develop the real economy in a world in which the great historic financial players, in particular in the English-speaking world, are in crisis." The intellectual, who wrote Crisis mundial (World Crisis) with Wim Dierckxsens, is politically close to the National and Latin American Encounter (Encuentro nacional popular latinoamericano, ENPL), which merged with the Front for the Victory (Frente para la Victoria, FPV), a centre-left Peronist electoral alliance.

Pedrosa offers a historical approach. "China today reminds me of the 19th century when we were clients of Great Britain, a country with which Argentina had a complementary relationship. This is because, even if it wanted to, the UK could not produce what Argentina produced. It had neither the climate nor the land to do so. Then, when the United States became powerful, it was very competitive and had wheat, soy, lemons, etc. Everything we produced, they did too. By contrast, with China we are back to a complementary relationship, because it cannot produce in the future what we produce. We therefore have the possibility of a non-stop exchange over time."

If governments can manage investments to boost the strategic project of each country in a balanced way, such a policy should not promote "economic colonisation". Formento warns however that "In Argentina’s case, at the moment, we are dealing with an administration much more committed to doing business than to govern for the entire population".

Pedrosa works with the Ministry of Public Media and Contents System in the Macri government and is the author of The Other Left – Social Democracy Latin America (La otra izquierda. La socialdemocracia en América Latina). He admits that China "is trying to convince us, but we have the possibility of developing a good relationship without becoming their slaves."

Pedrosa notes that, in addition to China, Argentina "also depends economically" on the United States, Brazil and the Association of Southeast Asian Nations (ASEAN). "We do not know what will happen when they (the Chinese) become powerful and masters of the world; perhaps, at that point, they will have changed, but now Argentina is so backward that it needs to produce and generate jobs and capital for a leap forward." At the same time, the growing tensions between China and the United States are benefiting the Latin American region, because Beijing has cut imports from the United States and is buying food products from Argentina and Brazil.

"For Argentina, with respect to China and the Asia-Pacific region, the great challenge is to get China not only to buy raw materials like food and oil, but also more and more finished goods and services with high value added,” Formento says. Pedrosa agrees but warns: "Our problem with China is proportional [to the two countries’ economies]. The only thing we produce at a more or less reasonable level for China is food.”

According to Formento, China's interests in Argentina are not limited to food for its large population. "Beijing needs the southern oceanic passage that connects the South Atlantic and the South Pacific through the Beagle Channel and be present with satellites in the South Pole. Therefore, Argentina and South America are in a key position to negotiate with rising strategic players, like the BRICS [Brazil, Russia, India, China and South Africa], in particular Asia-Pacific and China. That is to say, they are in an unbeatable position to establish mutual understanding and development. They must not limit themselves to being subordinated to China, which buys goods and services with very low added value or only raw materials."

The decisions that will be made will allow us to understand if analyses like these are naive or if, in fact, we are dealing with "partners in shared development".