Could China end going to the rescue of crisis-prone Argentina?

Saturday, February 22nd 2020 - 10:15 UTC

Full article 4 comments

Argentina is thought to be on the brink of falling into its ninth sovereign default, prompting some analysts to speculate whether the crisis-prone South American country might be tempted to accept funding from China. Read full article

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Enrique Massot
It's nothing short of perplexing that Argentina's possible trade options with China would deserve such a headline.

Firstly, Argentina has already been trading with China for some time now.

During CFK's second term, “Argentina signed 20 cooperation treaties and agreed a number of finance packages for Chinese-built infrastructure projects, including a controversial nuclear complex and two major dams,” notes dialogochino.net.

“Macri expressed concern over the deals, although he ultimately declined to cancel them,” the same article reads.

Secondly, it's difficult to imagine why this could surprise anyone considering that each country should be free to get partners as it wishes. Or isn't?

Since becoming Argentina's president, Alberto Fernandez has demonstrated ability to engage even the less likely interlocutors -- by doing so, he demonstrated understanding that he is governing for all Argentines -- not only those who voted for him, and he has also considered that his electoral victory was reached by building a front -- not just a homogeneous party.
Feb 23rd, 2020 - 04:13 am - Link - Report abuse +1
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DemonTree
They're talking about loans, not trade. China likes to give loans with natural resources as collateral, which might not be something Argentina wants to risk. But beggars can't be choosers...
Feb 23rd, 2020 - 10:44 pm - Link - Report abuse 0
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Enrique Massot
I think trade is part of the equation, as China is the main buyer of Argentine soybeans while “Argentina is one of China's main trading partners in South America...”

And while former president Macri was initially wary of dealing with China, he soon became more pragmatic and agreed with Chinese President Xi Jinping “to bolster economic ties between the two countries in areas such as trade, investment and infrastructure.”

However, I agree with your point: Argentina must keep its eggs in several baskets and should not allow a single country to have too dominant a position. This would prevent Argentina from being a beggar unable to make choices.
Feb 24th, 2020 - 02:06 am - Link - Report abuse 0
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DemonTree
If Argentina is an important trade partner for China then China would have an interest in bailing Argentina out. That's the reason the UK gave Ireland a bailout loan after the financial crisis (Ireland needed a bailout because they decided to nationalise the private debt run up by Irish banks, sound familiar?)

I would have thought the relationship between Argentina and China was more the other way around (as shown by Macri), but maybe it goes both ways. Anyway, it would be much better for Argentina if the government can do a deal with the creditors, otherwise they really won't have much choice who they accept money from.
Feb 24th, 2020 - 09:19 pm - Link - Report abuse 0
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