“The more China develops, the better for Argentines,” President Mauricio Macri told reporters outside the presidential residence Sunday afternoon. Macri had just bestowed Chinese head of state Xi Jinping with Argentina’s highest decoration, the Order of the Liberator General San Martin. Over the weekend, the two signed more than 30 bilateral trade deals.
Macri also gave Xi a polo horse.
“Argentina has its doors open to China” added the president. “I hope that they visit us more and more.”
This year’s G20 showcased an eager-to-please Argentina in desperate need of new export markets. With recession on the horizon, Macri officials have hoped a cheap peso and a record harvest will help cushion the fall. This weekend’s summit proved crucial.
Amid an ongoing trade war between two of its largest trade partners, Argentina managed to keep both China and the US content. G20 leaders signed a joint declaration Saturday afternoon, and US President Trump and Xi agreed to a 90 day tariff ceasefire Saturday evening.
The question of how Argentina would navigate the path between two of its largest trade partners, however, now seems moot. Macri’s meeting with Trump produced little more than memorandums of understanding and an earpiece gaffe. A hefty agreement to spur private capital investment through the Overseas Private Investment Corporation (OPIC) remains a letter of interest.
Argentine Ambassador to China Diego Guelar told Infobae this weekend’s China-Argentina deals represent more than US $5 billion in Chinese investment in railways, road work, and alternative energy. In exchange, China signed on to new purchases of cherries, meat, soy, and other agricultural products.
The two did not close the long-awaited construction financing deal for the Atucha III power plant. They did, however, sign an extended currency swap deal — bringing the existing deal’s total amount to US $18.7 billion — and a 5 year joint action plan spanning 2019-2023.
Sino-Argentine coziness is nothing new. “A lot of these deals have been in the works for a very long time,” says Margaret Myers, director of the China and Latin American program at Inter-American Dialogue. “If you think about the San Martin and Belgrano Cargas projects, even the power plant [Atucha III] deal has been on the docket for a while.” Both the US $2.4 billion Belgrano rail project and San Martin rail car purchases began under former president Cristina Fernandez de Kirchner.
Though Macri swept to power vowing to revise or cancel existing deals with China, he quickly changed tune. Macri signed over US $17 billion in Chinese energy and infrastructure investment in 2017 alone.
But this weekend’s round of investments belie a newly precarious economic standing. Speaking to reporters Saturday morning, Production Minister Dante Sica said China had “become a lender of last resort.”
When asked about Argentina’s relationship with the US and China, Sica affirmed that Argentina holds all players to the same standard. He added, however, that Argentina had “many needs in terms of productive and economic infrastructure; we need to open more markets.”
Macri has taken steps to improve deal terms with China — negotiating prices for the purchase of Chinese rail cars and reducing loan amounts — but Myers stressed that “Macri’s hands are a bit tied as concerns China. It is an extraordinarily important lender given Argentinas many financial issues both in terms of infrastructure and trade and investment.”
On Thursday, the China Railway Construction Corporation (CRCC) signed on to over US $1 billion in financing to renovate rail infrastructure on the San Martin line.
The Macri administration was careful not to inflame relations with China following a miscommunication between the White House and the Casa Rosada Friday morning. Following a comment from Trump press secretary Sarah Huckabee Sanders’ that Macri and Trump had discussed China’s “predatory economic activity” in their Friday meeting, Argentine officials quickly denied such language.
“I didn’t think that there had been a reference in those terms.“ Minister of Foreign Relations Jorge Faurie told reporters hours later.
On Sunday, Macri reiterated that no such language had been used. “We did not speak in these terms,” said the president.
Chinese G20 envoy Wang Xiaolong told a press conference Saturday that he did not understand the meaning of “predatory.” “I think the people and government of China’s cooperation partners are best placed to pass judgement on whether this cooperation has benefited their economic and social development or not,” said Wang.
According to November’s Argentina Pulse Survey, conducted by Poliarquía and the Wilson Center’s Argentina Project, 72 percent of Argentines said they held a “good” or “very good” image of China. 60% said the same of the United States.