Buenos Aires. The official Visit by Argentina’s Economics Minister Sergio Massa in the People’s Republic of China last week is seen as a great success in Argentine government circles.
Among his companions during the four-day visit, along with officials from his ministry and representatives of industrial and commercial associations, was Maximo Kirchner, son of the vice president and current deputy and president of the Peronist Party of the Province of Buenos Aires.
China is Argentina’s second largest trading partner after Brazil and the largest investor in the country.
The most important result of the negotiations is likely to be renovation of the currency swap, in which the People’s Republic gives the Argentines a loan in yuan equivalent to 19 billion US dollars in order to allow bilateral trade without going through the dollar make possible.
This loan represents a major relief for the Argentine economy. Due to the ongoing drought, agricultural exports have plummeted this year and there is a lack of foreign exchange. But it is also advantageous for China that some of its foreign trade and investments are conducted directly in yuan and no longer in dollars.
In this sense, the confirmations were made over billions investments in the energy sector. This involves financing for a hydroelectric power plant in Patagonia, for the third nuclear power plant at Atucha and for the second section of the gas pipelines between the Patagonian production fields and the industrial belt around Buenos Aires and for mining and refining of Lithium in northern Argentina. In addition, bilateral financing projects for infrastructure work, including the construction of several sewage treatment plants, were agreed.
Another important issue is likely to be China’s approval of Argentina’s entry into the Brics Group (Brazil, Russia, India, China, South Africa). A few months ago, President Alberto Fernández had already campaigned for it in Moscow. Brazil recently confirmed its support.
It’s already safe accession Argentina into the Brics Bank next August. On June 1, Massa, Maximo Kirchner and Central Bank Governor Miguel Pesce met in Shanghai with Dilma Rousseff, President of the Brics Group’s “New Development Bank”.
The United States is suspicious of Argentina’s new proximity to China. The head of the South Command of the US Armed Forces, General Laura Richardson, recently spoke publicly and negatively in a way voicedwhich in Argentina is reminiscent of the old days of “USA’s backyard” politics.
Last year, the planned purchase of a Chinese nuclear reactor for Atucha III received particular criticism from the USA, whereby its quality and safety were called into question became. Argentina replied that Britain had also recently purchased a reactor of the same type, without criticism from the United States.
Argentina negotiated also about the purchase of Chinese fighter jets. For years it had not been possible to acquire new western types as all models contain British components and are subject to the UK arms embargo.
Economy Minister Massa is one of the possible candidates to succeed President Fernández. He led the Peronist Frente Renovador in recent years and was in the opposition during Kirchner’s last term, although he was head of cabinet in her first government.
Massa had denied a possible candidacy last year. However, following Fernández’s announcement that he would not stand for re-election and the recent confirmation that Vice President Kirchner will not run either, the option is open again.