Argentine Finance Minister Wraps Up Six-Day Visit to China with Impressive Results
June 3, 2023, 2022 (EIRNS)—Argentine Finance Minister Sergio Massa and his large delegation wrapped up a six-day visit to China in Beijing yesterday, with impressive results. He and his colleagues held dozens of meetings in Shanghai and Beijing with top government officials and business leaders, and signed agreements with some of China’s largest and most prominent corporations for increased investment in energy, mining, transportation (rail), construction and lithium exploitation, among other sectors. Massa’s enthusiasm about the results of the trip was such that he commented after one meeting “we should now be called ‘ArgenChina.’ ”
His final meeting in Beijing before an audience of representatives of 40 of China’s most important corporations—Huawei, Gezhouba Group, PowerChina, China Engineering and Machinery Corporation, among others—to discuss the merits of trade in yuan and perspectives for the Argentine economy, was received with great optimism.
One can almost hear the sound of teeth gnashing from Washington. Expect skullduggery from that quarter soon in response to these developments.
Highlights of the visit include the June 1 announcement by Dilma Rousseff, president of the BRICS New Development Bank (NDB), that the bank’s board of governors will vote on Argentina’s membership when they meet in South Africa during the first week of August. On June 2, Chairman of the Standing Committee of the National People's Congress Zhao Leji, told Deputy Maximo Kirchner and Deputy Cecilia Moreau, president of Argentina’s House of Deputies, that China fully backed Argentina’s membership in the BRICS itself, a message that was also transmitted by People’s Bank of China (PBOC) Governor Yi Gang and Finance Minister Liu Kun.
The same day, representing the Argentine state, Massa signed a Cooperation Agreement on the Belt and Road Initiative (BRI) with Zheng Shanjie, chairman of the National Development and Reform Commission, to deepen cooperation in trade, energy, infrastructure and finance.
The expansion of the currency swap that the PBOC has maintained with Argentina’s Central Bank was also an important achievement. Although there was no increase in the total $18 billion figure that had been mooted, PBOC did increase from $5 billion to $10 billion the amount of the swap to which Argentina has free access. It can be used to pay for imports (in yuan), intervene in the currency markets, or be converted to dollars to bolster reserves. The one conditionality the Chinese attached to the increase is that Argentina must maintain its existing agreement with the IMF.
Massa, in fact, spoke with a high-level Fund official from Beijing on June 2, to coordinate on his June 12 trip to Washington, where he is expected to sign a renegotiated agreement, that takes into account the effects of the drought that has devastated Argentine crops and reduced its export revenue this year by $20 billion. The expectation is that the Fund will ease its conditionalities and allocate $10.6 billion that would have otherwise been disbursed in three separate tranches during the rest of this year. But nothing here is written in stone, and the IMF can’t be counted on to do anything right.