Since 2008, Argentina has accumulated a bilateral trade deficit of $85 billion with China.

Although due to the recession and the sharp drop in imports, Argentina reached an almost unprecedented record last May and June by registering two consecutive months of surplus in bilateral trade with China, the truth is that it has not even managed to reverse – although it is contracting sharply – what has become a constant since 2008: a constant and high deficit in trade with the Asian giant.

In the first half of this year, the red for Argentina was 1,029 million dollars, a minimum figure compared to the bilateral deficits of 2022 and 2023: these two years, under the government of Alberto Fernandez And Cristina Fernández de Kirchner (CFK), negative balances clearly exceeded $9 billion.

If we consider the data from January 2008, the first full month of CFK's first presidency, the trade deficit with China amounts to 84.928 billion dollars, a figure that almost doubles the debt to the International Monetary Fund (IMF), triples the debt to the Central Bank's gross reserves and represents almost twenty times the estimated cost of the Patagonia dams, financed by China and built by a consortium led by a company of that origin.

The project was first launched in 2007 by the province of Santa Cruz, which was managed from Buenos Aires by the then president. Nstor Kirchner and the first lady, CFK, re-called (already cancelled) by the Nation in 2010 and finally awarded and awarded in 2012. Funding having been interrupted, the work has been stopped since the end of 2023, the date the current government took office.

The partial assessment is that the two dams on the Santa Cruz River have progressed by 20% and 40% respectively after 17 years since the first call for tenders, 14 since the second and 12 since the last and final one.

These few figures and references depict the low achievement of local objectives and the enormous asymmetry of Argentina's economic and commercial relations with China, which was part of a warning by Paolo Rocca, president of the Techint group, in Brazil, and an international seminar organized in Buenos Aires by the Argentine multinational.

Already in 2016, two years after the signing of the CFK in Beijing with the president Xi Jinpingthe Comprehensive Strategic Partnership with China, Rocca had said that the pact with China was a pact with the Devil. And in 2017, when Michael Acevedoof Aceitera General Deheza, assumed the presidency of the Argentine Industrial Union (an entity heavily influenced by Techint), the then new head of the UIA declared: the prices that China practices are like those of Moreno's Indec, due to the deliberate and systematic falsification of official statistics since January 2007, which is why the then Secretary of Commerce, Guillermo Morenowas sentenced to three years in prison for abuse of authority and destruction of public records.

China, Acevedo said, is not a market economy; there are no prices of similar products to compare with other markets. It is a price like Moreno's Indec. And added: We want to know how products imported from China will be treated.because we are very concerned, following Rocca's recent complaint that the expansion of China's commercial zone of influence has contributed substantially to the primarization of our economies.

China did what it did, Rocca explained, on the basis of unfair competition, because it is a country with an authoritarian and centralized system of government, which has the ability to allocate resources to different sectors of the economy based on decisions of tactical and strategic convenience.

The Techint official also cited a study by the European Commission on the anomalies of the Chinese economic system, driven, to a large extent, by the intervention of the state and the Chinese Communist Party, with a strong presence of state-owned enterprises, state-party symbiosis, intellectual property violations, restrictions on land ownership, absence of independent trade unions, limits on the mobility of people and subsidized energy prices, among other anomalies.

In fact, since the signing of the Comprehensive Strategic Partnership in 2014, Argentina has lost market share in China. A table from a recent report by the consulting firm Miguel Broda I compared the already very low participation (0.27%) of Argentine exports in purchases from China, with the even lower participation (0.24%) that they had in the first five months of this year. In other words, since the Global Strategic Association, which suggests a greater degree of access, Argentina has lost more than 11% of the already tiny quota it had ten years ago.

The main winners from China's trade rebalancing were Southeast Asian countries, Russia and Brazil (whose share increased from 2.64% to 4.59%), and the main losers were South Korea, Japan, Germany and the United States.

A study by the European Commission, with data from 2020, also shows that even among Latin American sales to China, Argentina accounted for 4%, compared to 52% for Brazil, 22% for Chile, 9% for Peru and 6% for Mexico.

In his presentation at the Techint International Seminar on China, Dante Sicaformer Minister of Production and founder of the consulting firm Abeceb, showed that while since 2002 sales from China have increased from 4 to 20% of total Argentine purchases, multiplying their share by five, those from Argentina to China have only increased by two percentage points, multiplying by one and a half.

Local exports to the Asian giant have suffered from Argentina's macroeconomic problems, but also from the active decisions of Beijing, which, in the name of added value and food security, initially limited purchases of soybean oil and meal from Argentina, to favor the purchase of cereals and their processing internally, and now aims for absolute self-sufficiency in basic cereals, a measure that recently came into force.

The law, passed by the legislature last December, covers 11 chapters with measures ranging from grain production, storage and processing and a legal framework for the Chinese Communist Party to guide local governments and the agricultural industry in increasing food production. This includes protecting farmland from conversion to other uses and safeguarding genetic resources.

China, moreover, manages a good part of its external food supply in Argentina. For example, as reported InfobaeA recent international investigation revealed that 64 fishing vessels operating under the light blue and white flag in the exclusive economic zone, up to 200 miles from the Argentine maritime coast, belong to Chinese companies, including 41 jiggers, dedicated to squid fishing (that is, half plus one of the 80 vessels of this type that catch the key species in the Argentine maritime trafficking chain have Chinese capital as the final beneficiary).

What is even more important is that the main trader or agroexporter of Argentina is a Chinese company. As has been the case consistently since 2020, except last year, in the first half of 2024, the ranking of the country's agroexporters was dominated by the Chinese Cofco, with 4.5 million tons, leaving Cargill in second place (4.3) and third behind Viterra. (4.1 million).

Cofco is the acronym for China's National Oils and Foodstuffsoriginally a Chinese state-owned holding company dedicated to grain purchasing and food production and trading, which in 2014 (the year CFK and Xi Jinping signed the Global Strategic Partnership) acquired 51% of Nidera and 51% of Noble Group, two others traders which it fully integrated between 2015 and 2016. It was thus able to establish an origination network in Argentina with 9 collection plants and 3 grain milling plants, in addition to one for biodiesel.

This handover was full of symbolism. Nidera was founded in the Netherlands in 1920 and its name is the acronym (in Dutch) of what were then its origin and grain trading nodes: Nederland, India (for the Dutch East Indies), Duitsland (Germany), Engeland (England), Russia (Russia) and Argentina.

Cofco, on the other hand, was born when, after the Chinese communist revolution, the government led by Old houses He took control of the agricultural sector and created state agencies specialized in different areas (cereals, oils, food products) which he later consolidated to become what is today the main grain trader in Argentina. Over the years, Cofco adopted a corporate status that allows it to present itself today as a private company.

Despite Xi Jinping's preaching of the dual circulation of the economy, consisting of increasing domestic consumption without giving up the dynamism of exports, the truth is that China's growth continues to depend largely on an international market to which it can pour its excess production capacity, he said at the Techint international seminar on synology. Margaret Myersof the Inter-American Dialogue, a think tank bipartisan based in Washington.

Myers showed in a graph how Chinese investment and trade priorities in Latin America have changed over the last twenty years, in terms of destination countries and sectors chosen. Paradoxically, it also shows how, after the signing of the Comprehensive Strategic Association in 2014, Argentina lost positions in the regional ranking of destinations (see above). Furthermore, in terms of sectors, two thirds of Chinese investments in Argentina are concentrated in extractive activities.

In turn, Aaron FriedbergAn expert in international politics and a professor at Princeton University, he stressed that despite joining the World Trade Organization (WTO) in 2001, Beijing has never lost sight of its priority: to radiate its power and keep control of the process in the hands of the Chinese Communist Party. In economic and commercial interventions abroad, he said, the doctrine is not Marxism-Leninism, but what he calls mercantilism-Leninism.

In the Argentine case, this is reflected in the striking figure already mentioned: 85 billion dollars in favor of China in just over 16 years of trade.