Xi's strategic patience pays off as Milei flip-flops on China relations

The gravitational pull and impact of China on the Argentine economy is so great that, as is the case with the United States, the management of bilateral diplomacy circumvents the protocol of the Ministry of Foreign Affairs and extends to other areas of government. Nearly ten months after coming to power, President Javier Milei seems to have buried his aggressive speech anchored on ideological parameters with regard to the Asian giant. Now, his closest collaborators, including his sister, presidential chief of staff Karina Milei, are working to revive this relationship.

The president's personal shift toward Argentina's main trading partner was foreshadowed in his recent interview with television host Susana Gimnez. Milei said he was pleasantly surprised by relations with Beijing, which he had previously called a bloody dictatorship with which he would never do business. China is a very interesting trading partner, MIlei told Gimnez. They don't ask for anything. The only thing they ask is not to worry about it.

At this precise moment, one could see the famous pragmatism of Argentina's foreign policy manifesting itself, just as when the country established diplomatic relations with China in 1972, under the anti-communist dictatorship of Alejandro Agustín Lanuss. Like his predecessors, Milei noted his country's multidimensional dependence on China, which is not only its main trading partner but also the primary source of direct foreign investment and loans.

Change of position

The materialization of this new change in official position was left to the responsibility of the president's closest collaborator: his sister. Karina is on a mission to improve ties with Xi Jinping's government, aiming to recognize a critical partner in the race against the Central Bank's reserve shortage.

On July 30, Karina Milei met with Chinese Ambassador Wang Wei. She was accompanied by Diego Sucalesca, who shared the stage with Milei and who has headed the AAICI (Agencia Argentina de Inversiones y Comercio Internacional, or Argentine Agency for Investment and International Trade) for three months. The two sides exchanged views on bilateral relations and binational economic and trade cooperation, said a statement.

Speculation is growing that Karina and/or Sucalesca will soon visit China in what would be a sort of courtesy return following Beijing's decision to renew a $5 billion currency swap with Argentina in June 2024 , a decision considered a gesture by La Libertad Avanza, as it provided some room for maneuver in the face of debt maturities.

The idea of ​​the trip to China, interpreted as an act of goodwill in this Asian country, arose after speculation that the Argentine head of state could go to Beijing himself to attend the joint China-CELAC summit scheduled for January 2025.

It also follows reports preceding Milei's recent speech to the United Nations General Assembly, suggesting that the head of state would make a negative reference to China in his speech. The secrecy surrounding the speech has been a source of concern inside and outside the government, including senior officials at the Foreign Office, Profile was able to establish.

But the Argentine president ultimately did not formulate any further criticism of China. A few days later, one of its most loyal officials, Guillermo Francos, was sent on air to make the change in position even more explicit.

The reality is that Argentina and China have important trade relations. There are Chinese investments in Argentina, there is the question of trade between China and Argentina, the chief of staff said in a radio interview. There is a series of relations in which China has always worked effectively and met the requirements posed by our country in complex situations.

Persistent tensions

The turn of Milei's rhetoric towards China breaks with the clear foreign policy lines that he had drawn upon his arrival at the Casa Rosada, when he focused on aligning Argentina with the United States and Israel.

This approach was manifested in a series of actions, including the rejection of Argentina's already approved membership in the BRICS group of nations and the decision to purchase American-made Danish F-16 fighter jets rather than Sino-Pakistani JF-17 Thunder fighter jets.

The snub of the plane, Profile was able to establish itself, was poorly received by Beijing and led to an initial period of cooling in relations between the two nations.

But what has recently generated even greater tensions with China is the impact of this position on key areas in which the Asian giant is locally engaged, such as in the construction of the Jorge Cepernic and Nstor Kirchner dams in the province of Santa Cruz, the battle for the Hidrova del Paran river and several other infrastructure projects that have stagnated.

Another point that irked Beijing was the rumor circulating about an alleged meeting between Foreign Minister Diana Mondino and Taiwan's trade representative in Argentina, which those around Milei administration officials deny. Taiwan is the most sensitive point for the Asian country, which demands recognition of the one-China principle as the basis of its diplomatic relations.

An expert's perspective

Milei took a more realistic and pragmatic approach towards China

Ten months after coming to power, President Javier Milei has adopted a more realistic and pragmatic approach towards China, said Jorge Malena, a specialist in contemporary China and holder of a doctorate in political science.

China adopts an attitude of strategic patience towards our country, knowing that bilateral relations rest on a solid foundation. This view is not based on current circumstances, but in the long term, we have 52 years of bilateral relations. Pragmatism and realism were the typical note, Malena said in a conversation with Profile.

How do you assess the change in official position towards China?

One thing is the statements made during an election campaign, another thing is that once the elections are won, realism and pragmatism are required. In comparison, we could say that ten months into the administration, they have taken their time to get real about China.

There are topics that are more undeniable for those with a background in economics. China is not only for Latin America in general, but also for Argentina in particular, one of the three main trading partners, the largest foreign investor, lender and infrastructure builder.

It was clear that maintaining poor relations with China was not in the national interest.

Why is China showing strategic patience?

It is a recognition of what Argentina means: a country that is a global producer of beef, soybeans, barley sorghum, but also the third largest reserve of lithium in the world, an essential source for the economy .

The new direction of China's economic policy is to promote high-end electronic products, which is why lithium is extremely important. In 2014, we were called full strategic partners, one of the most important categories accorded to our allies.

Do you think bilateral relations may have been damaged?

It is unclear whether the meeting between Mondino and the Taiwanese official actually took place, at least with her as minister; it is about being duly informed about what that means and not getting carried away by dogmatism or ideological narrowness.

How would China interpret the possibility of an official motorcade going to Beijing?

This will be recognized as a gesture of friendship and a step forward in strengthening bilateral relations. It will be very important to be duly informed about what is appropriate in these cases as a diplomatic practice. Not only in terms of counterparty culture, but also in terms of bilateral relations.

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