China hopes to build ‘high-quality economic relationship’ with Argentina as South America pivot rolls on
- Chinese commerce minister Wang Wentao met with Argentinian counterpart Sergio Massa on Thursday
- China is expanding its footprint in South America and Brazil and Argentina have already started using the yuan for trade settlements
China is ready to deepen exchanges and conversations with Argentina to push trade and economic development, commerce minister Wang Wentao said after meeting with his counterpart of the South American nation.
“China welcomes products from Argentina and Beijing expects an open, fair and bias-free business environment in Argentina for building a high-quality economic relationship,” Wang said, according to a Ministry of Commerce statement, after meeting Argentinian economy Minister Sergio Massa on Thursday.
Massa added on Twitter that both countries “are working to continue strengthening bilateral trade … by opening new markets”.
During his visit to China this week, Massa also met Export-Import Bank of China vice-president Zhang Wencai, vice foreign minister Deng Li and China’s special Representative on Latin American Affairs, Qiu Xiaoqi.
China is expanding its footprint in South America, a region long been dubbed the backyard of the United States.
Brazil and Argentina have started using the yuan for trade settlements, while Ecuador and China signed a free-trade agreement last month.
Massa also met with former Brazil president Dilma Rousseff, who is now the president of the New Development Bank, and said he hopes to “advance the path of Argentina’s relationship with the BRICS bank”.
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The Shanghai-based multilateral development agency is jointly funded by the BRICS countries of Brazil, Russia, India, China and South Africa.
Argentina is also reportedly in talks to renew and potentially further expand its currency swap line with China, a central bank source quoted by Reuters said last month, amid tumbling foreign reserves as it is battling against a historic drought that reduced exports.
In January, the People’s Bank of China expanded its currency swap agreement with Argentina by 35 billion yuan (US$4.9 billion) to 165 billion yuan.
Argentina’s use of its yuan swap line allows Argentine to pay for its imports, which inevitably need to be from China since yuan is not convertible
Alicia Garcia-Herrero, the chief economist for Asia-Pacific at Natixis, said that Argentina’s economy “is in shambles and there are hardly any US dollars left in its reserves”.
“Argentina’s use of its yuan swap line allows Argentina to pay for its imports, which inevitably need to be from China since yuan is not convertible,” she added.
“On top of that, Argentina is extremely rich in critical materials, so is Brazil, which means that China is very keen to offer such a swap line so as to be able to access such critical materials.”
Massa also met with Ganfeng Lithium CEO Li Liangbin after the Shanghai and Hong Kong-listed company invested US$2.7 billion in four lithium-related projects in Argentina
“Argentina is aiming to be the second-largest lithium export country in the world. With the principles of protecting companies’ interests, the environment and the community’s development, [the lithium industry] can help improve employment,” Massa said, according to Chinese media reports.
CCTV earlier reported that Argentina’s lithium export value surged by 133 per cent in the first quarter of 2023 to US$233 million, with over 70 per cent exported to Asian nations.
