China is a growing investor and a major lender to Argentina, making it nearly impossible for the South American nation to distance itself from the Asian country, analysts say. File Photo by Enrique Garcia Medina/EPA
BUENOS AIRES, Oct. 21 (UPI) — With $14 billion in investment projects and rising exports, China has consolidated its position as a key trading partner for Argentina.
The relationship between the two countries has been at the center of debate as the U.S. Treasury agreed to a $20 billion currency swap to support the economic reform program led by President Javier Milei.
U.S. Treasury Secretary Scott Bessent announced the agreement with Argentina’s Central Bank on X on Tuesday, describing it as “a bridge to a better future, not a bailout.”
“We don’t want another failed state in Latin America, and a strong, stable Argentina as a good neighbor is explicitly in the strategic interest of the United States,” Bessent said.
Earlier, the Treasury secretary expressed an intent to limit China’s presence in Argentina, particularly in strategic sectors such as ports, military bases and observation centers.
China is a growing investor and a major lender to Argentina, making it nearly impossible for the South American nation to distance itself from the Asian country, analysts say.
Under the Strategic Dialogue for Economic Coordination and Cooperation, China has 10 projects in Argentina worth $14 billion at various stages of implementation.
Among them are a nuclear power plant, a hydroelectric complex and the rehabilitation of railway lines. They also include a power transmission project in the Buenos Aires metropolitan area and several renewable energy generation initiatives.
Argentina is also part of China’s Belt and Road Initiative, which includes a memorandum of understanding and 13 cooperation agreements in areas such as energy, transportation and major infrastructure projects. However, none of those projects has begun.
Other bilateral agreements include a Chinese-operated deep-space tracking station in Neuquén and the CART radio telescope in San Juan, which is being assembled.
The Argentine Chamber of Exporters also notes the growing presence of Chinese brands in the country, mainly in technology and automobiles, as well as mergers and acquisitions abroad that have domestic effects.
Fernando Landa, the chamber president, told UPI that the $18 billion currency swap the Central Bank of Argentina maintains with the People’s Bank of China represents 43% of Argentina’s gross reserves. The mechanism allows the country to access Chinese currency in times of need, serving as a financial cushion.
Commenting on the U.S. Treasury secretary’s remarks, Gonzalo Ghiggino, a professor at Zhejiang University of International Studies, told UPI, “It is very difficult to replace China in trade and investment. China is an important source of support for Argentina; the swap is a crucial backstop for the Central Bank’s reserves.”
He added, “China’s investment potential is enormous. It is technically impossible to set the country aside, and given the current situation and future outlook, Argentina needs China.”
According to Argentina’s National Institute of Statistics and Censuses, China surpassed Brazil in September for the first time since 2023 to become Argentina’s top trading partner.
Trade with the Asian giant totaled $3.11 billion, leaving Buenos Aires with a $523 million deficit. Argentine exports to China rose 31.3% to $1.82 billion, while imports surged 201.7% to $1.29 billion.
“China is a major buyer of agricultural products, but also a key player in mining,” Landa said.
The Central Bank of Argentina reported that as of the first quarter, China ranked 14th in accumulated foreign direct investment at $4.29 billion, just 2% of the total, with interests in agriculture and mining, among other sectors.
“The investments are tied to China’s interest in raw materials, especially lithium, where it holds a strong global position,” Landa said.
Ghiggino said Chinese companies are investing the most in the mining sector.
“In recent years, they have invested heavily in infrastructure. A notable example is the Belgrano Cargas railway. But with the high demand for lithium, much of the investment is now concentrated in northern Argentina. Mining is a major draw and has enormous potential,” he said.
