China wants to be the economic “savior” for Argentina

Argentina’s new president, Alberto Fernandez, is facing an economic crisis. China wants to seize this opportunity to play a key role in “restoring” Argentina’s economy.

The world’s second-largest economy is Argentina’s main trading partner. About two-thirds of $16.5 billion worth of Argentina’s total exports in 2018 were sent to China.

In 2018, Chinese imports from Argentina increased by 20 percent and this trend is expected to continue.

Argentina’s economy is expected to shrink 3.1 percent this year, and inflation can reach 54 percent according to International Monetary Fund forecasts.

China is known for its debt-trap investment in the belt-and-road initiatives targeting countries in economic distress. There are Chinese infrastructure projects underway in this South American country: two hydroelectric dams in the southern region of Patagonia and a new tunnel connecting Argentina and Chile.

China has been expanding purchases of Argentina’s soybeans and other agricultural products including meat in the middle of this year as a result of US-China Trade war.

Lithium and gold have been two of the stellar mining products for Chinese companies. Over 20 percent of total investments in the sector has come from China, according to industry figures. Argentina can attract Chinese investments in this area.

China also built a space station in Argentina. Senior U.S. defense officials warned that the Chinese military could monitor and potentially target U.S. and allied satellites from a new deep-space ground station in the Western Hemisphere, located in the deserts of Patagonia.

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GM35

Dec. 23, 2019