Argentina Returns to Pragmatic China Policy

China has firmly established itself as a key strategic partner for Latin American nations. While collaborations have expanded across sectors like renewable energy, cultural exchange and technology, economic ties remain the cornerstone of these relationships. Trade, investment and infrastructure projects continue driving China’s engagement with the region.

Despite similarities in their relations with China, Latin American countries remain far from homogeneous in their approaches. Various factors influence each country’s foreign policy orientations, with a key determinant being the ruling party’s ideology, particularly in countries like Argentina and Brazil. Each administration’s political priorities and perspectives shape the direction and depth of its engagement with China, often leading to varied and contradictory policies.

Among the region’s largest economies, Brazil and Argentina maintain substantial economic ties with China. Brazil’s trade with China reached unprecedented levels in 2023, posting a surplus of $48.3 billion. Despite China’s position as Brazil’s top trading partner, the previous Bolsonaro administration enacted policies that complicated bilateral relations. Its ideologically driven approach hampered both economic outcomes and Brazil’s global standing.

Similarly, Argentine President Milei adopted a confrontational stance toward China after his December 2023 election. He grouped China with Brazil and Russia as nations that he claimed did not embrace democratic values. He went so far as to declare that his government would not prioritize economic relations with China, despite China’s role as a key trade and financial partner for Argentina, particularly given the country’s fragile and vulnerable macroeconomic situation. His early stance signaled a potential shift in Argentina’s relationship with China, raising concerns about the future of bilateral cooperation and economic ties between the two countries.

China has stood out as a close partner for Argentina since the early years of the current century, and the bilateral bonds have gradually strengthened. The signing of the Memorandum of Understanding on Cooperation in Trade and Investment in November 2004 marked a turning point in political ties. Both countries acknowledged the establishment of a strategic relationship, and Argentina recognized China as a market economy. In 2014, the decision to elevate the relationship to a comprehensive strategic partnership became a significant step in consolidating the complex bilateral relationship. This move led to the signing of 33 bilateral agreements between July 2014 and February 2015, further solidifying China’s role as a key partner in Argentina’s international integration and development efforts.

Although then-President Mauricio Macri initially distanced himself from China after taking office in 2015, partly to differentiate his foreign policy from that of his predecessors, a trend toward continuity in relations with Beijing became apparent during his first year in office. His presidential visit to China for the G20 summit and the bilateral meeting with Chinese President Xi Jinping in 2016, along with Macri’s participation in the inaugural Belt and Road Forum for International Cooperation in Beijing in 2017, signaled a notable shift in the president’s perception and foreign policy orientation toward China. These events demonstrated Macri’s recognition of the importance of fostering stronger ties with Beijing, reflecting a more pragmatic approach to Argentina’s relationship with China.

Similar to Macri’s administration, but with a more hostile tone, Javier Milei’s administration framed China as a secondary and largely irrelevant partner during its first month in office. Milei indicated that relations with China would be relegated to private enterprises, asserting that the national government would not prioritize any rapprochement with Beijing.

One of the first foreign policy decisions of Milei’s administration was to decline the invitation to join BRICS, a decision that came after extensive negotiations initiated by the previous government. The announcement did not surprise domestic observers, given that Milei’s prior statements about BRICS and its members had foreshadowed this outcome. Consequently, relations with Brazil and China, Argentina’s primary trade partners, have remained stagnant.

Milei’s efforts to maintain political distance from China were partly motivated by his desire to show domestic supporters a clear break from the previous administration. He also miscalculated that distancing Argentina from China would bring Washington closer to Buenos Aires. More fundamentally, he and his team underestimated China’s significance to Argentina’s economic stability, failing to grasp how vital the ties with China were to his country’s prosperity.

By last June, only six months after taking office, Milei’s government, facing an urgent need for foreign exchange to meet international obligations, had to request that the Chinese government renew the swap agreement. As a result, Argentina’s central bank and its Chinese counterpart renewed a currency swap line worth 35 billion yuan ($4.9 billion), extending it until July 2026. And this was just the beginning of the change in attitude. During the first week of October, Milei revealed in a TV interview that he plans to visit China in January 2025, recognizing that China is “a very interesting trading partner, because they don’t demand anything, all they ask is not to be bothered.” This statement reflects a notable change in his perspective on the bilateral relationship.

Pragmatism often emerges on its own terms. Regardless of differing political ideologies and orientations, Argentina’s precarious economic conditions leave little room for foreign policy alternatives for any government. Economic challenges force leaders to be pragmatic, putting partnerships and stability ahead of ideology.