Historical Background

Argentina established diplomatic relations with the People’s Republic of China (PRC) in 1972. After his overthrow in 1955 and exile to Spain in the 1960s, Argentine General Juan Domingo Perón would make public his sympathy for the Chinese Revolution and the Maoist government. However, under his administration (1946–55) trade relations with socialist China were restricted and limited to the private level.

Until 1972, with US influence in Latin America particularly strong in the context of the Cold War, Buenos Aires had recognised Taiwan as the sole government representative of China. The military dictatorship led by General Juan C. Onganía (1966–70), who was very close to Washington, kept its distance from the PRC due to the Argentine policy of ‘ideological frontiers’, which was associated with the US strategy of cutting all ties with communist countries. Since the early 1970s, however, a growing number of countries have started to recognise the PRC, especially after US President Richard Nixon’s 1972 visit to Beijing, at a time when the United States was weakened by the failure of its intervention in Vietnam, the dollar crisis, the growing economic competition from Europe and Japan, and the expansionism of the Soviet Union. In Argentina, the tough internal struggle between the factions associated with the two superpowers brought General Alejandro A. Lanusse to power in the last stage of the military dictatorship. During his term, from 1971 to 1973, he paved the way for the normalisation of diplomatic relations with Beijing, as part of a strategy of distancing himself from Washington. Lanusse also improved relations with the Soviet Bloc, abandoning the policy of ‘ideological borders’ in favour of an ‘opening to the East’, which included stipulating far-reaching trade agreements with Moscow. This continued to a large extent in the foreign policy of the new Peronist government (1973–76), which sought to distance itself from the United States by strengthening relations with other Latin American countries and diplomatic ties with both the Soviet Union and China.

After Mao Zedong’s death in 1976 and the beginning of the economic reforms under Deng Xiaoping in the late 1970s, a new stage in bilateral relations began. In Argentina, the coup on 24 March 1976 installed a violent dictatorship that would last until 1983. This regime established strong economic, political, and strategic ties with both superpowers, but the faction headed by Jorge R. Videla increasingly leaned towards the Soviet Union. Dictator Videla (in power from 1976 to 1981) consolidated trade relations with the Soviet Union, while at the same time developing political relations with Beijing, encouraged by the capitalist changes taking place in China and the normalisation of relations between Washington and Beijing in 1979. In June 1980, Videla paid a six-day official visit to China, where he signed a series of agreements on the sale of meat and grain and on scientific, technological, and financial cooperation. These agreements helped to lift Argentina’s dictatorship out of international isolation following the 1976 coup, and to counter criticism from the international community of the brutal human rights violations perpetrated by the regime.

After the return to a constitutional regime in December 1983, the government of Raúl Alfonsín (1983–89) intensified diplomatic relations with China as part of a strategy to reenter the international system and to widen Argentina’s autonomy vis-a-vis the United States. Alfonsín’s visit to China in 1988 added military cooperation to the bilateral agenda, which until then had been largely associated with grain sales.

In the 1990s, the end of the Cold War and the global hegemony of neoliberalism shaped bilateral relations during the two successive governments of Carlos Menem (1989–99). As trade with the Soviet Union had been in decline since 1986, Argentina sought to expand its commercial ties with China. This was why the Menem government did not support Western sanctions against Beijing after the crackdown on the Chinese democratic movement in 1989. Although Argentina’s strategic realignment with the United States in the early 1990s took precedence over bilateral relations with China, President Menem politically supported China’s aspiration to join the World Trade Organization (WTO) after his re-election in 1995 and Argentina continued to back China’s attempt to be recognised as a ‘market economy’, even as the controversy continued long after China’s accession to the WTO in 2001.

After the deep economic, social, and political crises of 2001 in Argentina, the 12 years covered by the presidencies of Néstor Kirchner (2003–07) and Cristina Fernández de Kirchner (2007–11 and 2011–15) marked a qualitative leap in bilateral relations with China. China became a major trading partner, investor, and key source of financial support for the Argentine Government. The ‘strategic partnership’ that Argentina established with China in 2004 was upgraded to a ‘comprehensive strategic partnership’ in 2014.

Despite some initial distancing from the government of the conservative Mauricio Macri (2015–19) due to the reorientation of its foreign policy towards the United States and Europe, commercial and financial relations with China continued to deepen. For Argentina’s ruling classes, economic association with China has already become a ‘state policy’ that transcends political divisions.

These relations were further intensified in the context of the Covid-19 pandemic under the Alberto Fernández’s administration (2019–23). During the Fernández period, the escalating trade and technological war between Washington and Beijing made economic cooperation with China difficult. During a presidential visit to China in November 2022, numerous agreements were signed, covering Chinese investments in lithium extraction, resumption of construction works on two hydroelectric dams in the southern province of Santa Cruz, and transition to 5G technology with the Chinese company Huawei. An agreement to establish numerous pig farms for production and export to China, with Chinese financing, was made public (for a fuller picture of the twists and turns of this deal, see here, here, and here). With the explicit support of Chinese President Xi Jinping, in August 2023 Argentina was invited to join the BRICS group along with Saudi Arabia, Iran, the United Arab Emirates, Ethiopia, and Egypt.

President Javier Milei, in office since December 2023, has marked a profound shift in Argentina’s foreign policy by proclaiming his anarcho-capitalist faith and his neoliberal program. He announced that his administration will not maintain state relations with governments that he calls ‘communist’, among them Argentina’s two main economic partners, Brazil and China. Meanwhile, he declared alignment with the United States and Israel. This international ideological and political positioning led him to reject the invitation to join the BRICS that the previous government had already accepted (Argentina was slated to join in January 2024). At the same time, his frictions with China led to the suspension of several public works with Chinese participation, paralysing these projects. Milei’s position, viewed as aligning with the US policy of ‘decoupling’ with China, generates opposition from various social groups and deep divisions within the Argentine ruling classes, as it will hurt the ties already formed between many of the elites and Chinese capital. In response to the Milei government’s provocative statements, China warned that it might reduce its purchases of grains and meat from Argentina, diverting those purchases to Brazil, as well as suspend a currency swap agreed by the government of Alberto Fernández. As of July 2024, the uncertainty in the bilateral economic relationship continues. The diplomatic relations between the two countries keep deteriorating, while Argentina suffers from a decline of industrial activities and foreign currency shortages resulting from Milei’s adjustment program and destruction of the state.

BRI Status

Bilateral relations between Argentina and China must be understood in the context of Latin America, since the countries of the region generally share similar economic processes rooted in a common historical-social matrix, although with differences due to their respective political evolution. China is already the first or second-largest destination for exports and origin of imports, investment, and loans for most countries in Latin America and the Caribbean (LAC) and, in the past decade and a half, various countries in the region have established ‘strategic partnerships’ of various kinds with China.

After the visit of President Alberto Fernández to Beijing in February 2022, and despite the objections of the US Government, Argentina joined the Belt and Road Initiative (BRI) (in contrast with Brazil, Mexico, and Colombia—the major economies in Latin America that have not yet done so). The agreement cleared the way for Argentina to receive 23.7 billion USD of financing for projects at the national and provincial levels in areas such as transportation, education, science and technology, agriculture, and hydroelectric and nuclear power.  Some pre-existing projects already approved and in execution (for example, the Belgrano Cargas railway and two dams in the province of Santa Cruz) would receive a new boost, while new projects (gas pipelines, power lines) would be added. The China–Argentine Joint Statement expressed the intention to promote the expansion and intensification of bilateral trade, to increase China’s financial support for its industrial exports to Argentina, and to promote the participation of Argentine supplier companies in Chinese infrastructure projects in the country. The document, however, did not propose any specific measure in these regards.

Along with Argentina joining the BRI, the 2020 currency swap agreement was renewed, thus promoting the greater use of national currencies in bilateral trade and investment. China also pledged to intercede with the International Monetary Fund (IMF) to facilitate Argentina’s access to the IMF’s Special Drawing Rights, which would enable the Argentine Government to access new external financing as the country’s reserves were depleting.

The agreements signed with China were finalised a few days after a pre-agreement (pending parliamentary approval) between the Argentine Government and the IMF regarding the repayment of a loan of 57 billion USD the IMF had granted to the previous conservative government of Mauricio Macri in 2018 (the largest in the entire history of the IMF)—a loan that at the time had Beijing’s endorsement. However, the funds received (846 billion USD) were not used for productive or social purposes: part of them was used to pay debt to foreign banks, while another part left the country in a ‘capital flight’, contributing to Argentina’s financial distress.

On a regional scale, Javier Milei’s government has in fact froze the trade and investment agreements and China–LAC cooperation institutions.  During her visit to China in April 2024, Foreign Minister Diana Mondino hinted that Argentina would take advantage of China’s interest in some infrastructure works—energy, bridges, roads—to be carried out under the framework of the BRI, but no concrete measures in that direction have been made public by Buenos Aires.

Current Economic Relations

Trade: China has been among Argentina’s top trading partners in recent years. Until 2008, the trade balance was in favour of Argentina. However, since then, the balance has reversed, with an average annual deficit close to 4.5 billion USD in the following decade (in 2023 the trade imbalance for Argentina reached 9,228 million USD). China is today Argentina’s main export market for agricultural products. In 2022, Argentina exported mainly soybeans, frozen beef and barley to China. Between 2017 and 2022, Argentine imports from China grew at an annual rate of 85.5%, mainly in mobile phones, spare parts for household appliances, radios, glyphosate, automatic data processing machines, and other industrial products.

Argentina is one of China’s major sources of beef imports. The rapid growth of meat exports to China since 2019 has raised the expectations of the Argentine ruling classes of a new boost in livestock exports, given the troubles of the local economy.

Today China’s presence is substantial across the entire production chain for soybeans, which are Argentina’s main exportable product, from the supply of seeds to the control of export ports. Added to this are the large investments in key export sectors (mainly agri-food items such as soybeans, barley, soybean oil, chicken, and beef), including the acquisition by the Chinese state-owned food processing giant COFCO Group of 100% of the local subsidiaries of Nidera and Noble Agri, making COFCO a leading firm in oilseed milling in Argentina. In 2018, the COFCO Group exported the highest volume of grains and derivatives among companies in Argentina.

Investment and Financing: Along with the intensification of trade relations between Argentina and China, Chinese investment increased markedly. The oil, mining, and infrastructure sectors see intense competition among Chinese, European, Russian, and US corporations, with the backing of their respective states. Today, China accounts for 50% of investments in the Argentine mining sector and for 40% of the shipments of lithium from the country.

Big Chinese state-owned and private corporations—including PowerChina, Gezhouba, China Railway Construction Corporation (CRCC), China National Nuclear Corporation, Ganfeng Lithium, Tianqi Lithium and Zijin Mining, among others—have investments or are involved as contractors in a wide range of activities: oil (through CNOOC and Sinopec); energy projects (the Atucha III nuclear power plant, with Chinese technology and capital); the Néstor Kirchner and Jorge Cepernic hydroelectric dams in southern Santa Cruz Province; a photovoltaic solar energy plant in Caucharí, Jujuy Province); aerospace activities (the Bajada del Agrio Space Observation Station in the Province of Neuquén); surface and underground railway projects; mining (the Veladero gold and silver mine; lithium and potassium mines in the provinces of Salta and Jujuy); and electronics assembly plants. China’s commercial and policy banks also play a decisive role in financing these activities.

However, Chinese investments do not always go smoothly. Following the swine flu outbreak in China in mid-2020, Argentine and Chinese authorities agreed to establish 25 mega-farms for pig production in Argentina (financed by China and for export to the Chinese market). It was a government-to-government agreement, but to be implemented by the private sector of both countries. However, the project was suspended due to controversies, including public health concerns on the implications of intensive pig production, and Argentina’s perceived growing industrial and financial dependence on China.

Similarly, having already suffered delays and suspensions by previous governments due to financing problems, the two Santa Cruz hydroelectric dams, as well as the Atucha III nuclear plant, were suspended by the Milei government. Several other public infrastructure projects—including the San Javier photovoltaic park in Misiones Province, a water purification plant in Laferrere (Buenos Aires Province), the Santa Fe-Córdoba interprovincial aqueduct—failed to secure financing despite signed commercial contracts, and it remains uncertain whether they will be realised. Agreements currently being suspended include the construction or improvement of major railways linked to the soybean export complex, such as the renovation of the Belgrano Cargas and San Martín Cargas railways, to facilitate access to the Pacific Ocean. The railway renovation projects involve not only financing from China, but also the import of Chinese-made locomotives, wagons, and even sleepers. This way, successive Argentine governments have been allocating substantial financial resources to the purchase of industrial and capital goods from China, instead of directing them to the rejuvenation of Argentina’s once advanced national railway industry. This approach has caused criticism and debates in Argentine’s political and academic circles.

Consecutive Argentine governments have requested currency swaps with China. The first, for 70 billion yuan, was agreed to in 2009 by the government of Cristina Fernández de Kirchner and expired in 2012 without having been activated. In 2014, the two central banks again signed a swap agreement for 70 billion yuan, also for three years. Activated on several occasions, this swap has been renewed thrice at the end of each of its three-year terms, in 2017, 2020, and 2023. After a 2018 agreement to expand the swap by 60 billion yuan, the total amount of the swap reached 130 billion yuan, equivalent to 19 billion USD, which represents more than two-thirds of Argentina’s gross reserves. As the currency swap agreements between both central banks were never made public, it is not clear what they entail, or if they include any political conditions.

Argentina has not only used the Chinese currency for imports of from China, but also to repay loans from the IMF and to intervene in the foreign exchange market. In October 2023, the Fernández government announced the activation of a major tranche of the currency swap for the equivalent of 6.5 billion USD, a value greater than the 5 billion USD originally planned. In light of President Milei’s anti-Chinese statements, it was uncertain whether China would renew the activated tranches after they expire. However, as soon as President Milei took office in December 2023, he sent a letter to President Xi Jinping to request the renewal. It was not until 11 June 2024, a few hours before the Argentine Congress voted on a decisive law for Milei’s neoliberal economic program, that Beijing granted the requested extension.

Here is a partial list of the most recent bilateral economic agreements:

Aid: Argentina is not a major recipient of aid. However, during the COVID-19 pandemic, Beijing donated and assisted with the assembly of modular hospitals. Argentina also purchased medical supplies and vaccines from China.

Key Controversies

Asymmetric Trade: Since 2008, bilateral trade has been asymmetric in terms of both trade balance and trade composition. Trade with China has reinforced Argentina’s specialisation in the production and export of primary goods—primarily, agri-food—and its dependence on imported industrial goods and foreign capital. While political and business leaders, as well as academics, have repeatedly called for trade diversification and value-adding to the exports to China, these recommendations are not heeded. Many of them have proposed to overcome these imbalances by attracting investment from China for the establishment of new industries (such as the installation of lithium battery factories) or big infrastructure projects. But so far these investments have not helped to stop the entry of massive amounts of Chinese industrial goods to the detriment of national production. Instead, they have consolidated Argentina’s old primary-export specialisation and the country’s tendency towards deindustrialisation.

Financial Dependence: The increasingly frequent appeals to Chinese financing—both to sustain Argentina’s foreign exchange reserves and to fund infrastructure construction projects, and even to pay foreign debt to the IMF, contribute to a dependent economic structure. The currency swap in renminbi with the Chinese central bank constitutes a substantial proportion of Argentina’s monetary reserves. This is significant given the renminbi is not yet a freely convertible currency and renminbi assets can only be used to pay for imports from China, to remit profits from Chinese companies, to finance Chinese projects, or to pay debt to China.

Strategic Conflict between the United States and China, and Hindrance of Latin American Integration: The willingness of the Fernández government to join the BRI coincided with the ruling classes from other Latin American countries’ reconfiguration of their international engagements, as they associate their development strategies with China—the rising power that provides them with a market, industrial goods, investment, and financing. The gradual adaptation of national economic policies to the priorities of the Chinese partner could lead to a strategic alignment of Latin American countries with China in a possible conflict with the United States, in a region viewed by Washington as its strategic ‘backyard’. However, the presence of powerful interests linked to the great powers in Latin American countries accentuates the divergent orientations of the governments in the region and hinders the long-delayed integration of Latin America.

Key Sources

Media:

There are very few English-language media outlets in Argentina, and the few that exist are foreign and not objective. Among Spanish-language print media, several are strongly anti-Chinese (for instance, InfoBAE, and the newspapers Clarín and La Nación), while others are very vocal in favour of the strategic partnership with China (Página12). On issues of bilateral relations with China, LaPoliticaOnline, China en America Latina, and En Cont@cto China by the Cámara de Exportadores de la República Argentina provide some good online resources.

Books, Reports, and Scholarly Articles:

Laufer, Rubén. 2017. ‘Argentina y su asociación estratégica con China en la era Kirchner [Argentina and its Strategic Partnership with China in the Kirchner Era].’ Jiexi Zhongguo: Análisis y pensamiento iberoamericano sobre China (22). Link.

Laufer, Rubén. 2019. La asociación estratégica Argentina–China y la política de Beijing hacia América Latina [The Strategic Partnership between Argentina and China and Beijing’s Policy towards Latin America]. Centro de Estudios Latinoamericanos, Universidad Nacional de San Martín. Link.

Laufer, Rubén. 2024. ‘América Latina y China: asociación estratégica y desarrollo desigual’ [Latin America and China: strategic partnership and unequal development].’ In China en América Latina y el Caribe. ¿nuevas rutas para una vieja dependencia? El nuevo ‘tercer mundo’ y la perspectiva del ‘desarrollo’ [China in Latin America and the Caribbean. New Routes for an Old Dependency? The New ‘Third World’ and the ‘Development’ Perspective], edited by Fernando Romero Wimer and Rubén Laufer,pp. 127–62. Curitiba: Appris Editora.

Mangione, Germán. 2021. ‘China: relación complementaria o subordinación y dependencia [China: Complementary Relationship or Subordination and Dependency]?’ Agencia Tierra Viva, 26 Marc. Link.  

Oviedo, Eduardo Daniel. 2000. La política exterior argentina hacia China (1945–1999) [Argentina’s Foreign Policy towards China (1945–1999)]. Universidad Nacional de Rosario. Link.  

Romero Wimer, Fernando G. and Paula Fernández Hellmund. 2016. Los capitales chinos, el agro argentino y algo más [Chinese Capital, Argentine Agriculture, and Something Else]. Universidad de Buenos Aires, Facultad de Cs. Económicas, Biblioteca Digital. Link. Svampa, Maristella. 2020. ‘Argentina será la nueva fábrica de cerdos para china [Will Argentina be China’s New Pig Factory]?’ Observatorio Plurinacional de Aguas (OPLAS), 31 July. Link.