China-Argentina cooperation under the framework of the BRI
The container ship of China COSCO Shipping Group leaves Buenos Aires Port in Buenos Aires, Argentina On February 3, 2022. /CFP
The container ship of China COSCO Shipping Group leaves Buenos Aires Port in Buenos Aires, Argentina On February 3, 2022. /CFP

The container ship of China COSCO Shipping Group leaves Buenos Aires Port in Buenos Aires, Argentina On February 3, 2022. /CFP

Editor's Note: Alba Tang, a researcher on Latin American Affairs of Institute of American & Oceanian studies, CAITEC-MOFCOM. The article reflects the author's opinions and not necessarily the views of CGTN.

The Belt and Road Initiative (BRI) has helped link Asia's vast infrastructure and cooperation network to the rest of the world. Facing a complex international environment with volatile energy and food markets, disrupted supply chains, and fragile economic recovery hampered by the negative ongoing effects of the Covid-19 pandemic, participants in the BRI have been able to find new opportunities for cooperation. For China, as a major contributor to the global economic recovery, and Argentina, as the third largest economy in Latin America and one of China's most important trading partners in the region, the economic and trade cooperation is of deep significance.

In February 2022, China and Argentina formally signed a memorandum of understanding on Jointly Promoting the Construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road. Since then, the BRI in Latin America has been expanded to include 21 countries. With this as a new starting point, China and Argentina have engaged in fruitful activities in policy communication, facility connection, trade flows, capital integration, and cultural communication. Many Argentine dignitaries have said that participation in the BRI is important to Argentina as it will bring much richer, broader and deeper cooperation opportunities to both countries. In 2023, the two countries signed the Cooperation Plan on Jointly Promoting the Construction of One Belt and One Road, which provides a general design and outlook for strategic docking and cooperation in infrastructure, finance, trade, energy, and other sub-sectors. The signing of these documents will effectively shape the economic and trade outlook between the two countries.

In terms of closer policy communication and international collaboration, China and Argentina jointly safeguard the multilateral trading system with the World Trade Organization (WTO) at its core, and strengthen the coordination of positions on economic and trade issues related to the multilateral trading system for achieving sustainable development, epidemic response, digital trade and global value chains, sustainable investment, and Industry 4.0 under the G20 framework. Argentina supports the International Cooperation Initiative on Resilience and Stability of Industrial Supply Chains launched by China. In addition, in the context of the BRI, China and Argentina also have a wide scope for cooperation in the field of third-party market cooperation.

The investment sector has made steady progress. Infrastructure investment, including new areas such as the digital economy and smart cities, will remain the main direction of investment cooperation between the two sides as traditional investment areas. The government and enterprises of the Argentine side have been actively attracting Chinese production-oriented investment that is helping to enhance Argentina's domestic export capacity, while Chinese enterprises have remained active in contracting and investing in major projects in the fields of transportation, infrastructure, energy, power and communications in Argentina, creating a large number of jobs and contributing to the economic and social stability of Argentina and the globalization of the industrial chain. On the banks of the Santa Cruz River in Argentina, China and Argentina are jointly constructing the southernmost hydroelectric power plant in the world, the Quisé hydroelectric power plant. After the completion of the plant, the average annual power generation capacity will reach 4.95 billion kilowatt hours, which is expected to save Argentina nearly $1.1 billion in oil and gas import expenses every year. In addition, the two sides will focus on energy cooperation to optimize energy transformation and green development as the new demands of economic globalization, the photovoltaic industry, lithium applications and other new energy tracks attract Chinese enterprises, and will further promote investment and cooperation between the two countries and the integration of their industrial supply chains.

The trade structure continues to be optimized. Argentina is an important source of China's imports and also an important export market, while China holds the position of Argentina's second largest trading partner and largest agricultural export market. Soybeans are the main agricultural products exported from Argentina to China, and Argentine beef and other high-quality agricultural products are popular with Chinese consumers. As China continues to expand its opening to the outside world and liberalize market access, 13 agricultural trade agreements have been signed between the two countries in the past five years. Argentine cherries, pears, apples, meat, honey, dried fruits, blueberries and pork can now be found on the tables of Chinese people and new products for export are under discussion. As such the bilateral trade structure is becoming richer and more optimized. In April, the Argentine government announced the official use of RMB to settle the trade of goods imported from China, which will have a positive impact on future trade between the two countries.

Financial cooperation has deepened. Argentina has a long-term local currency swap agreement with China, and financial cooperation with China is at the forefront of the Latin American region. The two countries have been enhancing financial cooperation through currency swap agreements, allowing China to finance and invest in areas such as transportation, nuclear energy, hydropower, photovoltaic, wind energy, oil and gas, renewable energy and telecommunications, building an important policy financing and financial service platform for investment by enterprises of both countries. In addition, Argentina has joined the Asian Development Bank agreement, and cooperation between China and Argentina in the insurance and securities industries will soon be possible. In 2022, Argentina announced the opening of RMB settlement, which greatly reduces foreign exchange settlement risks, lowers transaction costs and improves trade efficiency.

In general, China's rapid development and diversification of domestic consumption, the growing understanding between the two countries and their expanding economic complementarities are the dynamics behind many of the brightest cooperation achievements and the continuous promotion of quality and upgrading of bilateral relations. There is still great potential for cooperation between the two countries in the fields of food, minerals, renewable energy and infrastructure. Argentina is currently facing fiscal deficit, inflation, poor economic recovery and debt pressure. It has applied to join the BRICS mechanism in order to obtain new sources of investment and the nation keeps trying to diversify its trade and cooperation with China in order to increase exports and open up an effective path for trade and investment recovery.

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