With soy and lithium trade in the balance, Argentina's Milei has a China conundrum

2 months ago 46

BUENOS AIRES/BEIJING - Argentina's President-elect Javier Milei has a China conundrum.

The libertarian economist insulted communist-run China in a fiery campaign, but takes office on Sunday needing the country's second-largest trade partner more than ever as a recession looms and foreign currency reserves run dry.

Since he won the Nov. 19 election, Milei's team have taken a more diplomatic tone, reflecting complex ties with China, the top buyer of Argentine soybeans and beef, a key investor in its lithium, and the provider of an $18 billion currency swap - effectively, a form of credit provision that has helped Argentina avoid default.

Miguel Schiariti, president of the local CICCRA meat industry chamber, is hopeful of a "cordial" relationship, pointing to recent comments by incoming foreign minister Diana Mondino. China buys over three-quarters of Argentina's beef exports.

Mondino told Reuters in a Dec. 2 interview that the new government would review "secret" state-to-state deals to ensure they were all above-board, but emphasized Argentina would not cut ties with China, and would look in fact to bolster private trade.

"The private sector is the one that makes the deals," she said, adding that Argentina wanted to "export as much as possible to everyone." The new government will be keen to overturn trade deficits, she said, including with China - around $10 billion last year.

"We have a lot of debt... so we need a positive surplus."

'PROJECTS WILL BE REVIEWED'

Not everyone is convinced that things will be so easy, with sensitive mega-projects including hydroelectric and nuclear needing solid state-to-state relations.

In the southern province of Santa Cruz, Chinese-made turbines are set to arrive early next year for a $5 billion hydropower dam project, which the outgoing Peronist regional governor Alicia Kirchner said could be held up by the change in government.

"Those dams are at risk with Milei," Kirchner said in an October interview, citing his public criticism of China during the campaign.

"(Milei) says we can be an island," Kirchner said. "I don't think the country has a future that way."

Milei's campaign has not spoken specifically about the dams.

China is providing financing for around a dozen ongoing infrastructure projects in Argentina, government data show, which range from railways and solar farms to space stations and ...

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