Who can say no to China?
Since the rise to power of Donald Trump, and a possible protectionist and isolationist agenda taking hold in the United States, China and its leader Xi Jinping has stepped forward as a defender of free trade and globalization. But how will China, the engine of the global economy, flex its newfound position in international affairs?
In a long-form reported analysis for Foreign Policy, senior researcher Luke Patey examines how China, a one-party state, is reacting to democratic political change threatening its economic interests in Argentina.
Over the past decade China has become a leading trading parter and investor in Argentina. China Inc. has bought up large stakes in Argentina’s energy, mining, and banking sectors. And in 2014, taking its engagement a great leap forward, China agreed to provide Argentina with over $20 billion in loans to finance and build numerous infrastructure projects, including new railway lines and hydropower dams.
But the rush of Chinese investment and finance into Argentina has produced new tensions in the relationship. After Mauricio Macri was elected president in a runoff vote in late 2015, he took Argentina’s economic and foreign policy in a new direction from his long-serving predecessor Cristina Fernandez de Kirchner. Macri also threatened to review and possibly cancel billions of dollars in Chinese loan-for-infrastructure agreements.
Visiting Argentina last year, Patey sat down with leading diplomats and businessmento explore whether it was possible for Macri to say no to China. While Beijing showed signs of being a negotiable power, accommodating some of the wishes of the new leader, it nonetheless ensured the bottom-line of the loan agreements did not change.
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