China interrupts a financing agreement with Argentina for 6.5 billion dollars
China has reportedly suspended a currency swap deal with Argentina worth $6.5 billion and the blockade will remain in place until President Javier Milei demonstrates a clear intention to engage with Beijing, according to reports. from SCMP, The agreement, additional to a previous one, was defined by the losing candidate Massa last summer .
The news of the move comes just 10 days into the mandate of the new president, who had stated during the election campaign that contacts with China were dangerous, and underlines the challenge that Milei will have to face in trying to follow up on these promises. When asked for comment, Zhicheng Xie, spokesperson for the Chinese embassy in Argentina, declined to confirm the news.
In Beijing, Chinese Foreign Ministry spokesman Wang Wenbin also refused to confirm or deny the reports reported Wednesday, merely saying that China remains committed "to cooperation with Argentina on the basis of equality and mutual benefit."
The financing is part of an agreement renewed annually since 2009, crucial for Buenos Aires due to its negative international dollar reserves. Argentina has relied on these swaps as one of its few credit options, given the South American nation's reputation for defaulting on international debt.
The funds therefore also allowed an increase in trade between Argentina and China and were even increased last summer.
Massa was also running for president at the time and lost to Milei, whose campaign included significant anti-China rhetoric. Nonetheless, after taking office on December 10, Milei contacted Chinese President Xi Jinping and asked for the continuation of these agreements, Page 12 , an Argentine newspaper, reported.
Two days later, Argentine Foreign Minister Diana Mondino met Wu Weihua, Xi's special envoy for the inauguration, and urged a quick renewal of the agreement.
According to Infobae , an Argentine news website, China's decision follows Argentina's purchase of used F-16 fighter jets from Denmark. The planes were originally produced in the United States. Confirmation of the deal was not officially announced, but Infobae reported that Luis Petri, Argentine Defense Minister, met on Monday with Xavier Julian Isaac, Brigadier General of the Argentine Air Force, to confirm Milei's intention to acquire the F-16s instead of the Sino-Pakistani JF-17 Thunde r fighter. This prospect, apparently, did not please Washington, which is trying to limit Beijing's influence in South America. The United States not only approved the sale of the F-16s to Argentina, but also committed to providing weapons, training, logistical support and spare parts for the jets.
JF 17
The news site said China's ambassador to Argentina, Wang Wei, was recalled to Beijing to discuss Milei's plans and approach to projects that Xi has prioritized.
Patricio Giusto of the Sino-Argentine Observatory in Buenos Aires called China's freezing of funds worrying. Without the financial cushion provided by the $6.5 billion, Giusto noted, Argentina would have to renegotiate its debt to the IMF, requiring it to seek alternative financing sources, a task Giusto deemed “not at all easy.”
Milei also signaled his desire not to continue with the request for access to the BRICS agreement with China and Russia.
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The article China interrupts a financing agreement for Argentina for 6.5 billion dollars comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-cina-interrompe-un-accordo-di-finanziamento-dellargentina-per-65-miliardi-di-dollari/ on Thu, 21 Dec 2023 10:00:38 +0000.