What do Argentina’s elections mean for relations with China?

Argentina will head to the polls this week to decide its next president in one of its closest ever election races, with voters faced with two hugely differing visions for the country’s future at home and abroad.

Sunday’s second-round runoff will pit Sergio Massa, currently economy minister for the ruling centre-left coalition, against radical libertarian Javier Milei, who surprised analysts when he gained the largest share of votes in the country’s August primaries – and whose extreme positions and proposals have made headlines around the world.

Most polls have indicated an almost inseparably tight race since an indecisive first round vote on 22 October triggered the runoff. Massa secured nearly 37% of votes to Milei’s 30%, while the third-placed candidate, the conservative Patricia Bullrich, has since endorsed the campaign of Milei and his party, La Libertad Avanza (Liberty Advances).

The election comes as Argentina faces ongoing economic struggles, and a deepening crisis that appears to have left its population increasingly weary of the political establishment, which many point to as fuelling the rise of Milei. Billion-dollar foreign debt is straining government finances, 40% of the country’s 46 million people are reportedly living in poverty, and year-on-year inflation is nearing 140% – a rise that has occurred on the watch of Massa and the governing Unión por la Patria (Union for the Homeland).

The results of Sunday’s election may not only change Argentina’s domestic policies but also its foreign outlook, campaign pledges from both candidates suggest. Notably, Milei has said he will not maintain political ties with China or any “communist” country, limiting relations to the private sector, while Massa sees China continuing to be a key partner.

Argentina has significantly deepened relations with China since the government of former president Cristina Fernández de Kirchner (2007–2015). The current administration of Alberto Fernández has maintained this closeness since taking office in 2019, finding in China an ally during the Covid-19 pandemic and the country’s economic crisis, and overseeing Argentina’s joining the Belt and Road Initiative (BRI), China’s flagship global infrastructure development programme.

China is also now Argentina’s second-largest trade partner after Brazil. Argentina’s agribusiness sector plays a leading role in this relationship, with 92% of the country’s exports of soybeans and 57% of its meat shipments sent to China last year. China has also made notable investments in the country’s energy sector and its growing lithium industry.

Massa and Milei on foreign policy

During his campaign, Massa has signalled that he will look for continuity with the current administration on China policy. “It is one of our most important trading partners, the second [largest]. We aspire to consolidate this flow of trade,” the economy minister told reporters after the first round of the elections. More broadly, Gustavo Martínez Pandiani, an adviser to Massa, has said his government would have a “pragmatic” foreign policy.

Argentina currently has a US$18 billion currency swap line with China, which it has tapped during Massa’s term as economy minister to help pay back part of its debt to the International Monetary Fund (IMF). In August, Argentina was invited to join Brazil, Russia, India, China and South Africa as a full member of the BRICS group of emerging economies, partly thanks to the support from China.

In the lead-up to the election, Sabino Vaca Narvaja, Argentina’s ambassador to China, said breaking ties with China would lead to the loss of “millions of jobs” and a “triple productive, social and financial implosion”. He highlighted the many infrastructure projects funded by Chinese banks in Argentina, such as two hydropower dams in Patagonia, and said these initiatives could be suspended any break in the countries’ ties.

Milei has indicated that, if elected, he would look to break off relations with China due to its ruling by the Communist Party, labelling the country an “assassin” and claiming that its citizens are not “free”. He has also promised to pull Argentina out of Mercosur, the trading bloc of South American nations, and has described Brazil’s President Luiz Inácio Lula da Silva as a “socialist with a totalitarian vocation”.

However, Diana Mondino, likely to be Milei’s foreign minister, said his statements have been blown out of context and that their potential government would seek open and transparent relations with all countries. Milei would only stop “secret” state-to-state agreements, Mondino said, referring to Argentina’s currency swap with China. “We don’t know the interest rate we’ll have to pay,” she said.

Wang Wenbin, a spokesperson for China’s foreign ministry, responded to Milei’s statements by inviting him to visit China. “I believe that if Mr Milei can come to China and see the country for himself, he will find a totally different answer to the question of whether or not Chinese people are free and China is safe,” Wang said in an August press conference.

At the final presidential debate between the candidates, held on 12 November, Massa sought to remind Milei of the importance of China for the national economy, as it accounts for a large share of many Argentine provinces’ exports. Milei replied by claiming Argentina could simply find other trade partners, and dismissed Massa’s statements that jobs would be affected by changes in the relationship with China.

The future of the relationship

Foreign policy experts told Diálogo Chino that while the relationship with China might change if Milei is elected, ties are not likely to be fully broken. Several recalled that former president Mauricio Macri (2015-2019) had also questioned the relationship with China, but that the two countries continued to engage with each other throughout his administration.

“China will engage with Argentina in whatever form possible, regardless of the outcome of the presidential election,” said Margaret Myers, director of the Asia and Latin America programme at the Inter-American Dialogue. “That said, a Milei win would no doubt result in a rethinking of relations with China, and possibly even a review of existing projects.”

Myers pointed to the two dams in Patagonia, currently under construction and subject to cross-default clauses, meaning that their cancellation would lead to the cancellation of other China-financed projects. Argentina is also negotiating the construction of a new nuclear plant with China, which could be put on hold if Milei is elected.

Aerial view of construction of the Chinese-backed Jorge Cepernic hydroelectric power plant in Santa Cruz province, Argentina. Some commentators fear that, if elected president, Milei will not continue with the project. (Image: Alamy)

Jorge Malena, director of the Asian affairs committee of the Argentine Council for International Relations (CARI), said that while Massa would deepen the relationship with China due to the “financial and political dependency,” Milei would have to moderate his stance due to the role that China has as a key trade partner and investor in Argentina.

Ignacio Villagran, director of the Argentina-China Studies Centre (ACSC) at the University of Buenos Aires, agrees: “For China, it doesn’t make a difference who is in power as long as the investment projects continue. While there’s a question mark on Milei, he won’t have a say on what the provinces agree with China.”

Argentina’s federal structure means its provinces can engage with China independently from the national government. This has been the case of the northern province of Jujuy, for example, with the province hosting Cauchari, a 300 MW solar plant financed by Chinese banks, as well as a lithium extraction plant partly owned by Chinese mining firm Ganfeng Lithium.

“Despite Milei’s statements, it is unlikely that the Argentine-Chinese relationship will worsen significantly or permanently, as it is based on a growing economic relationship in terms of trade, investment and, most recently, the extension of the [currency] swap,” said Pepe Zhang, senior fellow at the Atlantic Council’s Adrienne Arsht Latin America Center.

Guo Cunhai, coordinator of the Centre for China and Latin America Studies (CECLA) at the Chinese Academy of Social Sciences, said that the relationship between China and Argentina has withstood complex situations before and will likely continue to do so. “The basis of the relationship is mutual need. Cooperation will benefit both sides and division will harm both,” he added.

Whichever candidate wins this Sunday’s second-round runoff will assume the presidency on 10 December, two days before the end of COP28, the United Nations’ upcoming climate change conference.

Marina Bello contributed additional reporting for this story.