China woos an Argentina neglected by American indifference
China's offer of financial support to Argentina, in the form of a $4 billion currency swap signed today, is the latest example of the Asian nation filling a vacuum in what has traditionally been the "backyard" of the U.S.
While President Donald Trump has not paid a visit to Latin America since taking office, China has stepped up its financial assistance to Argentina and worked to strengthen trade ties.
The two sides agreed today to expand the 70 billion yuan ($10.3 billion) currency swap agreement signed in 2014 by former President Cristina Fernández de Kirchner after a New York judge blocked Argentina's bondholders from collecting payments to pressure the country to pay vulture fund holdouts a 1600% return.
Kirchner's right-wing successor, Mauricio Macri, had condemned the swap, and after taking office in late 2015, suggested that Argentina would distance itself from China.
He then had construction of two hydroelectric power plants and two nuclear power plants cancelled in 2016 - a $20 billion investment 85% financed by China.
But after doubling the nation's current account deficit to $31 billion annually, and its public foreign debt to nearly $200 billion, Macri is finding it harder to turn down offers from the Asian economic power.
The 2014 currency swap was renewed for three years in 2017, and amid over $20 billion in capital flight so far this year - triggered by growing default fears among investors - it's widely believed that China itself proposed the $4 billion expansion.
Argentina's foreign exchange reserves have declined as the Central Bank sells dollars to prop up the peso - which nevertheless fell from 20 to the dollar as recently as April, to 30 currently.
Current reserves of $54 billion include $4 billion borrowed in May from lenders of last resort such as the Bank for International Settlements and the vulture fund BlackRock, as well as $15 billion from the IMF on July 22 - a loan conditioned on severe budget cuts.
China is already Argentina's second-largest trading partner. But the record $7.7 billion deficit with China made up 90% of its merchandise trade deficit last year. The currency swaps have helped finance this shortfall.
China also appears interested on including Argentina in its Belt and Road infrastructure initiative - as well as forging a free trade agreement with the Mercosur trade bloc that also includes Brazil.
At: https://asia.nikkei.com/Politics/International-Relations/China-woos-an-Argentina-neglected-by-American-indifference
After you: Once given to cancelling Chinese infrastructure projects in Argentina by high-handed decrees, Mauricio Macri has recently sought closer ties with China's Xi Jinping after his own deregulatory policies plunged the country into its most severe crisis since 2002.
= new reply since forum marked as read
A lot of it, I suspect, has to do with all the Coldwarniks, Kissingerites, crass profiteers, and other dinosaurs squatting on our foreign policy and intelligence bodies.
They push us away from the rest of the world not only directly - but indirectly, by promoting the rise of authoritarian right-wing kleptomaniacs like Macri in their respective countries.
These people - especially the Cuban exile types in the State Dept. - do immense damage to our interests.
Macri's leaving Argentina a crisis similar (but perhaps less severe) to the one the last dictatorship left in 1983: a massive foreign debt bubble, and industrial sector devastated by both imports and recession (double whammy), and a budget burdened by debt payments - with deep cuts to pensions, public works, and other domestic needs.
This, of course, is his doing, not the U.S.'s - but it's our well-known support for Macri both before and during his presidency that damages our standing not only in Argentina; but in internationally, since thse ties are not lost on anyone else.
Thanks for reading, CuiBono, and for your insights. 
Hope you're having a wonderful summer. 
