China freezes US$6.5 billion in credit to Argentina, says newspaper

China froze US$6.5 billion in credit granted to Argentina through the swap Chinese exchange rate, reported the Argentine newspaper Page 12 on Tuesday (Dec 19, 2023). According to the vehicle, sending the appeal will be suspended until Argentine president, Javier Milei, shows concrete signs of rapprochement with Beijing.

The Asian nation’s Central Bank made the resource available in October after the Argentine president at the time, Alberto Fernández, met with Xi Jinping. O Page 12 states that, in the negotiation, a political relationship clause between the countries was established. China also demands that Argentina have a “programmatic agreement” with the IMF (International Monetary Fund).

The exchange rate agreement with China is important for Argentina because it helps the South American country pay its debts. The Argentine government used the swap exchange rate to pay off, in November, part of the debt to the IMF in the amount of US$ 2.6 billion. It is also a strategy that Argentines have to increase their reserves, as the president will have a low stock of international reserves.

Milei is trying to quickly rebuild ties with the Asian nation. The relationship between the countries was shaken after the Argentine president made statements stating that Argentina would not “business with communists” in your government.

The first gestures of rapprochement were made after the election of the Argentine leader. On that occasion, the president of China sent a letter to Milei congratulating him on his victory. The libertarian thanked him.

On December 11, Milei and Foreign Minister Diana Mondino met with Wu Weihua, Xi Jinping’s envoy for the Argentine leader’s inauguration and vice-president of the Permanent Council of the National People’s Congress of China. The following day (December 12), the libertarian sent a letter to the Chinese leader asking for Xi’s support to accelerate the process of renewing the swap exchange rate.

China did not deny the possibility, but expects clarity regarding Argentina’s positions. One of the Chinese demands is the appointment of an Argentine ambassador to the Asian nation.

Currently, Argentina’s representation in China is being carried out by secretary Marcela Barone. She took office after the resignation of Ambassador Sabino Vaca Narvaja. The lack of an official successor is viewed negatively by Beijing.

According to the Infobae, Beijing will also only unfreeze the credit if Milei meets Xi Jinping on an official visit to China or on another occasion. The libertarian was invited to go to the Asian country during the meeting with Wu Weihua.

China also wants the South American country to buy Chinese JF-17 fighters. This Chinese demand was boosted after the Argentine Ministry of Defense resumed negotiations for the purchase of F-16 fighters. The vehicles are American-made and operated by Denmark.

According to Page 12, China’s ambassador to Argentina, Wang Wei, was summoned to return to China to present a report on possible scenarios for economic relations with Argentina while the country is under Milei’s government.