Argentina’s President Mauricio Macri signed nearly 30 new deals with China in the last two days since the Group 20 Summit (G20) ended on Dec. 1, among them a currency swap — 60 billion yuan for about 319.8 billion Argentine pesos (approx. US$8.6 billion). This is the second currency swap Macri has agreed to with Chinese President Xi Jinping, the first one being in July 2017.
"This new agreement will help promote greater financial stability and strengthen the relationship between both central banks. It will also facilitate commercial exchange between both countries,” said an Argentine central bank spokesperson.
For Argentina, the move will act as a no-interest loan for its failing economy which contracted by 5.8 percent between May 2017 and May of this year. For the past two years, Macri has been relying on austerity measures, outside investors, and the International Monetary Fund (IMF) to prop up its peso which fell another five percent in value during the month of November ending at 37.6 to the U.S. dollar.
The swap enables China to strengthen its currency within the world market which is currently dominated by the dollar.
The United States administration under President Donald Trump has been trying to maintain its economic and political grip on the region, sending several officials to Central and South American nations over the past year. However, the president’s poor reputation abroad and faltering U.S. power, along with Chinese investments in Latin America totaling some US$23 billion over the past year alone, including Xi’s establishment of the Belt and Road Initiative in the region, the Asian country is increasingly making its presence felt across the continent.
Macri and Xi also signed conventions to promote trade, especially agricultural, between their two nations and to cooperate on building energy and transportation infrastructure to support trade. The two presidents also agreed to strengthen cultural and educational agreements.
Xi said that he and Macri have created a record number of bilateral ties and that China-Argentina relations are witnessing unprecedented breadth and depth.
"We are complementary countries. There are few countries in the world that can buy so many of the quality products that we make," Macri said in the joint press statement he made with Xi Jinping.
"We want to continue working side by side, betting that this friendship will bring an improvement in the quality of life of our people," Macri said. He will hold his first press conference Monday morning since the highly-protested meetings and G-20 summit ended.
Also, while in Buenos Aires, Trump agreed not to boost tariffs on US$200 billion of Chinese goods on Jan. 1 as he initially threatened. In exchange China will buy a "very substantial" amount of agricultural, industrial and energy products, the U.S. says.