Sergio Massa announced the possibility of making Chinese investments in Argentina through the yuan, instead of the complex operations in dollars carried out in the secondary market in Shanghai. This measure strengthens Beijing’s strategic importance in Latin America, and this political decision in the future could turn the Chinese state into Argentina’s main trading partner.
“With the aim of accelerating commercial relations and eliminating arbitrage, the opening of direct commercial exchange between the two countries through the yuan has been established,” said the economy minister during the launch of the Argentine Chamber of Commerce in China.
Most Chinese companies had to go through a complex maze to crown their investments in Argentina through the use of the dollar. And this financial hardship has kept the impact from slowing down in the country – and consequently in the region.
Massa’s announcement could tip the balance in favor of China and its influence in the Southern Cone. If there are no geopolitical barriers, China could become Argentina’s main trading partner, displacing Brazil from its historical hegemony.
Until now, most Chinese investments were made through cash with liquidity (CCL) or had to buy dollars to enter through the Single Free Exchange Market (MULC). The economy minister said that from now on investments can be made directly in yuan.
Massa is aware of the global confrontation between the United States and China, but maintains among his advisers that Argentina “should be wise” to take advantage of global situations without implying alignment with any one side in the conflict. The Minister of Economy explains that the decision to invest in the yuan is nothing more than a movement aimed at consolidating reserves and improving trade.
Following the announcement at the Argentine Chamber of Commerce in China, Massa met with representatives of Ganfeng Lithium Company, the world’s leading producer of lithium and derivatives. Massa heard from this company that they plan to invest about $2,700 million to consolidate their production of 74,000 tons of lithium carbonate.
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Source: Infobay (Roman Lejtmann)
