global@hmeonline.com
Mon to Fri 09:00 – 17:30
Since the “Belt and Road” initiative was launched in 2013, it has gradually entered the Latin American region. In January 2018, the second ministerial meeting of the China-Latin America Forum adopted the "Special Statement on the Belt and Road Initiative" and other important outcome documents, agreeing that "The Belt and Road Initiative proposed by the Chinese government will strengthen development cooperation among relevant countries. "Provide important opportunities", and pointed out that the priority areas of China-Latin America cooperation include the docking of the "Belt and Road" initiative. This shows that the “Belt and Road Initiative” has begun to enter the Latin American region in an all-round way. Consistent with this, and adapting to the unique national conditions of Argentina, China-Argentine joint construction of the "Belt and Road" is also steadily advancing, catering to the common development needs of both sides, and pushing bilateral cooperation into a new stage of high-quality development.
As the international recognition of the “Belt and Road” initiative continues to increase, international cooperation in the joint construction of the “Belt and Road” initiative has developed rapidly. As of the end of August 2021, China has signed more than 200 cooperation documents for the joint construction of the “Belt and Road” with 172 countries and international organizations, covering Asia, Africa, Europe, Latin America and the South Pacific. In the same period, among the 24 countries with diplomatic relations in Latin America, China has signed 19 cooperation documents for the joint construction of the “Belt and Road”. Latin America has become an indispensable and important participant and co-constructor of China's “Belt and Road” international cooperation.
As a global initiative, China's external "Belt and Road" cooperation focuses on the universal needs of world development, and it also focuses on the different development needs of various countries and regions. The “Belt and Road Initiative” jointly built by China and Latin America has been recognized at the regional level within the Community of Latin American and Caribbean States. At the bilateral level, it has developed in three forms: one is the signing of cooperation documents for the joint construction of the “Belt and Road”; the other is official participation in the “Belt and Road”. “One Road” International Cooperation Summit Forum, join the Asian Infrastructure Bank and the “Belt and Road” related cooperation mechanism, or clarify the cooperation intention in official documents; third, realize the project docking or planning docking under the “Belt and Road” spirit.
China and Argentina have not yet signed the "Belt and Road" cooperation document, but the two sides have reached a high degree of political consensus on joint construction and cooperation. In 2018, during President Xi Jinping’s state visit to Argentina, China and Argentina issued the "Joint Statement on the Establishment of a Comprehensive Strategic Partnership between the People’s Republic of China and the Republic of Argentina", which clearly stated that "The Belt and Road Initiative will inject impetus into China-Argentine cooperation." , China-Arab comprehensive strategic partnership can be extended to the "Belt and Road Initiative". In January 2021, President Xi Jinping stated in a correspondence with Argentine President Alberto Fernandez that “China is willing to work with Argentina to promote high-quality “Belt and Road” cooperation and promote the building of a community with a common future for mankind. . The “Belt and Road” consensus formed by China and Arab countries has promoted the deepening of pragmatic cooperation between the two sides and formed many early achievements in the field of “five links”.
One is the policy communication level. The head of state of Argentina attended the two “Belt and Road” International Cooperation Summit Forums. Argentina is a signatory of the “Belt and Road” Financing Guidelines. China and Argentina decided to jointly build the “Belt and Road” framework. Strengthen communication and cooperation to connect the development plans of the two countries.
The second is the level of financing. Argentina is a founding member of the Asian Infrastructure Investment Bank, and the Argentine Investment and Foreign Trade Bank, as a founding member bank, has joined the "China-Latin America Development Financial Cooperation Mechanism."
Thirdly, at the level of unimpeded trade and facility connectivity, Argentina's trade, investment, financial and economic cooperation with China is in a relatively leading position in Latin America. In the field of trade, China has become Argentina's second largest trading partner. In 2020, China accounted for 9.8% of Argentina's total exports (54.884 billion U.S. dollars) and 20.4% (42.356 billion U.S. dollars) of its total imports. In China's imports, meat from Argentina accounted for 12.1%, soybeans accounted for 7.5%, seafood and shellfish, animal fats, beverages, leather and other products accounted for more than 2%. Argentina plays an important role in China's food and raw material supply and leather manufacturing, and is of great significance to the stability of the supply chain and production chain of related industries. In the field of investment, China is one of the main sources of foreign capital in Argentina. As of the end of 2019, the stock of Chinese investment in Argentina reached 1.8 billion U.S. dollars, involving multiple sectors such as agriculture, energy, and manufacturing. In the field of financial cooperation, China and Arab countries have signed five currency swap agreements.
In August 2020, the scale of the latest phase of the agreement reached 130 billion yuan. During the same period, Argentina’s renminbi reserves accounted for about 43% of its foreign exchange reserves. The country has become an important cooperation target for the internationalization of the renminbi. In the field of economic cooperation, Chinese companies have participated in a number of infrastructure and energy projects in Argentina. For example, China National Machinery and Equipment Engineering Co., Ltd. signed a general contracting contract for the reconstruction project of the Belarusian railway. And carriages and other equipment; China Power Construction Group Co., Ltd. ("China Power Construction") and Shanghai Electric Power Construction Co., Ltd. jointly undertook the construction of Argentina's largest photovoltaic project-the 300 MW photovoltaic power generation project in Argentina, and has now entered commercial operation The first and third phases of the Rome Blanca project of the Helios Wind Power Project Group, the largest wind power project group in Argentina, invested by China Goldwind Technology and Power China, have been integrated into the national grid system of Argentina and officially put into commercial operation; Gezhouba The group is in charge of the construction of two hydropower stations in the Santa Cruz province of southern Argentina.
The fourth is the level of people-to-people connections. China and Argentina have jointly recorded documentaries such as "Charming China", "Charming Azhong" and "Leapfrogging". Argentina also broadcasted the "Glorious 70 Years·China TV Month" series on the 70th anniversary of the founding of New China. , Deepening the mutual understanding of the people of the two countries, and promoting the communication between the two peoples.
The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China proposed to accelerate the construction of a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles mutually promoting each other. To connect the pressure relief of the new round of reforms with the mission of resource and market balance. Under the "Belt and Road" framework, China-Arab cooperation can meet the needs of both sides for common development.
First of all, China-Arab cooperation will help Argentina get out of economic difficulties. In the past 10 years, the Argentine economy lags behind the average level of global emerging markets and developing economies, and most of the time even lower than the average growth level of advanced economies. In 2020, under the impact of the new crown pneumonia epidemic, Argentina will experience the worst economic recession in history, with a gross domestic product (GDP) growth rate of -11.78% (see Figure 1). In the same period, data from the National Bureau of Statistics and Census of Argentina showed that its unemployment rate exceeded 11%, and its poverty rate and extreme poverty rate reached 42% and 10.5% respectively, both peaks in the past 16 years. The debt pressure is relatively prominent. With limited endogenous growth momentum, foreign cooperation is the main support for Argentina to get out of the crisis. The “Belt and Road Initiative” jointly built by China and Argentina will help Argentina’s economic growth and employment expansion, and it has become an important option for it to get rid of its predicament.
Secondly, Argentina has the practical ability to undertake China's foreign investment and cooperation. Since 2014, China has become a net foreign direct investment (FDI) outflow country; since 2016, China has become the world's second largest foreign investment country. Outbound investment is a natural result of China's reform and opening up strategy of "bringing in" and "going out" and the accumulation of capital, technology and experience. It also undertakes the important mission of promoting international production capacity cooperation. Argentina is the third largest economy in Latin America and a major member of the Southern Common Market. It has a relatively complete range of industries and has the ability to provide supporting industries for Chinese investment. Therefore, Argentina has the power and ability to undertake Chinese investment and production capacity transfer, and China-Arab investment cooperation under the "Belt and Road" framework has the basic conditions for stable expansion.
Third, Argentina has a strong desire to undertake the export of China's infrastructure construction capabilities. The important content of the "Belt and Road" initiative is the interconnection of infrastructure. China has relatively mature technology, experience and human advantages in related fields. In Argentina, due to the relatively backward infrastructure, the cost of productive services such as transportation and warehousing accounted for a high proportion of the production cost of the enterprise, which has compressed the profit margin of the manufacturing industry and inhibited industrial development. In order to improve the infrastructure, Argentina is promoting the largest infrastructure renovation plan in history. Under the "Belt and Road" framework, focusing on infrastructure investment and introducing China's superior production capacity and technology into Argentina can achieve a win-win situation for China and Argentina.
Finally, Argentina has the feasibility of carrying the renminbi to "go global." The internationalization of the renminbi is an important carrier for China's new round of opening to the outside world, and it has the conditions for its implementation in Argentina. At present, China has successfully promoted the local currency swap project in Argentina and has established a regional clearing bank. Therefore, Argentina has the scale of transactions and operational experience to carry the internationalization of the renminbi, and it can become a viable pilot area. Under the framework of the “Belt and Road” initiative, China and Arab countries will carry out production capacity cooperation and infrastructure interconnection construction, which is conducive to the formation of a good situation of product flow and capital flow circulation.
While the pragmatic cooperation between China and Arab countries in the “Belt and Road Initiative” continues to expand, the internal and external market environments are also constantly changing. Sino-Arab cooperation is facing structural friction in the trade field, and bilateral cooperation is increasingly being affected by external barriers.
First of all, the volatility of Argentina's macroeconomic and policy has caused certain disturbances in bilateral pragmatic cooperation. Due to the weak recovery of the global economy and the stalling of internal growth, Argentina has been facing high inflation, foreign exchange shortages, exchange rate fluctuations and fiscal imbalances in recent years. It has been forced to introduce a series of foreign exchange control measures to prevent financial market turmoil and increase income. Higher tariffs are imposed on major export products such as soybeans and soybean oil. These measures have objectively impacted Chinese companies' investment and trade activities in Argentina.
Secondly, Argentina's frequent trade remedy measures against China have had a certain impact on bilateral trade. Due to the high concentration of domestic production in Argentina and the competition between the two sides' products, Argentina is one of the countries and regions that has initiated the "two oppositions and one guarantee" (anti-dumping, countervailing and safeguard measures) against China. As of mid-2020, Argentina is the world's fourth largest anti-dumping litigation against China (124 cases) after India, the United States and the European Union. The countervailing measures initiated against China rank behind the United States and Canada (20 cases). The use of measures is also relatively leading in Latin America (6 cases). In contrast, China has not initiated trade remedy measures against Argentina under the framework of the World Trade Organization (WTO). Trade frictions have affected the trade between China and Arab countries to a certain extent, and have a negative effect on the smooth flow of trade between the two countries.
Finally, Argentina's traditional infrastructure construction field and emerging fields such as 5G are fiercely competitive, and the game of interests is complex. The long-term economic downturn coupled with debt pressure has caused the Argentine government to face financial constraints. It is difficult to use public financial resources to expand the scale of investment. It can only rely on external financing to achieve infrastructure investment. Now, competition between China, the United States, the European Union and the local area has been formed. As latecomers, Chinese companies face multiple disturbance factors. They must adapt to the international project bidding model and engineering standards under the European and American paradigm. They must also meet the multi-level demands of local owners, competitors, environmental protection organizations and communities, and put forward proposals for project operation and management. Higher requirements. The rapid development of China-Arab cooperation has inevitably aroused the attention and vigilance of traditional interest groups, and has also formed a certain amount of pressure on the progress of the project.
The “One Belt, One Road” initiative provides a new platform and new impetus for China-Arab cooperation, which can promote cooperation between the two sides to form a good situation of dynamic upgrading and continuous breakthroughs. The development demands of China and Arab countries are consistent, but they also face certain practical challenges. Both sides should make a new assessment of the value of risk hedging that can be generated by co-building the “Belt and Road” cooperation to maximize common interests. To this end, China and Arab countries need to form a joint force in the following directions.
First, the China-Arab joint construction of the “Belt and Road” is facing huge demand space, and the further enhancement of political mutual trust and communication should be used to empower pragmatic cooperation and credit enhancement. On the one hand, China-Arab "Belt and Road" cooperation has made solid progress in the field of "five links". The two sides also have a high consensus on the joint construction of the "Belt and Road". The signing of bilateral cooperation documents and the promotion of further cooperation plans will be natural. Promote the signing of relevant documents as soon as possible. On the other hand, in addition to the bilateral communication between China and Arab states, the G20 mechanism is the most prominent for regular communication at the multilateral level, while multilateral channels such as the BRICS and APEC are relatively lacking. Both sides should innovate mechanisms and strengthen multi-level political and policy communication.
Second, China-Arab joint construction of the "Belt and Road" has practical problems, and further expansion of trade and investment facilitation measures should be promoted. First, China and Arab countries should form a bilateral trade remedy cooperation mechanism as soon as possible to reduce trade losses caused by trade frictions through dialogue and consultations. Secondly, China and Arab countries must strengthen cooperation in animal and plant quarantine inspection, customs clearance and other links, and strengthen cooperation in the fields of private sector dialogue, market research, and productive investment supporting services to promote the expansion of bilateral trade and investment cooperation. Finally, in view of the consistent requirements of the MERCOSUR signing free trade agreements with foreign countries, in addition to gradually advancing the formation of the China-Mercury Free Trade Agreement, China and Arab states should also actively promote bilateral trade and investment arrangements and promote trade and investment liberalization.
Third, there are areas of innovation in China-Arab joint construction of the “Belt and Road”, and new cooperation that advances with the times should be formed. The existing cooperation between China and Argentina has created a number of potential room for improvement: First, there is further room for RMB international cooperation. On the basis that the RMB has already played a certain clearing and reserve function in Argentina, further promoting its pricing and settlement functions can not only To meet the needs of bilateral investment and trade expansion, it can also effectively reduce the risk of exchange rate fluctuations and effectively facilitate the local operations of the companies of both parties; the second is business space, during the epidemic of the new crown pneumonia, cultural products such as food, pharmaceutical products and games between China and Arab countries Trade has increased, and e-commerce has also seen a big leap, indicating that there are new demands for cooperation between China and Arab countries in related fields. These gaps should be filled through the "Healthy Silk Road" and "Digital Silk Road"; the third is international In the new space for cooperation, China and Arab countries have common areas in areas such as climate change, Antarctic scientific research and deep-space exploration, and they have conditions to expand cooperation.
Fourth, there is a cognitive gap in the joint construction of the “Belt and Road” between China and Arab countries, and communication and identification should be used as obstacles to eliminate integration. Lack of mutual understanding is the underlying reason that restricts the in-depth development of China-Arab Belt and Road cooperation. For this reason, at the exchange level, China and Arab countries should establish a long-term direct government, think tank and media cooperation mechanism, and implement an open and multi-level cooperation mechanism. Communication and docking, as much as possible to establish an information exchange platform to avoid external interference.
