To revitalize economy, Milei needs China
Published: Nov 22, 2023 10:38 PM
Argentine presidential candidate for the La Libertad Avanza alliance Javier Milei speaks to supporters after winning the presidential election runoff at his party headquarters in Buenos Aires on November 19, 2023.Photo: AFP

Argentine presidential candidate for the La Libertad Avanza alliance Javier Milei speaks to supporters after winning the presidential election runoff at his party headquarters in Buenos Aires on November 19, 2023.Photo: AFP

Will the newly elected president, Javier Milei, known as "Argentina's Trump," stop his country's engagement with China? I want to say that it is a fantasy. Many "grand promises" in Western-style elections should not be taken seriously. China is Argentina's second-largest trading partner, and there is a saying in China that "forced by the situation, people had to accept the reality." Milei's radical attitude toward China during his campaign is adjusting. And Milei's chief foreign policy advisor, Diana Mondino, stated earlier this month in a speech that if Milei wins, the relationship between Buenos Aires and Beijing will not be disturbed.

Milei's style is indeed unusual. His unconventional spirit surpasses even that of Trump and former Brazilian President Jair Messias Bolsonaro. He frequently appears on television with messy hair. During the campaign rally, Milei wielded a running chainsaw and vowed to cut through government bureaucracy. Additionally, he frequently uses swear words in his speeches. He has already exceeded the usual characteristics of the most extreme right-wing politicians. In addition, he has no other political experience except for becoming a national deputy representing the City of Buenos Aires for the political coalition La Libertad Avanza in 2021. Therefore, he dares to call for the abolition of the Central Bank of Argentina and the replacement of the peso, the national currency, completely with the dollar, which are proposals that other politicians dare not even think about.

However, the Argentine people are tired of reality. The annual inflation rate is as high as 116 percent, which alone is enough to be of great concern to the public. Choosing the unruly Milei is seen by many as a guarantee that change will eventually happen. Therefore, the Argentine people gave him 30 percent of the votes in the first round of elections, making him second place. In the second round, he won a landslide victory, defeating the current Minister of Economy, Sergio Massa, who represents the "old system."

However, the "eccentric" style of public figures often includes a considerable amount of pretense, let alone that of politicians who have reached the highest level of power. Milei's previous profession was as an economist and television commentator. His unconventional spirit won him high TV ratings. Afterward, he maintained his "eccentricity" so that he could be instantly recognizable to the public, and this was also largely hijacked by public perception of him.

Now that Milei has been elected president, the Argentine people's greatest hope for him is "change." However, a president's change cannot be reckless. It must lead Argentina in a positive direction. He needs to fulfill his two major promises of reducing the cost of bureaucracy and revitalizing the country's economy. To achieve these goals, it will be much more difficult than waving a chainsaw at campaign rallies and shouting slogans like "Make Argentina great again," imitating Trump.

It is relatively easier to reduce the cost of bureaucracy because Milei can actually eliminate several departments of the Argentine government. Even if he doesn't reduce the promised 18 departments to eight, he can still take some action, which can be considered accountable to the public.

But revitalizing the Argentine economy is no easy task, and it cannot be achieved simply by the president giving orders. The country's economy has experienced negative growth this year, and it is predicted to see an improvement next year. It is possible that Milei is in a cycle of economic recovery for Argentina, but he does not have the luxury of being careless and capricious. Trade with China is crucial to his commitment to revitalize the economy.

China is Argentina's largest buyer of soybeans and an important buyer of its corn and seafood products. Although Argentina has a trade deficit with China, China has helped Argentina to save dollar reserves by arranging currency swaps with the Argentine peso, supporting its import of Chinese products. Disrupting trade between China and Argentina would only deal a heavy blow to the Argentine economy and greatly increase the difficulty for Milei's new government to boost the economy.

Politics has its own logic, which is completely different from casually criticizing and making suggestions on television. As president, every decision Milei makes will involve the adjustment of interests and face resistance, so his sharpness is bound to be worn down during his term. It can be imagined that in the future, when he participates in major international activities, it will be difficult for him to appear with his hair messy like he did on television, and he can no longer casually use foul language in Argentine state and international activities. Will he really abolish the peso, which represents Argentine sovereignty, and the central bank? In Yugoslavia, which experienced severe inflation, I have seen examples of the government forcibly pegging the newly issued dinar to the Deutsche Mark at a one-to-one ratio. It is not ruled out that Milei may adopt some alternative method to completely dollarize Argentina. It is reasonable for countries to maintain monetary sovereignty.

I believe that the transition in China-Argentina relations will be much smoother than what Milei claimed during his campaign. During Bolsonaro's presidency in Brazil, there were some issues in China-Brazil relations, but those problems were far from leading to a complete breakdown of the two countries' relations, and the deviation of China-Brazil relations at that time was smaller than that of China-US relations. Argentina's overall strength is much lower than that of Brazil, and it has no strategic conflicts with China. Friendly cooperation is highly mutually beneficial for both sides.

There must be something about Milei that makes him the "dark horse" for the presidency of Argentina. Regardless of his style and how adept he is at "inflaming" supporters with his language, his sobriety and rationality will not be lacking. His proactive and realist attitude in handling major diplomatic affairs is believed to gradually emerge after he takes office as president of Argentina.

The author is a media professional. opinion@globaltimes.com.cn