Argentine Finance Minister Sergio Massa and his delegation will leave tomorrow for a May 29-June 4 visit to China, first stopping in Shanghai to attend the 8th Annual Meeting of the Board of Governors of the BRICS New Development Bank (NDB) May 30-31 and then proceeding to Beijing for several top-level meetings. On May 10, Dilma Rousseff, former Brazilian President and the new president of the NDB, and Chinese Finance Minister Kun Liu, who is also vice president of the NDB’s Board of Governors, sent a personal invitation to Massa to attend the annual meeting, whose theme is “Shaping a New Era for Global Development.”
Argentina Central Bank governor Miguel Pesce will accompany Massa, as will other members of his economics team, and, interestingly, Federal Deputy Maximo Kirchner (the son of VP Cristina Fernandez de Kirchner), whose presence has political significance, as he is not an economist. Argentina’s activist ambassador in Beijing, Sabino Vaca Narvaja, who has an excellent relationship with Massa, and is close to Vice President Cristina Kirchner, will join the delegation on the ground.
Massa’s trip to China is the result of careful coordination between Brazilian President Lula da Silva, Chinese President Xi Jinping, and Dilma Rousseff, all of whom have taken steps to help Argentina, which is suffering from a dire financial crisis as a result of what Lula charges is “the IMF holding a knife to its neck.” Argentina is in urgent need of bolstering its foreign currency reserves, which are at an all-time low. After meeting with his Argentine counterpart, Alberto Fernandez on May 2, Lula contacted Xi Jinping and Rousseff to urge them to act on Argentina’s behalf.
Argentina is not a member of the NDB, although it wants to become one as soon as possible in order to access financing and credit lines the Bank offers. One of the issues to be discussed at the annual meeting is modification of Article 7 of the Bank’s statute to allow it to function as a guarantor for credits issued to Brazilian exporters. That way they can sell to Argentina and receive payment in pesos, to be later converted to Brazilian reals. Whether non-member Argentina, or other non-members, may access the Bank’s contingency funds for emergencies may also be discussed.
A top agenda item Massa will be discussing with Chinese authorities is the increase of the existing $19 billion currency swap to as high as $38 billion, according to the Argentine daily Dangdai, and an increase from $5 billion to $10 billion of the portion of the swap to which the Argentine Central Bank (BCRA) has free access, used to import from China and pay in yuan. Massa hopes to have the details on this proposal ready to present to the Chinese prior to leaving Buenos Aires.
China’s ambassador in Buenos Aires, Zou Xiaoli, who has a close working relationship with Massa, helped to arrange meetings for him in Shanghai and in Beijing. In Beijing, Massa is scheduled to meet with the president of the National Development and Reform Commission, as well as with the ministers of Finance, Production and Economics. He also expects to finally pin down Chinese financing for several infrastructure projects already agreed to in the Memorandum of Understanding on joining the Belt and Road Initiative that Alberto Fernandez signed on Feb. 4, 2022, during his meeting with Xi Jinping. These include railroad, energy, and other transportation projects, and the all-important Atucha IV nuclear reactor, which China will build.
