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China Lays Out Conditions to Argentina for Renewing $5 Billion Yuan Swap

Chinese President Xi Jinping has made clear what he expects from Argentina’s new President Javier Milei— if the relationship of cooperation and trade between their two countries is to continue. Milei has figured out, or has been told, that breaking ties with China, as he vowed to do during his election campaign, would be suicidal. In consequence, he has changed his tune, and has assured Beijing that he intends to maintain friendly relations. Moreover, he is desperate to reactivate the $20 billion yuan swap line that the People’s Bank of China (PBC) and the Argentine Central Bank (BCRA) have maintained for years. This still had $5 billion available but was suspended by the PBC following Milei’s Nov. 19 election. Were the swap to be reactivated, Milei would be able to pay the $1 billion due the IMF on Dec. 21, for which there are otherwise no foreign reserves or funds available.

On Dec. 11, Milei and Foreign Minister Diana Mondino met at length with Wu Weihua, Vice President of the Permanent Committee of China’s National People’s Congress, who had attended the Dec.10 inauguration as Xi Jinping’s representative. Citing diplomatic sources, business daily El Cronista described the meeting as relaxed and friendly, during which Milei repeated his commitment to maintaining good relations with China. He also delivered a personal letter for Xi expressing his good wishes and indicated his openness to speaking with him by phone, La Nación reported. Aside from raising the issue of the swap with Wu, Milei asked Xi for his help in renewing the swap to facilitate payments to the IMF. Wu also extended an invitation to Milei to visit Beijing as soon as possible.

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