The crypto world was up in cheer yesterday when Pro-Bitcoin Javier Milei won the presidential elections in Argentina. As it appears, the president-elect will work with the US dollar, and China has something to say about that decision. Argentina’s invitation to join the BRICS economic bloc, given just three months ago, is now unlikely to be accepted.
China has something to say about Argentina aligning with the US
During his campaign, Javier Milei vowed to abolish the Central Bank, abandon the Argentine Peso as a currency, and replace it with US dollars in order to overcome a financial crisis that has left 40% of Argentina’s 45 million citizens in poverty and inflation at more than 140%. He has stated, “I know how to exterminate the cancer of inflation.”
Milei’s radical ideas have also included severing ties with Argentina’s two most important trading partners, Brazil and China. Milei has stated that he will not retain political links with China or any other “communist” country, instead restricting cooperation to the private sector.
He has referred to the country as an “assassin” and stated that its residents are not “free.” He has also pledged to withdraw Argentina from the South American commercial group Mercosur and has referred to Brazil’s President Luiz Inácio Lula da Silva as a “socialist with a totalitarian vocation.”
BRICS made international headlines at its annual summit in 2023 with the announcement of a six-nation expansion strategy. In fact, Argentina, Saudi Arabia, the United Arab Emirates (UAE), Iran, Egypt, and Ethiopia were all invited to participate in its operations.
Argentina, nevertheless, could now decline the invitation in light of the new trajectory mapped out by its president. The spokesperson for China’s Ministry of Foreign Affairs, Mao Ning, addressed the rumors that the new president, Javier Milei, had declined the bloc’s invitation.
What I want to say is that the BRICS cooperation mechanism is an important platform for emerging markets and developing countries to strengthen solidarity and cooperation and uphold common interests.
Mao Ning in an Interview with Reuters
Will Javier Milei manage to sever ties with China?
Regarding the economic climate, it is doubtful whether Javier Mile will be capable of implementing these resolutions. Argentina’s ambassador to China, Sabino Vaca Narvaja, stated that severing ties with the Chinese government would result in “millions of jobs lost” and a “triple productive, social, and financial implosion.”
He described several building projects in Argentina, including two hydropower dams in Patagonia, that are financed by institutions from China. He added that these initiatives could be halted in the event of a rift between the two nations. In addition, Argentina has used a currency transfer line with China worth US$18 billion to bolster the Argentine Peso.
Sergio Massa, Milei’s electoral opponent, emphasized in debates the significance of China to the national economy, given that it supplies a substantial portion of the exports from several Argentine provinces. In response, Milei asserted that Argentina could easily identify alternative trade partners and refuted Massa’s claims that alterations in the bilateral ties with China would have an impact on employment.
Consistent with its approach, Beijing has offered a pragmatic response: despite Javier Milei’s critique of the necessity of engaging in trade with the Asian nation, China congratulated him on his victory in the presidential election in Argentina.
Foreign Ministry spokeswoman Mao Ning stated at a routine press briefing yesterday (November 20): “We congratulate Argentina on its presidential election and congratulate Mr. Milei on his election.”
Donald Trump congratulated Milei on his victory, adding, “Great news! Melei will make Argentina great again”.
Argentina’s membership in the Belt and Road Initiative and its potential membership in the BRICS will undoubtedly remain highly uncertain. The subsequent events are uncertain.
