Leading pragmatic cooperation between China and Arab countries in the agricultural and mining industry

The Argentine Import Commodity Bonded Exhibition and Trading Center in the Lingang New Area of Shanghai, China officially opened on May 27th. It is operated by the Argentine Innovation Center jointly initiated by the Argentine Investment and Trade Promotion Bureau, the Argentine Embassy in China, the Argentine Consulate General in Shanghai, and others. According to the reporter's understanding, the Argentine Import Commodity Bonded Exhibition and Trading Center will make efforts to build a new bonded exhibition and trading model that integrates display experience, brand promotion, product distribution, e-commerce sales, trade distribution, and other functions. Argentine beef companies export meat to the Yangshan Special Bonded Zone in China to better meet the consumption needs of the Chinese market through bonded display transactions.

With the increasing variety and quantity of goods exported by Argentina to China, and the steady growth of trade volume, Argentina is increasingly valuing China's huge market size. Argentina is one of the major producers and exporters of global food and meat products. In 2023, the bilateral trade between China and Argentina reached 17.399 billion US dollars, with over 75% of Argentina's beef exported to China, which is its largest meat export destination in the world.

The trade between the two countries not only affects the rise and fall of related enterprises, but also affects the development prospects of bilateral relations. Mile, who took office as President of Argentina in December last year, initially deliberately kept a distance from China, but after more than four months in office, his attitude towards China began to show a significant change. In April this year, Mille stated in an interview with the media that the trade relationship between China and Argentina has never changed. Argentinians are very willing to do business with Chinese people. From April 27th to May 1st, after Mile's statement, as the first senior official of the new Argentine government to visit China, Argentine Foreign Minister Mondino led a delegation to China.

Researcher Jie Yu from the Latin American and Caribbean Institute of the China Academy of International Studies believes that Mondino's visit is of great significance. One is to clarify misunderstandings and release goodwill. Since Mile took office as President of Argentina, China Argentina relations have been put to the test and diplomatic friction has been constant. This year marks the 10th anniversary of the establishment of a comprehensive strategic partnership between China and Argentina. Therefore, the primary task of this Argentine high-ranking official's visit to China is to correct their attitude towards cooperation with China and release friendly signals. The second is to enhance political mutual trust and continue to promote pragmatic cooperation. The China Arab currency swap agreement will expire in June this year, and Afghanistan will need to repay nearly $4.9 billion in swap debt. Previously, the Albanian government had used Chinese yuan to repay the International Monetary Fund's $3.4 billion maturing debt. The smooth renewal of this swap agreement is of great significance for maintaining the central bank's foreign exchange reserves and avoiding a debt crisis. At present, economic and trade relations remain the "ballast" and "booster" of China Arab relations. Despite some political differences between China and Arab countries, trade exchanges between the two sides have always maintained an upward trend against the trend. Currently, China is Argentina's second largest trading partner, third largest export market, and second largest source of imports.

Moreover, China has always maintained a friendly attitude towards Argentina. China is an important source of investment in Argentina's infrastructure, energy, and new energy sectors. Under the framework of the joint construction of the "the Belt and Road", China Arab practical cooperation has achieved many results, including the transformation of Belgrano railway system, Kirchner hydropower station, Gaochary photovoltaic power station and other star projects. At the same time, there is great potential for cooperation in key strategic mineral resources between China and Arab countries. Argentina is one of the "lithium triangle" countries in Latin America, with the world's largest salt lake lithium resources, accounting for 21% of the global total. Its production costs and difficulties are relatively low, attracting lithium industry giants, mining companies, and even automotive companies from multiple countries. Driven by the global lithium rush, China has also increased its investment in Argentina's mining industry, participating in 7 lithium mining projects in the country.

The business communities of the two countries share common interests in promoting economic and trade cooperation between China and Argentina. On April 30th, the high-level conference on promoting infrastructure investment in development in Argentina was held in Beijing, China. The forum covers multiple topics, including infrastructure construction, investment opportunities, and technological cooperation between the two sides. Business people jointly discussed how to further strengthen cooperation between Argentina and China in the field of infrastructure to promote common economic development between the two countries.

On May 20th, the construction task of the Yuyaco Salt Lake project in Argentina, undertaken by China Railway Tenth Bureau, was completed 10 months ahead of schedule and successfully delivered. Gustavo Saenz, the Governor of Salta Province in Argentina, delivered a speech at the completion and delivery ceremony, stating that the successful completion of the Yuyeiaco Salt Lake project has made important contributions to driving local economic development and mining industry development. At the same time, it also marks a leap in quality and level of cooperation between Argentina and China in the fields of mining and energy, laying a solid foundation for further cooperation between Argentine and Chinese enterprises in related fields in the future.

According to data released by the Argentine National Bureau of Statistics on May 22, the country's economy shrank by 8.4% year-on-year in March, marking the fifth consecutive month of decline and the largest decline since 2020. Data shows that in March, output in nine industries in Argentina decreased year-on-year, with construction industry output decreasing by 29.9% and manufacturing industry output decreasing by 19.6%. After a year-on-year decline of 3.0% and 4.1% in February and January, Argentina's economy also experienced a decline in March.

In the year ending March 2024, Argentina's economic output decreased by 5.3%. Faced with economic downturn and uncertainty in the future, the Millet government needs its advantageous product exports to drive the economy out of a downturn, which is one of the foundations for Millet's continued support from voters. So, over the years, Argentina has been working hard to open up the Chinese market, delivering a large number of agricultural products from beef to cherries, shrimp, chicken, and other products to Chinese consumers, and striving to continuously expand the variety and quantity of exports.

In January of this year, the Argentine Ministry of Agriculture, Animal Husbandry and Fisheries announced that Argentina was allowed to export wheat to China for the first time after 25 years of negotiations. China, an eastern market with an annual import volume of over 10 million tons of wheat, has received Argentine wheat for the first time, providing a valuable opportunity for Argentine agricultural products to further open the door to the Chinese market. The Argentine Ministry of Agriculture, Animal Husbandry and Fisheries emphasized that considering the potential of the Asian market, starting to transport wheat to China is an important step in Argentina's foreign trade.

In early January, the Argentine National Administration for Agricultural and Food Hygiene and Quality announced that China had approved the import of frozen rainbow trout from Argentine freshwater farms. According to reports, China will become another important corn export market for Argentina in the second half of this year, as China is about to approve the entry of the product and its derivatives, with a value exceeding 4.5 billion US dollars.

As a large number of Argentine agricultural products enter the Chinese market, as Argentine Minister of Economy Sergio Massa said, "China's demand for high-quality food and agricultural products provides valuable opportunities for Argentina's economic growth and the development of the agricultural and food industry."

The newly appointed Argentine Ambassador to China, Ma Zhiyuan, who has been in office for more than two months, confidently stated that the relationship between Argentina and China will have a prosperous future.