According to Argentine media channel TN TV's report on June 14, last week, Santiago Boschili, president of the Argentine Central Bank, concluded a trip to China. During this visit, he held a series of meetings with Chinese representatives. These meetings not only discussed the renewal of the Sino-Argentine currency swap agreement, which is set to expire next year and worth 130 billion yuan, but also addressed financial issues such as cross-border payment interoperability.
The Hong Kong-based South China Morning Post states that this move is seen as an attempt by Argentina to show goodwill towards China in a discreet manner. After the Trump administration took office, US officials frequently challenged the China-Argentina currency swap agreement, attempting to pressure Argentina to terminate it.
According to reports, Bauschili’s trip lasted from June 7th to June 13th. On the 10th, Bauschili attended a high-level conference titled “Responding to Global Financial Uncertainty: Financial Market Development, Investment Strategies, and the International Monetary System”, co-hosted by the People’s Bank of China and the Bank for International Settlements.
According to a statement from the Argentine Central Bank, Bosielli met with Pan Gongsheng, governor of the People's Bank of China, during the seminar. The two sides exchanged views on international economic and financial prospects and discussed the operating mechanisms of the global monetary system.
According to the website of the People's Bank of China, during his attendance at the high-level meeting between the People's Bank of China and the International Clearing Bank, Pan Gongsheng met with central bank governors from many countries including Boschi. They exchanged views on topics such as the global economic situation and bilateral economic and financial cooperation.
CCTV reported that during the meeting, both sides also held further discussions on the renewal of the currency exchange agreement. According to reports, negotiations on extending the agreement have made progress but have not yet been finalized, and a series of administrative procedures need to be completed before its formal extension in August.
During this trip to China, Chinese and Arab officials also discussed other financial-related issues.
Bauschill shared Argentina's experience in payment method interoperability, such as transfer integration and QR code payment systems. It is reported that this topic has sparked interest among the Chinese side. Argentina is one of the markets with the highest adoption rate of virtual payments in Latin America.
Bao Xili attended a forum in China and met with Pan Gongsheng, governor of the Central Bank of China. People's Bank of China
Currency swaps refer to market transactions where two parties holding different currencies exchange equivalent amounts of currency at the beginning of the period, and then exchange back their respective currencies at the end of the period, while paying corresponding interest to each other. The prior agreement between the two parties constitutes a currency swap agreement.
In fact, Argentina was the first Latin American country to sign a currency swap agreement with China.
According to the website of the Ministry of Foreign Affairs, in April 2009, the People's Bank of China and the Central Bank of Argentina signed a three-year local currency swap agreement worth 70 billion yuan. The agreement was effective for three years. After several extensions, on June 9, 2023, the two central banks renewed the bilateral local currency swap agreement. The swap amount increased to 130 billion yuan, with a validity period of three years.
The Argentine Central Bank previously stated that it has gradually repaid the quota of currency swaps used previously between Argentina and China.
Regarding this, Bosili discussed the issue in May: "The portion of the quota activated under the China-Arab States agreement is consistent with what was announced more than a year ago. It remains activated, and its liquidity has remained unchanged. This quota will expire when the framework agreement expires, but we expect that it will be renegotiated or extended, which would extend the period during which this quota remains active."
The South China Morning Post reported that the Trump administration made great efforts to urge Argentine President Macri to cut off ties with China.
Last year, the U.S. Secretary of State’s special envoy for Latin America tried to sow discord between China and Algeria by labeling the bilateral currency exchange cooperation as a “extortion mechanism” by China, and called on Algeria to consider terminating it. He also pressured Argentina, claiming that the United States wanted to ensure that any agreements reached between Argentina and the International Monetary Fund would not be used to “extend” such cooperation, nor to enhance China’s influence through currency exchange.
Regarding the US efforts to sow division, Foreign Ministry spokesman Lin Jian once responded that for a long time, the bilateral currency swap cooperation between China and Afghanistan has played an important role in maintaining economic and financial stability in Afghanistan, and has been well received and positively evaluated by the Afghan side. We advise the US to adjust its mindset. Instead of spending time sowing division, it would be better to do something tangible for the development of Latin America and the Caribbean.
Argentina President Milyard is a supporter of Trump. During the 2023 elections, she spoke rudely about China, claiming that "China is a spy state" and that Argentina would sever relations with China. However, since taking office, Milyard has softened her attitude towards China, expressing her desire to visit China on multiple occasions.
In January this year, Milley said in an interview with the local newspaper “Trumpet” that he plans to visit China this year.
"China is a great trading partner," Michele stated, "We have very good commercial relationships with China. And we must try to trade with all countries in the world. Any country that wants to trade with us is welcome."
