China-Latin America cooperation is on the steady rise. In the latest development, China and Argentina took a series of steps to expand bilateral ties during Argentine Economy Minister Sergio Massa's trip to China last week. On Friday, the two countries signed a cooperation plan on jointly promoting the construction of the Belt and Road Initiative (BRI). The two countries also inked a deal to renew and expand their currency swap program. China has also reportedly voiced support for Argentina to join BRICS.
While such positive steps to expand mutually beneficial cooperation should be normal and hailed, some in the US evidently cannot hide their sour grapes over growing China-Latin America cooperation. On Friday, Bloomberg reported that the US was seeking "new tools to compete with China in Latin America." Citing Juan Gonzalez, the US National Security Council's senior director for the Western Hemisphere, Bloomberg reported that the US administration intended to straighten the US position in the region through changes to its Development Finance Corporation, a development agency for lower- and middle-income countries.
Such moves once again laid bare Washington's hegemonic and lose-lose approach in relations with other countries and regions. The US has long treated Latin America as its "backyard," and has been actively trying to sabotage normal, win-win cooperation between China and Latin American countries. However, amid local economic hardship due in no small part to the toxic policies of the US, many Latin American countries are increasingly seeking to expand cooperation with China.
For years, the US has tried to increase its influence over Latin American countries like Argentina. However, Latin American countries haven't been able to achieve the political stability and economic development they have long desired. Now as the US shifts to protectionist posture, trade development opportunities for Latin America have been further eroded, with some even facing multiple crises due to the US Federal Reserve's irresponsible monetary policy. For instance, Argentina's inflation rate accelerated to an eye-dropping 8.4 percent in April. The country's inflation over the last 12 months totaled 108.8 percent, with prices up 32 percent in the first four months of the year. Meanwhile, Argentina's foreign exchange reserves are tumbling. Some economists have pointed out that both internal and external factors such as the US' monetary policy are responsible for that.
Some other Latin American countries face similar situations. And they are now more aware than ever that the Washington Consensus, which is based on and aimed at preserving the US' dominance, is dead. In this context, there is growing perception about China as a reliable partner for the region. The Southern Common Market's (Mercosur) as a whole has shown great interest in seeking to expand cooperation with China, which is based on mutual benefits from and vast potential for cooperation with China.
In the case of Argentina, China is Argentina's second-largest trading partner and the bilateral currency swap agreement has helped ease the South American country's foreign currency shortage. Moreover, China and Argentina share high economic complementarities, which is the fundamental reason why the two countries can reach cooperation agreements.
Investment in infrastructure under the BRI will not only benefit Argentina's local development, but also boost its exports to China and cooperation in tourism and other areas. It needs to be pointed out that the joint development of BRI projects is solely focused on mutual benefits and based purely on common needs, and is not targeting any third party.
Moreover, China and Argentina are stepping up cooperation on lithium mining projects to boost the development of electric vehicles and green energy transition. Argentina is home to large reserves of lithium, while Chinese companies produce more than two-thirds of the world's lithium annually. So their bilateral cooperation is conducive to promoting both the green energy transition and Argentina's exports.
In a broader sense, joint development of BRI projects will also promote connectivity and cooperation within the Mercosur. In fact, Argentina is not the only member of the Mercosur that is seeking to strengthen cooperation with China. Brazil, the largest economy in Latin America, has also shown great willingness for carrying out closer cooperation with China. Both Brazil and Argentina have started using the Chinese yuan for certain trade settlements.
For Mercosur, as trade among members is limited and competitive pressures are building up, it is essential to integrate into the larger international industrial chain to achieve greater social and economic development. During this process, China, with its win-win approach, is one of the most suitable partners, while the US' protectionist and hegemonic scheme is losing hearts and minds.