Visitors tour the Argentine booth at the 2023 CIFTIS in Beijing on September 3, 2023. Photo: VCG

Editor's Note:

The economic and trade relationship between China and Argentina has entered a new phase with Argentina becoming a member of the BRICS in August and a partner for Belt and Road cooperation in 2022. The two countries' cooperation in services, finance and currency settlement added more weight to this evolving relationship.

As President Alberto Fernández is scheduled to attend the third Belt and Road Forum for International Cooperation to be held in Beijing this October, Global Times reporters Chu Daye and Ni Hao (GT) interviewed Argentine Ambassador to China Sabino Vaca Narvaja (Narvaja), on the latest development of bilateral and multilateral cooperation and its implications for the world amid geopolitical challenges.

GT: The BRICS has expanded its membership for the first time. What role do you believe the BRICS cooperation mechanism will play on the international stage in the future?

Narvaja: The expansion of BRICS is a significant milestone in international relations because objectively, it is now the most relevant forum globally. It holds prominence in terms of population, contribution to global GDP growth, mineral and energy reserves, food production, and technological development. This new group of countries, due to their importance in various economic sectors, can shape global agendas on critical issues such as oil, minerals, and food.

Furthermore, with the inclusion of Argentina and the five other countries, it will promote a more harmonious global order. We are at an ideal juncture to embark on a new path of integration, inspired by the spirit of a shared community for humanity, as advocated by President Xi Jinping in initiatives like Global Development, Global Security, and Global Civilization.

Historically, emerging countries have been marginalized in international organizations. The strengthening of BRICS is crucial for the development of countries in the Global South. The New Development Bank of BRICS is pivotal in shaping a new financial architecture based on production and development. The proposal to use their own currencies for investments and trade among their partners will play a decisive role in the world economy.

GT: With Argentina joining BRICS, do you believe that economic and trade cooperation between Argentina and China will develop further? 

Narvaja: Argentina has been a pioneer in using and promoting the use of the yuan for trade and investments because we understood, as President Luiz Inacio Lula da Silva of Brazil stated during his visit to China, that it made no sense in using a third currency to link our economies. This concept gained momentum at the last BRICS summit in South Africa and is now a decision adopted by more and more nations around the world.

The expanded BRICS group is undoubtedly the natural forum to promote the reform of the international financial system, because instead of encouraging speculation and currency flight, the New Development Bank of BRICS, presided by Dilma Rousseff, is a fundamental tool for financing and promoting more infrastructure projects, a key element in expanding our productivity and export capacity.

Today, China is our second-largest trading partner, but I am convinced that our trade will further enhance in the coming years, making China our primary trading partner. This is the result of another initiative that Argentina recently joined: the Belt and Road Initiative (BRI).

GT: This year marks the 10th anniversary of the BRI. Taking Argentina as an example, what role do you believe the BRI has played in enhancing economic cooperation, cultural exchanges, and mutual political trust among countries along the routes?

Narvaja: This development of BRI solidified itself as the most significant global infrastructure plan in recent times. Argentina and China, as you may know, have highly complementary economies and share a Comprehensive Strategic Partnership. 

Shortly after Argentina officially joined the BRI during the Beijing Winter Olympics [in 2022], a cooperation plan was signed between the two countries. In our case, the focus of the cooperation plan is on infrastructure projects aimed at increasing our productive capacity, promoting the country's federal development, and improving the well-being of our people. However, the cooperation plan covers not only infrastructure but also 13 sectors of strategic cooperation, including education, tourism, sports, science and technology, and defense. In other words, we are talking about a comprehensive cooperation plan that serves as the most significant bilateral instrument between our two countries today.

For instance, Argentina has participated in all editions of the China International Fair for Trade in Services, involving both the private sector and the highest authorities, to promote our knowledge-based exports.

I am convinced that the third Belt and Road Forum for International Cooperation, scheduled to be held in Beijing in October with the presence of President Alberto Fernández, will be an excellent opportunity to continue promoting initiatives to develop trade in services between our countries.

Argentina also excels in cultural exports, tourism services, and software and application development. In this regard, the exchange of experiences and technology transfer between our countries is of vital importance. Argentina's inclusion in the BRI will undoubtedly deepen cooperation in these sectors, generating significant added value for our countries.

Argentine Ambassador to China Sabino Vaca Narvaja File photo: VCG

GT: Argentina and China have renewed their currency exchange agreement. What effect do you think this will have on bilateral trade? Will cooperation in the services industry also consider settlement in the local currencies of both countries?

Narvaja: As you know, we have had a currency swap mechanism in place for many years, but we have taken a step further by advancing in our trade using the yuan. Our question has always been, why, if China is one of our main trading partners, should we use a third currency that is not from either of our countries? Consider that by using our own currencies, we avoid financial costs associated with using a third currency, so I believe that more and more sectors of the economy will utilize these mechanisms. For example, recently, the Bank of China in Buenos Aires facilitated the first direct investment in yuan by a Chinese energy company specialized in lithium in Argentina.

This is the change that Argentina is proposing in the global system, and it also receives strong support from China and the BRICS countries. I believe it is essential that we redirect the financial system toward productive development and infrastructure investment to enhance the quality of life for our people.

GT: You have visited many places in China. What is your impression and evaluation of China's economic development? What is your assessment of China's role in promoting global development?

Narvaja: When you delve into the Chinese provinces, you can understand initiatives driven worldwide by President Xi Jinping, such as Global Development, Global Security, and Global Civilization because their spirit is found in the regions, in how this country lifted 800 million people out of absolute poverty and integrated them into the middle class, building community and modernization while respecting, enhancing, and understanding local characteristics.

In this regard, President Xi Jinping's rural revitalization plan has not only been crucial in eradicating structural poverty by 2021 but is also a key element in reducing the asymmetries generated by an unprecedented pace of development in this country.

China has transformed from a poor and backward country into the world's largest in terms of trade in goods, foreign exchange reserves, and manufacturing. It boasts some of the most significant healthcare, education, and social security systems globally. China achieved in just a few decades the industrialization that developed countries took several centuries to accomplish. The goal was then to advance toward high-quality development. This means achieving greater self-sufficiency and strength in science and technology, promoting industrial transformation and modernization, driving coordinated urban, rural, and regional development, and fostering green and low-carbon economic and social development.

If China grows, the global economy grows, and the impact is even more significant in complementary countries like those in Latin America.