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A Chinese lithium project in northern Argentina began production, a further sign of warming relations between the two countries.
Ganfeng Lithium is one of the world’s biggest producers of the metal, which is an integral ingredient in rechargeable batteries — a key component to the global green energy transition.
During his 2023 campaign, President Javier Milei vowed to “never do business with communists,” referring to Chinese leader Xi Jinping as a “murderer” and a “thief.” Since Milei assumed power, however, his stance has radically shifted, as greater Chinese investment in the country could help boost Argentina’s flagging economy.
SIGNALS
Lithium offers ‘promising’ opportunity for Latin American economies
South America’s lithium-producing countries, including Argentina, Bolivia, and Chile, have a “promising future,” think tank The Wilson Center noted. In Argentina’s case, lithium offers a lucrative solution to help combat the country’s long-standing rampant inflation — the centerpiece of President Milei’s agenda. While other so-called “Lithium Triangle” nations on the continent have struggled to take advantage of the “white gold” resource, Milei appears to have recognized the opportunity despite his ideological reservations toward China: The US and Europe, meanwhile, have been “passive” in their approach to courting Latin America’s resources, the Wilson Center wrote. That could change under new US Secretary of State Marco Rubio, who said in his confirmation hearings that Washington needed to better counter China in Latin America.
China’s Latin America push comes at expense of US
China’s greatly expanded influence in Latin America puts at risk decades of bilateral relations with the US — the region’s long-time largest trading partner, The Economist wrote. While China’s interest has been a boon for many smaller Latin economies — two-way trade jumped from $18 billion in 2002 to $450 billion in 2022 — nations risk becoming overly reliant on Beijing. “China is trying to create a situation in which it shapes the external environment in Latin America according to its interests,” an analyst from US-based think tank Inter-American Dialogue said. Meanwhile, Milei’s frequent outreach to US President Donald Trump has yet to “translate into large investments or an agreement with the IMF,” El País noted.