Argentine Foreign Policy and its Development Model: Reflections on its Relationship with The Sino-US Rivalry

Joaquin Gomez Amato

Source: Coolt

One of the most outstanding dynamics of the international political economy in recent years has been the strong re-entry of industrial policy as a development strategy. The development strategies seen in China (Made in China 2025), the United States (Inflation Reduction Act), the European Union (Green New Deal), India (Make in India), and South Korea (Digital New Deal), have also materialized in Latin America with the recent launching of Brazil’s neo-industrial plan (NOVA Industrial Policy). These industrial programs generally aim at a set of tools of different kinds to provide directionality with a purpose (Mazzucato 2021).

However, today Argentina finds itself navigating a complex path, characterized by the absence of a comprehensive and productive economic policy. Moreover, the country’s room for maneuvering in both the global and regional arena—amidst the ongoing Sino-American dispute and the restructuring of global supply chains1—alongside its internal challenges, such as structural macroeconomic imbalances, is notably limited. In this sense, the Productive Development Plan 4.0 launched during the previous Argentine government (2019-2023) had two structural problems that have plagued the country since the 70s: the impossibility of stabilizing the macroeconomic sphere and the dangerous dissociation between its foreign policy and development model.

In this context, the following questions can be raised: How does the current Sino-American dispute operate in Argentine foreign policy? What is the relationship between the economic development model that a country decides to adopt with its foreign policy? What are the lessons that recent Argentine economic history teaches us about this alleged relationship? And finally, how is Javier Milei’s government standing on this?

Introduction: The Rise of the Sino-American Dispute

The alleged economic decline of the United States since the economic and financial crisis of 2008, as well as the reorganization of much of the global political economy towards the Asia-Pacific axis, have marked a turning point in the socio-political trajectories of South America and Argentina in several areas of political discussion. Thus, they have generated a favorable scenario for questioning the unipolarity present since the end of the Cold War, and have even allowed thinking about, as proposed by Svampa and Slipak (2015), a hypothesis of hegemonic transition.

As a result of the above, the initial years of the new century have unfolded as a pivotal juncture, delineating profound shifts in both the material and ideational landscape of global power dynamics, as well as in the commercial, financial, cultural, and political spheres across diverse regions of the world. For Latin American governments since the beginning of the 21st century, the relationship with China has acquired a strategic character, since it is an opportunity for the creation of a new multilateral global order, one that could potentially elevate the region’s standing on the world stage. However, it should be kept in mind that:

“While the United States and China are two unitary and independent actors that can better identify and secure their respective national interests, Latin America is a mosaic of countries whose international conduct has varying degrees of relative autonomy” (Tokatlian, 2007b, 50).

In this regard, the consolidation of the Chinese economy as the main trading partner ( see chart I) of Brazil, Chile, Uruguay, and Peru, and the second of Mexico, Colombia, Ecuador, and Argentina (Harvard Atlas Complexity 2021), should not make us lose sight of the hemispheric financial and ideational relevance that the United States still has in the region.

CHART I: Latin America – China’s position as a trading partner, 2000 and 2022, and share in total trade in goods, average 2020-2022 in position and percentages (%)

Source: International Trade Outlook for Latin America and the Caribbean 2023 (ECLAC 2023b)

Furthermore, not only trade issues should be taken into account, but also the new agendas of the 21st century (Actis and Malacalza 2021), such as issues related to information technologies and global value chains, including food and energy. Therefore, the differences between China and the United States transcend the commercial and economic sphere and are inserted in “a dispute of hegemonies for the control of 21st-century technologies, encompassing military and security dimensions” (Rosales, 2018, 1).

Argentina’s positioning in the Sino-American dispute

In the last years, the systemic rivalry between the United States and China has consolidated, following the proposals of Actis and Malacalza (2021a), as the main international policy reference for Argentina. The centrifugal and entropic forces of the predominant bipolarism, as noted by Actis and Creus (2020), coupled with the paralysis of South American multilateralism in various realms of political coordination, as highlighted by Gomes Saraiva and Granja (2022) and Quiliconi (2018), underscores the imperative to reconsider foreign policy as a crucial public policy in the current scenario. Since entering the 21st century, the economic and political reordering had an exponential impact on Latin America in general, particularly in Argentina. Consequently, the current distribution of global power necessitates consideration of a “multiple global order, globalized and where a large part of the dynamics between the actors happen in the Global South” (Fortín, Heine, and Ominami, 2021, 28).

China’s accelerated and sustained international insertion in the region, driven by its high level of economic growth and development, occurred at the same time when the United States began to withdraw and reorient its foreign policy resources from Latin America to the Middle East in pursuit of responding to the most pressing domestic needs (Global War on Terrorism). Such reordering, initiated by the Global War on Terrorism, partly paved the way for China to insert itself commercially, financially, culturally, and politically.

In this context, Argentina was not left out of these effects (Oviedo 2015) and was one of the empty commercial and financial files that China began to occupy. As a result, in the first decade of the 21st century (2002-2012) exports to China grew by 700%, if we take Argentina’s performance from 1992-2002 as a parameter (Oviedo 2015). If in 1990 the United States was Argentina’s main trading partner, since 2010 it has occupied a comfortable third place behind China and Brazil. The two graphs below, based on the Harvard University Atlas of Economic Complexity (2022), reflect the regional importance of the People’s Republic of China in the trade flows of Latin American countries.

Source: Own elaboration from Flourish based on information extracted from the Harvard Economic Atlas.

The axes of Sino-Argentine and American linkage raised are the agenda of critical infrastructure, natural resources, financing, and extra-hemispheric security. At the Sino-Argentine level, Latin America is the second region with the most Chinese FDI, only behind Asia (Merino 2019). Nevertheless, despite the marginal position that Argentina occupies in the total Latin American share of FDI, the main commercial loans are destined for Argentina (See Chart II).

CHART II – Monitoring of commercial loans between China and Latin AmericaSource: The Inter-American Dialogue

Source: The Inter-American Dialogue (Link)

The attraction of Chinese capital in these strategic areas peaked in 2015, and from then on, the number of financial projects began to stabilize and decrease. However, it is important to highlight that the potential of certain strategic sectors of Argentina and the incorporation of China into these dynamics began to be seen by the United States as a threat to regional security in its multiple state visits (Actis and Creus 2020, Merino 2019). This is because the US logic of extra-hemispheric security is not only expressed through its statements about certain strategic infrastructure but also in its majority quota towards the International Monetary Fund (IMF). In this context, the payment deadlines of the next government (see Graph I) express a critical economic situation in which Argentina can improve through greater growth in its exports (see next section), although China’s bailouts via SWAP are also beginning to become increasingly more relevant. Henceforth, financial dependence must be partially reduced by an active and intelligent look at the most important sectors.

CHART III: Payment Obligations 2024 – Argentina

Source: Miguel Castellanos (Head of Latam Research of IIF)

Based on the above, the areas of trade and financial linkages fly over a terrain in which Argentina has deficiencies in being able to build and reach a consensus on a path of macroeconomic stability and the definition of an economic project. In contrast to previous historical moments, where at the beginning of the 20th century (agro-export model) or even in the 1970s (import substitution model) there was a political and economic consensus on what the economic model was going to be (Liotti 2023). Today, however, the lack of political coordination jeopardizes the type of link Argentina has with China or any other type of state of our lack of definition.

In the practical area, the nonexistence of an economic development model, for example, leads to the existence of a pattern of productive primarization ( see Chart IV) that has an impact not only on the added value of the exports but also on the linkages and positive externalities that this can cause.

CHART IV: Level of complexity of Argentine exports to China and the rest of the world (2004-2006 vs 2015-2017)

Source: Bekerman, Dulcich y Gaite (2022)

Model of economic development and foreign policy: two sides of the same coin

Based on the above, it can be argued that the opportunity for Argentine foreign policy is both political and economic. The vicissitudes of its economic development model since the democratic return of 1983, in addition to its strong macroeconomic restrictions, conditioned its foreign policy where ideological divergence was and is currently a central problem.

The dispute for Sino-American global power requires Argentina to adopt an integrationist and pragmatic foreign policy, anchored to a productive development model and the challenges of the 21st century (Frenkel 2015). Nonetheless, the recent inauguration of Javier Milei’s government indicates a lack of a productive and focused perspective on the development model that Argentina could leverage from the knowledge and learning curves within its various strategic sectors.

Consequently, the government has assumed a position where International Relations are unanchored from the link between the nation-states. This statement could be seen as a reflection of the lack of understanding regarding the formation of international markets in their beginnings, as well as the centrality that States have in defining prospective scenarios for the economy based on the most relevant dynamics of the international system (for example, climate change and the energy transition).

Foreign policy must be anchored to the economic development model (Busso 2019). Therefore, the Argentine development model, still immersed in long-term emergencies and short-term solutions, requires proposing State policies to align the country on a path of predictability and federal development: Energy (Oil, Natural Gas, Green Hydrogen, and Photovoltaic and Wind Energy in the NEA), minerals (Lithium, Copper and Rare Minerals), the agro-industrial complex and the knowledge industry (via S&T) as an engine of foreign exchange and economic development. For this reason, the diminished Argentine export capacity at a comparative level (both regional and global) and over time should be a warning point to improve development (See graphs IV and V).

CHART V: Real exports of Argentina (1994-2022)

Source: Juan Carlos Hallak (CONICET-FCE-UBA)

CHART VI: Growth in real exports at a comparative level (2007 vs 2021)

Source: Juan Carlos Hallak (CONICET-FCE-UBA)

It is believed that the concept of “Latin American strategic irrelevance,” as proposed by Schenoni and Malamud (2021) and Russell and Tokatlian (2009), is instrumental in constraining the ability to generate margins of political action for self-reflection on the global stage, while also shedding light on the consequences of foreign policy results in different areas. Consequently, Argentina’s necessity to think of its foreign policy as a facilitated vehicle of greater export, financial, and productive dynamism, added to the learning curves that it incorporated in matters of Regional Security, Human Rights, Science and Technology, International Cooperation, are challenged as a whole by the specific weight of China and the United States in the region.

Therefore, both international and domestic spheres (Putnam 1996), must be thought of simultaneously. Focusing “internally” or “looking inward” risks obscures the international opportunities available to address the political, social, and economic challenges that afflict Argentina. The Sino-American dispute should not impede having more active and “fine-line” diplomacy (Actis and Malacalza, 2021, 189) in regions with extraordinary geographic and consumption potential such as Africa and the entire Asian Axis. The idea of Comini and Frenkel (2017) of “polygamous pragmatism2” is timely and necessary for foreign trade policy to build political ties that provide us with opportunities of all kinds.

CHART VII: Main export destinations – Argentina 2022

Source: Growth Lab/ The Atlas of Economic Complexity (2022)

Argentina’s political and trade missions to countries such as Vietnam, India, and all of North Africa are an opportunity to strengthen and improve export capacity. The erratic macroeconomic trajectory, evidenced in the levels of indebtedness, public spending over total gross domestic product, and the high inflation regime, has as a necessary but not sufficient solution a greater presence of Argentina in global value chains3. Deploying these foreign policy strategies requires a basic but lasting consensus between civil society and the political elite: everything is born in part from what happens “at home.”
Last but not least, that productivist vision and the need to provide added value via investment in S&T and Applied Education in each of the strategic-international areas must have MERCOSUR as a negotiating platform. The political, economic, scientific, and cooperative synergy that was born at a time of domestic vicissitudes must be relaunched by Argentina. In the context of profound transformations and global risks (Beck 1992), it is important to build better and new strategic societies.

Final Thoughts

In conclusion, Argentina, immersed in a delicate economic and social situation, democratically held new presidential elections in 2023. In consequence, the responsibility of the new government requires defining which are the most relevant scenarios and dynamics of international politics and how the country can incorporate itself from them. International Relations, as Actis and Creus (2020) state, has “power” as its guiding principle, which means that the relationships that are woven between the actors are asymmetrical. Strengthening a joint Latin American position, truly knowing the capabilities and dynamic comparative advantages of the economic clusters, and embracing them in a comprehensive and intelligent productive policy through State public policies, is a necessary condition for improvement.

Thus, the presidential inauguration of Javier Milei on December 10 raises a series of questions and challenges in view not only of his official statements during the presidential campaign but also of the mental maps that the current president has of the current international order.

The attempt to oversize Argentina’s foreign policy stance on geopolitically sensitive issues, such as the relocation of the Argentine embassy in Israel, the ideologization of relations in foreign policy, the dilution of foreign policy objectives, and the decapitalization of historically achieved learning curves like the National Council for Scientific and Technical Research (CONICET), along with inadequate backing for strategic clusters, pose significant risks. These dangers loom large in a context that demands discernment, pragmatism, and strong support for foreign policy traditions.


  1. Global Value Chains (GVCs) are a central concept in International Political Economy that describes the fragmentation and distribution of productive activities at the global level. They refer to the process by which the different stages of the production of goods and services are carried out in different countries, thus integrating an interdependent global network. ↩︎
  2. “Polygamous pragmatism” is a concept used by Alejandro Frenkel and Nicolás Comini (2017) that refers to a multiple foreign relations profile, where the deepening of ties between different partners and international policy opportunities is privileged over adherence to a specific country or agenda. ↩︎
  3. If Latin America and the Caribbean accounted for 10.4% of exports of international trade in goods in 1948, by 2022 it will represent only 3.7%. In fact, according to estimates by Marcelo Elizondo, an expert in Political Economy, Argentina was the country with the lowest foreign trade/GDP ratio in the Americas and one of the 5 lowest in the world. ↩︎


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Argentine Foreign Policy …

by Joaquin Gomez Amato time to read: 12 min