Shortly after Milley took office, the internal situation in Argentina began to be turbulent, with several provinces declaring a state of economic emergency, and ** internal chaos was also plunged. Faced with this situation, Milley asked China for help, but China rejected his request outright. This has aroused widespread attention and discussion.
China has always attracted attention on the international stage with its friendly and amiable image. Because of this, Milley's attitude towards China was not friendly before he took office, and he only recently wrote a letter asking for help, which feels a little inauthentic. China responded that it hoped that Milley would reelaborate on Argentina's diplomatic attitude and further clarify the previous unfriendly remarks and actions. After all, cooperation on the basis of respect for equality and mutual benefit is a consistent principle of China.
The economic situation in Argentina is becoming more and more severe. After Milley took office, he quickly carried out a series of reform measures, including cutting ** sectors and reducing the fiscal deficit, which caused serious social unrest. A state of economic emergency has been declared in various provinces, and discontent among the population has intensified.
In addition, Argentina's currency depreciation is extremely problematic. Milley's plan to abolish the national currency and fully adopt the US dollar has led to a growing sense of corporate disidentification with the local currency. In this case, the Sino-Argentine currency swap agreement effectively loses its relevance, as the pesos held by China cannot be used effectively. Moreover, Argentina's policy direction has raised doubts about whether it will be able to repay its debts on time, which has created a great deal of uncertainty for China.
The local currency swap agreement between China and Argentina is not a simple currency exchange, but a form of cooperation to expand credit. Both parties open a line of credit for each other for international **. However, as Argentina's internal situation deteriorates and the currency depreciates, so does the risk posed by this agreement.
The agreement stipulates that both parties will need to repay the currency within a three-year period. However, if Argentina eventually defaults and does not pay back, China's losses will be enormous. In addition, due to the severe depreciation of the Argentine currency, the purchasing power has also been greatly reduced, and the real value of the peso held by China is equivalent to much lower than the original value. In this case, the Sino-Arab currency swap agreement is undoubtedly a loss-making transaction.
As a result, China chose to suspend the Sino-Argentine currency swap agreement and rejected Milley's request for help. This is a rare move in Sino-Argentine relations, and it also reflects China's concern and cautious attitude towards the current situation in Argentina.
Faced with the turmoil in Argentina, Milley asked for help from China, but was directly rejected by China. The decision was not sudden, but was based on China's concerns and risks about the current state of affairs in Argentina. There are huge uncertainties and risks associated with the local currency swap agreement between China and the Arab States, and there are reasons for China to suspend the agreement.
For China, cooperation with international partners can only be long-term if it is based on equality and mutual benefit. Argentina's policy direction and currency depreciation have cast doubt on China's credibility and reliability. Suspending the local currency swap agreement and rejecting Milley's request are options to protect their interests.
In international exchanges, any cooperation requires trust and common goals on both sides. As a responsible major country, China is not wronged, and it will not do business at a loss. Following the principle of equality and mutual benefit, China will continue to cooperate with Argentina and other countries for common development and progress. But in the current situation, China must remain vigilant and cautious.