The overarching fiscal policy introduced by Argentine Milley had an immediate and huge impact on the domestic economy.
The policy, announced by the new Minister of Finance, Luis Caputo, has sharply adjusted the official exchange rate of the peso, causing it to fall sharply against the US dollar from 137 pesos per dollar to 800 pesos, which amounts to a one-time depreciation of 54%.
At the same time, the central bank has lifted a series of exchange controls that have restricted capital outflows, and has pledged to continue to depreciate the peso by at least 2% every month in the future.
As soon as the news was announced, Argentina's economy and society immediately experienced violent turmoil. According to reports, in just 24 hours, prices across the country have skyrocketed at an alarming rate, and the increase in some daily necessities and daily necessities has even exceeded 100%.
Not only that, but there has also been a frenzied hoarding and price increase in merchants and supermarkets, and many necessities are in short supply, and people are forced to panic buy.
In the face of doubts from all walks of life, Millet explained that the purpose of the currency devaluation is to make Argentina's agricultural products more internationally competitive and increase exports, as Japan once did.
He also claimed that there was high inflation in Argentina before, which was just a "strong medicine" for the economy. However, this "shock**" has proven not only not to have the desired ** effect, but has instead made Argentine society even more chaotic.
Ordinary people have begun to sell pesos across the board and turn to the black market to trade dollars, and there has even been a return to the original state of barter. Some regions are already on the verge of full-blown social unrest.
At the same time, Milley is also under tremendous pressure internally. Trade unions and other social groups have warned that Milley's economic policies will completely destroy the country and that an urgent meeting must be convened immediately to discuss remedies.
Milley's spokesman, Adorni, insisted that this was only the first step in the implementation of the "package", and that more new policies would be introduced in the "shock". He believes that the economic situation will improve significantly in the coming weeks.
However, in fact, Milley's "shock**" is more like pouring cold water on the head of Argentina, which has a relatively fragile economic foundation. Relying solely on unilateral currency devaluations to enhance the competitiveness of agricultural products is too idealistic and arbitrary.
Milley urgently needed to find a stable source of external financial and material resources to help Argentina through the transition period of declining output and volatile prices. So when he realized that he couldn't reverse the economic downturn on his own, Milley immediately turned his attention to China.
As spokesperson Mao Ning pointed out, China and Argentina are both representatives of large developing countries and emerging economies, and the economies of the two countries are highly complementary and there is a lot of room for cooperation.
Milley wrote a letter to China**, requesting that the progress of local currency swaps between the two countries be expanded and accelerated, in fact, hoping that China would provide more stable funds to support its economic policies.
It should be noted that the local currency swap agreement between China and Argentina is an arrangement between the central banks of the two countries and has nothing to do with the commercial exchange rate, so it will not have a negative impact on China due to the depreciation of the Argentine currency. Instead, Milley expects China to provide Argentina with the money it needs to tide over the storm at a critical time.
Milley's move can be seen as a comparison of the economic strength and political will of China and the United States. After winning the first prize, he flew to the United States for support as soon as possible, but the White House did not pay enough attention to it in the end.
There has been no substantial breakthrough in relations between the two countries as a result of Milley's statement. Disappointed, Milley immediately turned to China, hoping to reap tangible benefits from strengthening bilateral economic ties.
Although Milley had shouted anti-China slogans to win votes before, when faced with real domestic pressure and difficulties, he still had to admit that only China had the strength and willingness to lend a hand.
As a result, Milley's attitude toward China has softened markedly, and he even thanked the Chinese special envoy for his presence in his inaugural speech and said that he would continue to uphold the one-China principle.
However, China remains cautious about Milley's new economic policies and requests for help. Although China has always pursued the principle of pragmatic cooperation with developing countries to achieve mutual benefit and win-win results, Milay's current behavior will inevitably raise doubts about its effectiveness.
On the basis of taking into account the actual situation in Argentina, China will be cautious about Milley's request for cooperation. After all, the "package" in Milley's mouth remains to be seen, and there may be more uncertainty about the Argentine economy in the future.
All in all, the ultimate direction of China-Arab relations is still full of uncertainties. China's help and support also require Milley to promote reform in a responsible manner and achieve mutual benefit and win-win results.