According to Argentina**, China has suspended a currency swap agreement worth 46.5 billion US dollars (equivalent to 46.5 billion yuan), which caused an uproar in Argentina. Argentine ** Milley personally sent a letter to China, asking China to support and accelerate the currency swap between the two countries and expand the currency swap agreement reached between his predecessor ** and China. However, soon after, the Chinese side decided to suspend the extension of this agreement. The report pointed out that the suspended 46.5 billion yuan is part of the agreement between China and Argentina that has been renewed and expanded every year since 2009, which is one of the rare credit options for Argentina, which is mired in international debt.
This time, China suspended the currency swap agreement with Argentina, which put huge pressure on Argentina. Argentine ** Milley has sent a request to China that China will continue to support and promote currency swaps between the two countries and expand the scale of the agreement reached between his predecessor and China. However, the Chinese side decided to suspend the extension of this agreement shortly after. This is undoubtedly a heavy blow to Argentina, which is mired in an international debt crisis. The $46.5 billion suspended is part of an agreement that has been renewed and expanded annually since 2009, and is one of the few credit options for Argentina, the report said. Why China made the decision to halt has become the focus of attention.
1. The economic policy of Argentina ** Milley has aroused China's concerns
After taking office, Milley quickly implemented a series of economic reforms, including a sharp depreciation of the peso exchange rate and said he would continue to push ahead with a comprehensive dollarization plan. The flurry of moves has left China worried about Argentina's economic prospects. China is concerned that Argentina's monetary policy will have a direct impact on the value of the peso, and that Argentina's interests will be seriously harmed if Argentina could use the renminbi to convert it into dollars to repay its debts after converting it. Therefore, the Chinese side promptly suspended the currency swap agreement to protect its own interests.
One of the aggressive economic policies adopted by Argentina** Milley after taking office was a sharp depreciation of the peso exchange rate and said that he would continue to push forward with a full dollarization plan. These moves have raised concerns in China. China is concerned that Argentina's monetary policy will have a direct impact on the value of the peso, and that Argentina's interests will be seriously harmed by the possibility that Argentina will use the renminbi to convert into dollars to repay debts after converting the renminbi. Therefore, the Chinese side promptly suspended the currency swap agreement to protect its own interests. At the same time, it is also a response to Argentina's economic policy, and the Chinese side hopes to convey its concerns and warnings to Argentina through this move.
2. Argentina's purchase of US fighter jets has aroused dissatisfaction on the Chinese side
Prior to Milley's election, Argentina had engaged in several rounds of negotiations with China in an attempt to buy Chinese Thunder fighter jets. However, after Milley's election, Argentina finally decided to buy American F-16 fighter jets, which undermined mutual trust between China and Argentina. It is believed that China was unhappy with this, so it called off the currency swap agreement.
Before Milley's election, Argentina had held several rounds of negotiations with China in an attempt to buy Chinese Thunder fighter jets. However, after Milley's election, Argentina finally decided to buy American F-16 fighter jets, which undermined mutual trust between China and Argentina. It is believed that China was unhappy with this, so it called off the currency swap agreement.
Milley's swift implementation of economic reforms has sparked discontent among the opposition in Argentina. In his speech, Milley announced a series of reforms aimed at advancing "shock**" and deregulating the economy. However, these reforms sparked massive demonstrations. Tens of thousands of Argentines took to the streets, shouting slogans, **Milley**'s economic policy. They accused Milley of being "**** and trying to surround the Capitol." The instability of Argentine society is a concern for the Chinese side, which is one of the reasons why the Chinese side has called off the currency swap agreement.
The swiftly implemented economic reforms of Millet sparked discontent among the opposition in Argentina. In his speech, Milley announced a series of reforms aimed at advancing "shock**" and deregulating the economy. However, these reforms have sparked large-scale ** activity. Tens of thousands of Argentines took to the streets, shouting slogans, Milley's economic policy. They accused Milley of being "**** and trying to surround the Capitol." The instability of Argentine society is a concern for the Chinese side, which is one of the reasons why the Chinese side has called off the currency swap agreement. The Chinese side is worried that Argentina** will not be able to deal effectively with social unrest and that there may be a situation of political instability, which will have a serious impact on China's interests. Therefore, the Chinese side chose to suspend the currency swap agreement to protect its own interests.
For Argentina, the suspended $46.5 billion is one of its rare credit options in the midst of the international debt crisis. This will further exacerbate Argentina's economic crisis and put more pressure on Milley. In addition, Argentina's currency depreciation is likely to continue to intensify, and the inflation problem will worsen. For China, the suspension of the currency swap agreement could protect its own interests and prevent Argentina from using the renminbi to convert the renminbi into dollars to repay its debts, further harming China's interests. In addition, the mutual trust between China and Argentina has been undermined, which will also have a certain impact on the economic cooperation between the two countries.
The expansion of the suspension of the currency swap agreement will have an important impact on both China and Argentina. For Argentina, the suspended $46.5 billion is one of its rare credit options in the midst of the international debt crisis. This will further exacerbate Argentina's economic crisis and put more pressure on Milley. Argentina's currency depreciation is likely to continue to intensify, and inflation will worsen. For China, the suspension of the currency swap agreement could protect its own interests and prevent Argentina from using the renminbi to convert the renminbi into dollars to repay its debts, further harming China's interests. In addition, the mutual trust between China and Argentina has been undermined, which will also have a certain impact on the economic cooperation between the two countries. The Chinese side is likely to be more cautious about Argentina's economic policies and reduce economic cooperation with Argentina. Argentina** will also face an even more difficult situation, with a debt crisis and economic difficulties.