Argentina's Milei Reaffirms China Trade Commitment at Davos Amid US Financial Support

Milei's Pragmatic Stance at World Economic Forum

At the recent World Economic Forum (WEF) in Davos, Switzerland, Argentine President Javier Milei underscored his country's continued commitment to trade relations with China. Speaking on January 22-23, 2026, Milei characterized China as an 'essential partner' and a 'great trading partner,' emphasizing the economic necessity of engaging with Beijing. This declaration signals a pragmatic approach to foreign policy, balancing ideological alignments with economic realities.

During his campaign, Milei had adopted a critical stance towards China, even referring to its government as an 'assassin' and vowing not to trade with 'any communist country.' However, his rhetoric has since moderated, with the President acknowledging China as a 'very interesting trade partner' and expressing pleasant surprise regarding the evolving relationship. He articulated his belief that Argentina does not have to choose between the United States and China, stating, 'I want an open economy. And if you look at the weight of China in the world economy, you will understand that I need to trade with China.'

Navigating US Financial Lifeline and Chinese Economic Ties

Milei's reaffirmation of trade with China comes in the context of substantial financial support from the United States. The US has provided Argentina with a significant financial lifeline, including a $20 billion currency swap from the US Treasury and an additional $20 billion in private-sector loans, totaling $40 billion. This aid package was reportedly aimed at stabilizing Argentina's economy and countering China's expanding influence in the region. Furthermore, Argentina has received additional support, including a $14 billion loan from the International Monetary Fund (IMF) earlier in 2025, and an additional $42 billion from other international financial institutions largely controlled by the US.

Despite this Western financial backing, Argentina's economic ties with China remain robust and crucial. China is a primary trading partner for Argentina, with significant investments across various sectors, including:

• Infrastructure projects
• Energy
• Mining, particularly lithium

Bilateral trade has seen considerable growth, with Argentine exports to China and imports from China increasing significantly over the past two decades. In June 2024, China renewed a currency swap agreement worth $5 billion (35 billion yuan), valid until July 2026, which played a role in helping Argentina meet its obligations to the IMF. Argentina also joined China's Belt and Road Initiative in 2022.

Argentina's Geopolitical Balancing Act

President Milei's strategy reflects a complex geopolitical balancing act. While ideologically aligned with the US and figures like Donald Trump, the economic realities of Argentina necessitate continued engagement with China. The US has openly expressed its desire to reduce China's presence and influence in Argentina, particularly in strategic sectors. However, given China's role as a major creditor, investor, and trading partner, completely severing ties would be economically challenging for Argentina. Milei's statements at Davos highlight his administration's intent to pursue an open economic policy that engages with multiple global powers, prioritizing Argentina's national interests and economic recovery.