The agreement, according to Müller, meets the criteria of Chinese investment in vulnerable economies, in exchange for raw materials and market. This is the same model adopted by China in agreements with Angola and Nigeria. In such cases, China has brought all that was needed to lift the works, including manpower. "In financial difficulty, Argentina became the big China's gateway to South America. Brazil could have avoided, and now must act immediately," said the director of Abimaq.Wow.
The president of the Foreign Trade Association of Brazil (AEB), José Augusto de Castro, deplores the fact that the Brazilian government has not included this issue in the last meetings of Mercosur. "If there is tax exemption for imports of Chinese products to these works, Mercosur will be mortally wounded."
Alarm bells should be ringing in the US State Dept, Pentagon and particularly in the UK.
Raw materials in exchange for products.
With the Argentine govt desperate to rebuild its military you can bet that the J-31, armored vehicles and even ships will be flowing to S. America.
Argentina is the gateway? No. Its simply one in a series of countries that are coming under Chinese influence. While the Pentagon is fooling itself with partnership missions, the Chinese are using soft power in the classic sense. They're not seeking to spread their ideology, improve conditions for women and girls or seek to spread democracy...they only seek to increase their influence via the old fashioned barter system (not some fraudulent "gloablization scheme").
What an adult way of dealing with other nations.
J-31 no... not by long, long time. But Argentina Air Force is an mess, they never get back after beating Brits give them. Some time ago they had an "dream" they they will modernize it's forces or rather rebuild with help of Brazilians and Gripen NG. But veto of GB and possible veto of US put those "dreams" to bed. Now... how you can get a more or less modern and cheap fighter that don't be blocked by any weapons sanction?
ReplyDeleteFor some time analysts ring one bell... the JF-17 boys, the JF-17!
its said that the Chinese are building the J-31 for export. name a country where that airplane would make a bigger splash, get more attention and put a close ally to the US in a position of questioning its own airpower more than Argentina?!
Deleteits the perfect country to roll the plane out to the international market place. comparisons will be immediately made between the J-31 and the Typhoon. defense papers and mags will go crazy war gaming a possible meeting of the two in combat.
in other words Argentina is the perfect country to get advanced Chinese weapons. additionally everyone knows that Argentina's economy is a basket case. if they can afford the J-31 then the Chinese really are friends and will sell it for cheap. a cheap 5th gen jet? the US will be going crazy. suddenly stealth is worldwide and the advantage isn't going to just friends and allies but to anyone that wants to call China friend. last but not least air defenses will have to be upgraded because the already short engagement distances will be halved again.
win win for China/Argentina. lose lose for the US and here allies.
I doubt in the J-31 as it is a... how to tell that, without a perspective of potential buyers. We already know that in theory the PLAAF is not interested in it, then there is not too much founding from gov' in to that plane. The factory can't put too much cash in it and it is in again a "theory" inside project. There is also not too much development in that plane, I have a feeling that it will end with only two or three prototypes and that's it. But of course I can be wrong...
DeleteArgentina is almost a bankrupt, they don't have the cash to modernize it's own failing air force, sanctions kick there balls too many times now. Even if J-31 will enter any type of service and when it will be for sure a lot more cheaper then anything "west" can product it will be still too high price for Argentina. But JF-17 it is not only cheap, it's also simple... something that can be buy by rather large number and put the Argentinians back on the air feet's. It is also pretty modern, not top line but still a much better they have now.
The Argentina with rebuild Air Force can mess things up there, especially for Brits. But the J-31 will be not available for long time and JF-17 are ready to go... why not also a license?
Indonesia would make more of a splash... they are already looking at the SU-35, why not the J31. Especially when Oz on their doorstep buying 5th gen F35, 12 subs, 3 Destroyers, 8 New Frigates, Awacs, LHD's and the rest...
DeleteFor now they buying more F-16's I have my doubts if they would go in to "partnership" with China, especially with the tension between them on the sea.
DeleteArgentina has gone full socialist and as such Kircher has totally broken her nation making it unsustainable economically. They have taken loans everywhere they could and defaulted. China may do some barter trade goods for raw materials but it will be no super deal for either party unless china starts selling them goods on the arm which will just set themselves up for the same fate as those previous. J-31, tanks and other equipment being sold on credit to a failed default debtor state is no strategic gain. Maybe in the very short term but in the longterm it will only leave China with a ally totally dependent on Chinese military assistance on credit never to be paid plan in return for a ally that will bring no advantage because they cannot afford to train there army, after all Kircher needed some extra vote buying walkin around money.
ReplyDeleteThe Chinese are following the ole Soviet alliance scheme. The problem is it looks great on paper but you end up with a bunch of useless money pits that can barley prop up the tin horns or broken regimes that run them. The US system is slower has less and maybe less guaranteed allies but they are not rolling debts and usually balance another regional power so all we have to do is be the power balance swing.
Argentina is broken economicaly every couple of years in past couple of decades and there is nothing socialist about it.
Deleteexplain please.
DeleteArgentina gets regularly raped by the IMF, just like a lot of other countries. Predatory banking at its finest.
DeleteChavez light. Nationalize the airline, nationalize the pension fund everyone's (nice piggy to tap), constant class warfare rhetoric, state mandated price controls on many basics that makes business non viable (must break it first giving people impression of failure), excessive over regulation while at the sametime no regulation if you know wink the right people (the biggest lie of socialism the politburo ruling class fighting for the people against the evil rich as they shift huge portions of that evil wealth onto themselves/family).
DeletePost 50-80 the Socialist learned radical violent rapid revolution doesn't work people remember the fruits of capitalism and fight back once socialism bears the fruit it does historically. Instead through the gov by election they take it in steps with the goal of making private enterprise non viable leaving gov control as the "fix". They use the tools of state regulation, gov intervention, taxes, and rhetoric (class warfare straw men arguments) to get it instituted. Once X business fails they then use failure to justify takeover or if people not ready see above rinse repeat another cycle.
This modern tactic while still bearing the fruit of socialism's massive failure, it has shown more sticking ability.
SandWyrm- That is just garbage no one forced them to spend money they didn't have, and no one forced them to agree to the loans. The people elected those leaders to represent them and so are responsible for their decisions in their name. There is no such thing as predatory lending unless you are part of the operating retard class that cannot understand if you buy stuff on the credit card and only pay the interest payment you will never pay it off and shocker if you miss a payment your your principle grows. Leaders of nations or basic competent citizens should be able to 1)read a balance statement hell make a balance statement, 2)understand priorities "wants", "needs", "requirements", 3)make the hard decisions of sacrifice to beget longterm survival.
Sidenote I would also counter that if you researched most "predatory lending" even among the most ignorant are predatory, but the opposite of your belief the people taking the loans fully understand they will never be able to pay but at the sametime are more than willing to take whatever they can get with no intention to ever repay it. To then flip that reality into victim hood is class warfare propaganda at its best (tenant regardless facts rich people are evil).
Sol, no way that is happening. The situation in Argentina is dire. The inflation is over 40 percent (I am typing this from the airport in Buenos Aires). Restaurants change menus weekly to adjust prices upwards, as do all stores. I have yet to meet a single person in the country who likes Kristina Fernandez de Kirchner (although many admitted they voted for her in the past. Elections are coming up in October of this year. Just this week the shortages have started to get worse. There are now no tampons in the country (a bloody problem) http://news.yahoo.com/argentina-tampon-rumpus-says-troubled-country-203348388--business.html
ReplyDeleteBasically what is happening is the currency is artificially high, and access to dollars is restricted. You are not allowed to import something if it is not matched with an export of equal value. This creates shortages of consumer goods. If they devalue (which they should) it will relieve the shortages but inflation will go even higher. Basically there are no good options. They simply do not have the financial ability to rebuild their military.
disagree. first China is more than happy to provide all the little widgets gadgets and necessary goods that Argentina needs. second the Chinese can afford unaffordable money pits because they can use US investment in their country to do it. the Chinese can provide loans which will drive the Argies deeper into their camp with the joy of knowing that others in trouble will want similar deals. when US companies come sniffing around for that new market the Chinese have it wrapped up. as far as rebuilding...consider it a gift from the Chinese people to help them defend themselves against an overly aggressive UK.
Deletei believe that this has ramifications. the Chinese don't take a shit without having a plan. so what else could the plan be?
Actually William, that is where the barter trade comes in very handy, you're not dealing in currency which I admit for Argentina is a lose-lose proposition, but resources that are priced in the Chinese market, which is higher. You don't have to be more expensive than anyone else to earn money this way, all you need to do is be cheaper than the normal supplier, which might not mean profit for China, but cost savings. Basically, it's profit by the back door. Don't raise the value of your goods, lower the cost of your material.
Deletethats exactly what i was trying to get across in a terrible way. additionally why do we not believe that China isn't seeking to get a larger market share of their defense related products worldwide? consider it a lend lease without the need to repay them? but if i'm wrong then where is the benefit to China? they're setting up these type deals worldwide. it can't be just about commodities. there has to be more to it than that. what is it?
DeleteI agree with your point Solomon. China can take advantage of the situation like in Africa propping up failed states in return for access to resource strip X nation. The tactic is as old as man and one of the most successful examples being the British empire colonial system. China currently only backs its clients via military support and political top cover but with China's expeditionary type forces bearing fruit it will just be a matter of time before China goes ole school with direct involvement of course to protect their citizens as cover.
DeleteAll I was saying is that system doesn't make real allies that contribute just clients that either wash balance, or give a slight advantage to some national industry.
Eitherway I don't think Chinese weapons will change the balance of power or help Argentina in any way. Ole school colony type client states only work when the host can get resources at a heavily discounted rate to make the "no return assistance loans" profitable. That means for the politicks to get the resources needed to stay in power they will have to sell the peoples resources short resulting in more required to stay in power etc... rinse repeat until collapse. Today's internet world makes such systems longterm failures because unlike during the 1800's those peasants in the colonies have knowledge of the alternatives and that just stirs the agro pot raising maintenance cost until the colonial power crosses the red line on the return balance.
No, you are misunderstanding what the Chinese are doing. They are not giving the Argentines widgets for free. They are receiving soybeans and corn (used to feed livestock in China) along with beef in exchange for widgets. China is losing self sufficiency in grains and beef because agricultural land is getting turned into new cities for housing. The transition there from agricultural to urban cities is the largest the world have ever seen. The Chinese ability to finance projects abroad has nothing to do with US investments in China. The reason they have so much money is because Chinese savings rates are so high, so by definition their banks (which are government controlled) are always looking for ways to put the money to work. This article is old but the underlying issue hasn't changed at all. http://www.washingtonpost.com/world/asia_pacific/getting-chinese-to-stop-saving-and-start-spending-is-a-hard-sell/2012/07/04/gJQAc7P6OW_story.html
ReplyDeleteUS companies have a hard time in Argentina because we export what they also export (grains and commodities) so it is not a natural fit. Also you cannot simply export a product to Argentina or Venezuela or any of these socialist countries with capital controls. If Caterpillar wants to sell a piece of machinery to Argentina they have to find a way to import a product from Argentina of equal value. Otherwise the Argentines would have to buy dollars to pay for the machinery which would push up the dollar vs the peso and create more inflation. That is why there is so little trade happening. Very few countries attempt something like this, hence why it is so foreign to us.
The barter also allows Argentina (and China) to avoid settlement in dollars. Which keeps the banksters out of the transactions. Something very similar to what pre-war Germany did.
DeleteThe UK did $24 billion worth of trade and investment deals with China last summer during Premier Li Keqiang's visit, President Xi is due to make a state visit to the UK later this year, should we be worried?
ReplyDeletein my opinion yes. China does not negotiate from a position of weakness, does not seek accommodation and will seek leverage. at least that's what i've seen from them in the negotiations i've paid attention to.
Deletebe careful UK. they rolled Obama like a cheap cigar. they'll be looking to do the same to you.
China plays a smart game as it is not trying force things like is the custom with the most other powers.So local Politicians can deal with Chinese without fear of being backstabed and becoming a target of regime change at first oprotunity..
ReplyDeleteThey're not an ideological nation anymore. They remind me more of the pragmatic power-seeking that defined the old British Empire.
DeleteUnlike the US, they don't see the need to convert the world to their own (largely schizophrenic) ideologies, because they don't really have one. Which makes them more of a rational actor.
The big issue here is Brazil and Mercosur.
ReplyDeleteThis could do be viewed as China infringing on both the Falklands and Monroe as pay back for messing in their back yard.
But its not, or its not the main reason
China is activly breaking open closed markets, mercosur is a closed market like the EU and NAFTA
Argentina is sidestepping it, which Is bad news for Brazil, the regional hegemony.
Better Argentina than Sri Lanka, if you know what I mean.
ReplyDelete