SHARP POWER Rising Authoritarian Influence CHAPTER CHAPTER 1 2 Sharp Power: Rising Authoritarian Influence Navigating Political Change in Argentina By Juan Pablo Cardenal1 CHINA INTRODUCTION China’s inroads in Argentina have been truly remarkable during the last five years. In that time, China has established a presence in almost every sphere of life in the Latin American country. The economy is the most obvious one: Bilateral trade reached US$14.8 billion in 2016, while a combination of Chinese loans and investments is behind some of the most vital national projects of the coming years. Politically, ties between Buenos Aires and Beijing are experiencing a golden age, even after elections at the end of 2015 swung power from one end of the political spectrum to the other. An informal indicator of the growing relationship between China and Argentina is the Chinese community of roughly 180,000,2 which began to migrate in significant numbers to Argentina less than three decades ago and has already become Argentina’s fourth-largest immigrant community, and the largest from a non-bordering country. Notably, the second generation of Chinese-Argentines is taking on a more prominent role in Argentine society. Having developed strong economic and political ties with Argentina, the Chinese government is now more active in areas where it traditionally has been less likely to be involved. “To consolidate their position in the country, they cannot look scary,” explains one China analyst in Buenos Aires. Thanks to its own form of soft power,3 China is more visible than ever before: It holds greater sway over the local media; it has built up strong links with the academic community, including a net- work of devoted scholars; and it monopolizes almost every aspect of Chinese culture in Argentina. More concretely, Beijing closed deals with some of the main media groups in the country, particularly under former president Cristina Fernández de Kirchner, and is taking the first steps toward gaining visibility on Argentine television. In the academic sphere, more than 25 Argentine 37 NATIONAL ENDOWMENT FOR DEMOCRACY | INTERNATIONAL FORUM FOR DEMOCRATIC STUDIES CHAPTER 2 Navigating Political Change in Argentina universities and academic institutions have cooperation and exchange programs in place with Chinese counterparts, while eighteen others offer studies on contemporary China. Culturally, the Chinese embassy has taken control over Chinese New Year celebrations in Buenos Aires, an event that reaches out to the general public and attracts several hundred thousand people every year. In addition to all of the above, China’s steady penetration of Argentina is also linked to Beijing’s effective people-to-people diplomacy. Influential elites of all fields now have connections with Chinese peers and are regularly invited to visit China, too. Another good indication of China’s efforts in Argentina is how active the Chinese ambassador has been in personally pushing China’s soft power agenda. Since presenting his diplomatic credentials in September 2014, Ambassador Yang Wanming has visited local newsrooms eight times, authored fourteen op-eds, and granted ten interviews to lo- cal media. He met with executives and participated in events organized by foundations and think tanks 21 times, and engaged personally with universities at least five times. Yang held meetings with representatives of political parties eight times and also paid no less than fourteen visits to members of Congress. He also hosted official receptions in China’s embassy in Buenos Aires, attended a number of seminars, and met with representatives of different business chambers.4 In this context, the development of closer ties with China is generally well-accepted and faces little resistance in Argentina. Domestic politics are key in understanding why this is happening. General elections at the end of 2015 resulted in a major shift of power. Up to that moment, president Cristina Kirchner and, previously, her husband Nestor Kirchner, had cumulatively been in power for twelve years, a time during which the society became increasingly polarized. The Kirchners’ populist and protectionist economic policies ended up severely hurting the country’s economy and finances. This coincided with Argentina’s disputes with the West over repayment of its debt, which further isolated the country internationally when its access to international financing was cut off. This was a crucial factor that spurred Argentina to break away from the Western orbit, moving closer to China and other authoritarian countries such as Russia, Iran, and Venezuela. Dip- lomatic ties between Argentina and China intensified at the same rate that Argentina’s rela- tionship with the United States and Europe deteriorated. This was consistent with Beijing’s decision to upgrade the bilateral relationship in 2014, when Argentina became one of only five Latin American countries to enjoy a comprehensive strategic partnership with China.5 In the final months of Cristina Kirchner’s mandate, more than thirty agreements and memoran- dums of understanding were signed between the two nations. Some of these deals were highly controversial, including a fifty-year concession to build and run a space facility in the country’s remote West, China’s first such facility in the Southern Hemisphere.6 At that time, Beijing had already provided US$20 billion in loans to finance a handful of large- scale infrastructure projects.7 In the eyes of Buenos Aires, China was not only a key economic ally, but was also perceived as an ideological alternative to the West. However, critics cautioned that the Kirchner administration had become utterly dependent on China financially and that the country could end up paying a high price for such dependency. Argentina’s trade deficit with China soared too, and in the months ahead of the 2015 presidential election, China was caught in the crossfire of the nation’s political fight. The controversy reached a high point when the winner of the election, Mauricio Macri, issued a clear warning to Beijing: the late deals 38 NATIONAL ENDOWMENT FOR DEMOCRACY | INTERNATIONAL FORUM FOR DEMOCRATIC STUDIES CHAPTER 2 Navigating Political Change in Argentina signed between Argentina and China under the Kirchner administration would be reviewed as soon as he took office.8 Just after Macri’s victory, it was in fact expected that Argentina would put some distance between itself and China, while it moved closer again to its traditional American and European allies. However, the Kirchner government had agreed to a cross-default clause in the contract signed with China’s Development Bank to secure funding for the Kirchner and Cepernic hydro- power dams that significantly limited Macri’s room to manoeuvre.9 Now, almost two years into his presidency, Macri has re-established normalcy in Argentina’s relationship with the West, but there have not been any signifi- cant reversals on most of the major agreements adopted during the previ- ith very few ous Kirchner administrations. As a result, the Macri administration benefits exceptions, the from now having more international partners and can be freer in how it W frames the country’s relationship with Beijing. During Macri’s official visit political class in Buenos to Beijing in May 2017, both presidents signed a number of new deals, Aires seems to agree that a and a few older ones were ratified. As far as Buenos Aires is concerned, closer relationship with China remains a key player for its future development and well-being. The bilateral relationship is now cruising nicely. China is necessary for Argentina’s economic With very few exceptions, the political class in Buenos Aires seems to agree that a closer relationship with China is necessary for Argentina’s economic development. development. They argue that there is no bigger export market than China for the country’s commodities, particularly soybeans and other agricultural products. They refer to the fact that Beijing is ready to provide loans and investments, unlike traditional investors that regard Argentina as overly risky. They also perceive China as the only partner that can potentially finance and build the key infrastructure that is needed for the country, including railway networks, hydropower dams, or nuclear plants. Very few Argentine experts interviewed by this author mentioned potential risks—for example, economic dependency or weakened democratic principles—that Argentina might face in developing a closer relationship with China. Likewise, the author did not observe any significant public debate taking place on these themes in the mainstream local media. Asked if China’s corruption or human rights record should be taken into account in the bilateral relationship, Argentina’s political class has commonly taken refuge in pragmatism: “It would be stupidity and suicide for Argentina,” one congressman said.10 This sentiment among Argentina’s ruling class is significant because it influences opinion in other areas of society. But it is also rel- evant to acknowledge that this frame is not unconnected to Beijing’s people-to-people diplomacy, which finds fertile ground across Argentina’s political spectrum. During the last few years, the Chinese Communist Party (CCP) in particular has been extremely active, and successful, in engag- ing with top representatives of Argentina’s main political parties, without ideological distinction. The CCP has not only cultivated close ties with the kirchneristas and other left-wing parties, but has an equally warm relationship with the center-right Republican Proposal (PRO) party that it had developed before Macri’s election. Even if a shared political ideology is less import- ant to such relationships than it was in the past, it is still striking to see how far PRO’s com- radeship with the CCP has gone, given that the two parties’ political ideologies reflect opposing ends of the political spectrum. Senior representatives of both parties met on four occasions in 2016, and twice more in the first half of 2017.