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Economic Challenges and Policy Directions in the Biden Era

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The incoming U.S. presidential election is an issue of major global concern; this is because the winner will not only affect domestic affairs in the United States, but will also determine the relationship between the U.S. and the rest of the world. A follow-up study of the ANBOUND 100+ Team shows that six key states, including Florida and Pennsylvania, will decide the fate of Donald Trump in this election as Donald Trump’s polls are at a disadvantage. The statistics indicate that unless some black swan event completely reverses the trend, it is unlikely for Trump to be reelected, while Joe Biden has a higher probability of becoming the 46th President of the United States.

In the event that the Biden era does come, it will undoubtedly bring about a host of changes in the U.S. foreign policy, geopolitical competition, the participation of the U.S. in global multilateral issues, and U.S.-China relations. In a previous analysis concerning U.S.-China relations in the Biden era, ANBOUND points out that the Biden administration will adjust the Trump administration’s extreme policies in multiple ways. During the presidentship of Trump, U.S.-China relations were basically determined by Trump alone. Should Biden become the next POTUS, even if the tough and antagonistic nature of the U.S. against China remains unchanged, it will still lead to a more regular and predictable framework, and we might see the slowdown or even the halt of the U.S.-China trade war.

For the global market, what matters the most is the economic policies that would be implemented in the Biden era and their impact on the world economy, hence the emergence of what is touted as “Bidenomics”. What economic challenges will the Biden era face? What are his priorities in the economy? To answer these, The Economist has recently listed several important issues that Biden needs to pay attention to in one of its feature articles.

First of all, Biden needs to pass a huge “recovery” bill in Congress. Some market analysts estimate that the United States needs US$ 2 trillion to US$ 3 trillion, which includes short-term stimulus funds to support unemployment insurance and help state governments and other local governments to cope with the budget hole. Biden also needs to provide grants or loans to small businesses that have not received as much aid as large firms. Other than that, it would also be necessary for Biden to ease tensions with China to appease the market. If vaccines for the novel coronavirus are out, Biden will need to adopt a co-operative attitude rather than a transactional approach in diplomatic relations. This will make it easier to share vaccines globally while facilitating the reopening of borders and the restoration of trade.

Biden’s economic recovery bill also needs to target those “build back better” projects, such as the United States’ underinvestment in large-scale infrastructure projects (the average American bridge’s age is 43 years). These are not only long-term issues that the United States needs to resolve, but they should also be Biden’s priorities. Scientific research investment is also an important aspect. The U.S. government’s investment in research and development (R&D) needs to be increased. R&D in the United States accounted for more than 1.5% of GDP in 1960 and has now fallen to a mere 0.7%. The Biden administration will need more R&D investment in technology and renewable energy. Biden would also want to undo Trump’s immigration policy that hurts the competitiveness of the United States, and to improve the living standards and social mobility of the middle class. This means that the United States must invest more in education, health, and housing. In addition, the United States needs to raise the minimum hourly wage to US$ 15. Currently, 17 million Americans earn less than the minimum wage.

In order to support the above-mentioned spending plans, Biden may need to increase taxes and reform fiscal policies. Assuming that the aforementioned spending plans can been acted, the combined annual public expenditure growth is equivalent to 3% of GDP. To this end, Biden needs to raise taxes to cover about half of the approved expenditures and impose higher taxes on businesses and the wealthy. Studies have shown that Biden’s tax increase policy may reduce the after-tax profits of companies by as much as 12%, while the income of the top 1% of the rich may drop by as much as 14%. In order to maintain financial sustainability, Biden will also be unable to escape the practice of expanding the deficit. Research by the Congressional Budget Office shows that public debt will reach nearly 200% of GDP by 2050. There seems to be no reason to worry in the short term, because interest rates in the United States are close to zero and the Fed is buying government debt. However, in the long run, the U.S.’ ever-expanding debt will eventually damage America’s national strength.

Some analysts believe that if the next POTUS can overcome this long-term challenge, the United States will greatly benefit from it. This means that the United States will begin to establish a consensus on stronger fiscal constraints based on welfare spending and sustainable taxation. However, researchers at ANBOUND believe that with the current U.S. economic model, it may be difficult to get rid of the expansion of debt issuance and the increase of deficits.

If Biden wins the election, a guaranteed change would be the adjustments in trade policies. The smooth operation of international trade is the most profound and typical manifestation of globalization, and Trump has alienated the U.S., causing the country to be criticized by the world. Biden on the other hand, has a record of supporting free trade. Although he will not immediately abolish the tariffs imposed by the United States, he needs to reduce U.S. trade protectionism, as well as establish and manage a new framework for economic relations with China.

Biden will also need to return to multilateral co-operation on issues such as global climate change. He has previously demonstrated his strong will in this regard, saying that he would return to the Paris Agreement on the first day after taking office. The global climate issue is a rare multilateral issue that transcends ideological and geopolitical disputes, and China is beginning to play an increasingly important role in it, whereas the European allies of the United States attach greater importance to multilateral cooperation on global climate issues. If the Biden administration wants to reverse the Trump administration’s extreme practices, it would need to be take a cooperative stance regarding global climate change as soon as possible.

Final analysis conclusion:

The results for the U.S. election will soon be announced. Judging from the polls so far, it is most likely that Biden will emerge victoriously. If Biden is to be in charge of the White House, we will witness the emergence of “Bidenomics”. The main problems and key challenges “Bidenomics” faces will determine the direction of Biden’s future policies to a considerable extent, which will also go on to affect the rest of the world.

Mr. He Jun takes the roles as Partner, Director of China Macro-Economic Research Team and Senior Researcher. His research field covers China’s macro-economy, energy industry and public policy

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Air Balloon and U.S.-China Relations

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Credit: Petty Officer 1st Class Tyler Thompson/US Navy

The story of the Chinese Automatic Drifting Balloon (ADB) violating the U.S. airspace in late January–early February 2023 will be a symbolic marker for a new phase of deterioration in the US-China relations.

The relations were rapidly eroding throughout 2022 and early 2023. In some aspects, U.S.-China relations in 2022 evoked obvious associations with U.S.-Russian relations in 2021. While trying to engage in cooperation with Beijing on certain issues (particularly on Ukraine), Washington simultaneously kept imposing increasingly painful sanctions against the country.

Among important steps recently taken in this direction, there have been restrictions on supplies of advanced microchips and equipment for their production to China, effective since October 2022, as well as the pressure exerted on Japan and the Netherlands (key manufacturers of equipment for the microelectronics industry) to join these restrictions. Licenses to supply virtually any components and equipment to China’s Huawei have been terminated, and a significant number of sanctions were imposed on smaller Chinese companies and individuals.

Most of the Chinese measures have been defensive and involved steps to ensure the security of production chains and the national economy. In the meantime, Beijing is also discussing measures to limit certain items of Chinese exports, with potential thermonuclear consequences. Semi-finished products, raw materials and equipment for the production of solar panels can be affected—given China’s monopoly on a number of products, this could be a shock for the renewable energy industry in the West.

The visit of U.S. House Speaker Nancy Pelosi to Taiwan in early August 2022 played a disastrous role in the military and political situation in East Asia. That trip, despite repeated warnings from Beijing, triggered a period of rapid increase in Chinese military activity around Taiwan, which still continues.

Chinese activities include numerous live-fire exercises in the waters around the island, large groups of combat aircraft and drones flying along the island’s perimeter, and systematic violations of the median line in the Taiwan Strait by PRC ships and aircraft. For its part, the U.S. is increasing military aid to Taiwan, although it is becoming increasingly difficult to do so against the backdrop of ongoing hostilities in Ukraine.

The November 2022 meeting of Xi Jinping and Joseph Biden in Bali was similar in content to the Geneva summit of Biden and Vladimir Putin in June 2021. We saw similar attempts to achieve at least partial stabilization of relations, establishing rules of the game, unblocking channels for political communication by creating joint working groups, and the same predictable failure. So far, we can only hope that the final outcome of these efforts will not be so disastrous as the one between Moscow and Washington.

The U.S. Secretary of State Anthony Blinken’s visit was canceled due to the balloon incident, while it was supposed to restore the ruined channels of dialogue. The U.S.-Chinese relation is still lagging far behind the U.S.-Russian relationship in matters of mutual alerting, preventing dangerous incidents, and maintaining emergency channels of communication, where relevant experience has continuously been accumulated since the 1960s. Given the rapid progress of China’s transformation into a new nuclear superpower, conservation of this situation could be dangerous.

Nothing more was expected from Blinken’s visit – no U-turn in relations, no strategic deals, including those concerning Beijing’s positions on the Ukrainian issue. Now, the visit has been postponed indefinitely and the dialogue has been suspended amid the rapidly deteriorating security situation in the Pacific.

The circumstances of the very incident with the Chinese ADB over the United States allow us to take a fresh look at the behavior of China’s leadership in the heating confrontation with the United States. According to U.S. military statements, the ADB shot down on February 4, 2023 was the fourth Chinese apparatus to violate U.S. airspace. The previous three ADBs that visited the U.S. during Donald Trump’s tenure were not detected by U.S. airspace controls in time, and the Americans became aware of their existence belatedly via intelligence channels.

If this is true, China is deliberately and systematically doing what the USSR never afforded during the entire Cold War—flying reconnaissance aircraft directly over U.S. territory. For its part, the U.S. used ADBs on a large scale for flights over the USSR and the PRC in the 1950s and 1980s, and the explanation of their purpose was exactly the same as that used by the Chinese now: border violations due to navigation error or malfunction, meteorological research, observations of airstreams, etc.

China’s contemporary political culture attaches great importance to careful observance of the principle of reciprocity, avoiding situations that could be interpreted as Beijing’s recognition of its unequal position vis-à-vis any major power. This is partly due to the severe historical trauma of the “century of humiliation” in 1840–1945, a time of foreign domination over China.

The current use of the ADB over the United States is by no means a retaliation against historical grievances. Rather, it is a response to some U.S. actions within its “freedom of navigation patrols” in the South China Sea, where U.S. ships and aircraft deliberately violate 12-mile territorial water zones around a number of Chinese-controlled islands. The Americans justify their behavior by saying that these Chinese islands are artificial and do not create rights to territorial waters.

Surely, China believes that the Americans are violating the integrity of its national territorial. From China’s perspective, the U.S., as a power external to the region, should not interfere in any of its territorial disputes with the countries of Southeast Asia. Besides, the high activity of U.S. reconnaissance aircraft along China’s borders—and sometimes over disputed water bodies—has long been a matter of Chinese concern.

From China’s perspective, the use of ADB over U.S. territory may well look like an appropriate response to the U.S. actions. Chinese leaders may have seen this action as a necessary step to confirm China’s status as a great power equal to the United States, even if only a limited number of people knew about these operations for the time being.

The political motivation behind the use of the ADB can also be discerned in the Chinese response to the incident. In a normal situation, if the balloon lost control and inadvertently entered (or risked entering) U.S. airspace, the owner would have contacted the Americans, provided the necessary data and information, and tried to avoid a fallout.

China, for its part, responded to the incident only twelve hours after Pentagon’s statement to that effect. There was a dry statement from the PRC about the loss of control of the weather balloon due to force majeure, for which “regret” was expressed.

Shortly thereafter, China declared that it would not tolerate “hype and speculation” about the balloon and accused the United States of indiscriminate and excessive use of force after it was shot down, threatening some “consequences.”

Under the circumstances, it is difficult to assess this as anything other than China’s deliberate humiliation of the United States as well as demonstration of its own strength and confidence. The Chinese consciously chose this course of action in the run-up to Blinken’s visit—now, as the conflict in Ukraine is escalating, the U.S. is more interested in dialogue than the PRC.

The Americans had to choose between continuing the dialogue in a poorer bargaining position after the humiliation they had endured and abandoning the dialogue altogether. The reaction of American public opinion predetermined the choice for the latter. However, this decision was apparently not easy to make.

The visit has not been canceled, but postponed, and the U.S. will probably look for opportunities to carry out negotiations in the not-too-distant future while saving face. Alongside with Blinken’s visit, there were plans for an even more important visit to China, to be paid by U.S. Treasury Secretary Janet Yellen. On February 9, 2023, Yellen announced that she was still planning a trip to China, although it was not yet possible to give a date.

The incident has shown that the Americans are not overly prepared for a tough confrontation with a comparable superpower as soon as it stops playing at giveaway with them. As it turned out, the few previous Chinese ADBs had not been detected at all, and the last one was shot down only after it had crossed the entire U.S. territory, flying over, among other things, an intercontinental ballistic missile base.

There is nothing surprising or particularly embarrassing about it: the ADB is an extremely difficult aerial target because of its low radar visibility, extremely low speed, and a very high flight altitude. The Soviet Union has been practicing its tactics against ADB for decades. The ability to counter such targets was taken into account in the design of some Soviet air defense interceptors. These include, for example, the MiG-31 still in service in Russia, which has the highest maximum flight altitude among modern fighters and is equipped to fight balloons with a GSh-23-6 cannon.

In the United States, reconnaissance ADBs did not show up during the Cold War, simply because the Soviet Union lacked the necessary technical capabilities in the early decades of the confrontation, and the late-Soviet gerontocracy was later afraid to respond in kind to violations of its airspace. Now, the Americans faced a more active opponent and have yet to learn many new skills.

The traditional U.S. propensity to make up for real-world failures with media victories was not very convincing either. Covering the incident, U.S. propaganda followed two lines. They claimed that, first, the Chinese balloon could not have caused any serious damage to the U.S. compared to China’s existing reconnaissance satellites, and second, that the vehicle was not shot down so as not to pose a threat to civilians on the ground.

The second claim is patently absurd: a significant part of the Chinese ADB route passed over deserted or sparsely populated areas, where the risk of harm to civilians was equal to zero. As for the former, the ADB surely remains a valuable reconnaissance tool that can significantly supplement satellite data. For its part, the U.S. has made extensive use of balloons in the operations against Iraq and Afghanistan.

The reconnaissance satellite operates at altitudes of hundreds of kilometers above the ground, while the balloon does so in the altitude range of 20–30 km. This gives it additional capabilities to conduct electronic reconnaissance and detailed ground surveys. The ADB is capable of monitoring atmospheric chemistry and making other measurements useful for the reconnaissance of nuclear-weapons-related targets. Finally, the balloon is capable of remaining over the same territory for long periods of time, tracking the situation there dynamically, and its flight time over an area is not predictable, unlike that of satellites.

Was the incident with the balloon an intentional attempt to disrupt Blinken’s visit from the very beginning? Hardly. If the Chinese had flown around the U.S. three times in the Trump presidency with their ADBs and got away with it, it would make sense to continue this successful practice. When the “balloon case” became public, the Chinese might have chosen an escalatory course of action based on their view of the situation. It is likely that Beijing concluded that it would not lose with any possible U.S. reaction to the incident, and this is probably true.

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Can Lula walk the tightrope between Washington and Beijing?

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Image source: lula.com.br

As Brazil’s New President Luiz Inácio Lula da Silva (popularly known as Lula) prepares to visit China later this month, maintaining neutrality would be difficult as the winds of change enwrap  Beijing.

Brazil is Back

President Lula’s coming to power has marked a decisive shift in Brazilian foreign policy. With the Pink Tide resurging in South America, the new President has clearly spelled out his foreign policy aims: restoring Brazil’s neutrality and importance in international affairs at par with both the West and East after nearly 4 years of impasse under his predecessor Jair Bolsonaro, who had adopted a Sinophobic, pro-Trump foreign policy.

Brasilia’s 39th President, who previously presided over the office between 2003-2010, will have a lot to talk about as he visits his nation’s largest trading partner that imported $89.4 billion in 2022 mostly in soy and iron ore which added a surplus of $28.7 billion to Brazil’s coffers. Boosting the economic partnership with China will be a priority for Lula, who intends to integrate South America into a closely held economic unit. Another important item on the agenda includes the appointment of former President Dilma Rousseff as the new BRICS Bank president.

Lula and the West

Lula had rattled swords with Washington on several occasions during his previous tenure such as alleging the United States for reducing South America to its “backyard” by intervening in its internal politics as well as by opposing the Iraq War. Even though he recognises the importance of maintaining good relations with the superpower up North; several of Lula’s moves including sending a delegation to Maduro-led Venezuela, refusing to sign a UN Human Rights resolution condemning human rights violations in Nicaragua, allowing Iranian warships to dock at Rio de Janeiro, maintaining an ambiguous approach on the Russia-Ukraine War and refusing to send arms to Kyiv, dubbing the ‘Balloongate’ incident a bilateral issue  between the US and China and defining  the Taiwan issue as Beijing’s internal matter, have deeply irked the West.

While tensions remain, Lula’s focus on combating climate change and call for saving the Amazon have earned a thumbs up from the Biden administration as the former’s election to power comes as a breath of fresh air after his staunch “Trump of the Tropics”  predecessor adopted a not-so-friendly approach towards Biden’s entry in the White House. Lula understands Washington’s support is required and hence it was a top spot on his foreign visits list. Lula and Biden held talks amidst a cordial ambience and vowed to reboot bilateral ties by promising to protect democracy and combating climate change.

Winds of Change in Beijing

However, winds of change in the East have dispersed the clouds of ambiguity and China now stands more vocal, more critical and more confident in dealing with the United States.

The recent session of the National People’s Congress, which won Xi Jinping a never-seen-before third term as the President, saw him voicing his criticism against “Washington-led attempts” to “contain, encircle and suppress” China which pose ” serious challenges to its development” (“以美国为首的西方国家对我实施了全方位的遏制、围堵、打压,给我国发展带来前所未有的严峻挑战。”). Sino-US relations have been in the trough since President Trump’s tenure with the recent point of clash being the ‘Balloon incident’ which made Anthony Blinken call off his visit to Beijing.

Xi recently unveiled his new 24 Character Foreign Policy which, Dr. Hemant Adlakha believes, marks “China’s new foreign policy mantra in the ‘New Era’ ” acting as its “ideological map to attain national rejuvenation by 2049”. The characters “沉着冷静;保持定力;稳中求进;积极作为;团结一致;敢于斗争 ” which translate as “Be calm; Keep determined; Seek progress and stability; Be proactive and go for achievements; Unite under the Communist Party; Dare to fight” are set to replace Deng Xiaoping’s 24 Character Strategy  focussed on never seeking leadership and assuming a low profile.

China’s confidence is further boosted by its successful attempt to broker peace between Saudi Arabia and Iran, who have been staunch rivals for the past many years. With the handshake that brought the Sunni Arab Kingdom and the Shiite Persian theocracy together, Beijing has garnered accolades from nations across the region and is all set to play a greater international role by not just pulling American allies such as Riyadh to its side but also through actively putting forth its plans to end wars with Xi all set to pay Putin a visit over the Russia-Ukraine War before he meets Lula at Beijing. Lula too eagerly anticipates what Beijing has to say as he told German Chancellor Olaf Scholz “it is time for China to get its hands dirty”.

Neutrality no more?

If the state of Sino-US relations does not improve, things would get hard for many leaders like Lula who seek to balance between the two superpowers. Lula knows  neutrality is his best bet but money matters– as his former Foreign Minister Celso Amorim noted “Our surplus with China—and I’m talking just about our surplus—is bigger than all of our exports to the United States. It is impossible not to have good relations with China.” Isolating  China, with which Brazil has had a long strategic partnership since the 1990s, at the expense of moving closer to the US might come hard on the purse and exacerbate the many economic challenges he faces. Nor can Washington be isolated– not just because of the economic necessities but also in the face of challenges from far-right forces that both Lula and Biden face.

Lula realises the risks of placing all his eggs in one basket but would he be left with the choice to divide them equally into both? The issue is bound to get stickier but if he successfully manages to escape the quagmire of the unfolding great power rivalry, Lula will set a precedent for not just South America but nations across the globe. The only viable solution would be to strengthen regional alliances in Latin America and boost partnerships with  developing nations like India while using the collective strength to push Beijing and Washington to come together.

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The Malvinas feud as a Global Constant

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Image source: buenosairesherald.com

As an event gets bigger, it’s more likely that interesting things will happen behind the scenes, that is, in unplanned activities.

The seventh meeting of G20 foreign ministers in India in 2023 confirms this. Bilateral meetings between Qing-Jaishankar, the Blinken-Lavrov dispute, and the meeting between Santiago Cafiero and James Cleverly, during which the former notified the latter of the end of the Foradori-Duncan agreement.

On March 2, 2023, by rescinding the Foradori-Duncan agreement, the Argentine government de facto reopened one of the most important territorial disputes in the Western Hemisphere, perhaps the most important, and did so in the most theatrical way possible: at the G20, the main North-South dialogue platform.

What was the purpose of the Foradori-Duncan agreement?

The idea behind the agreement was for the Argentine government to renounce its claims and any serious discussion regarding the territorial dispute over the sovereignty of the Malvinas (Falklands) Islands and the adjacent territories in the South Atlantic. Instead, the Argentine government would adopt a position of claiming “light sovereignty” in order to obtain benefits, mainly economic ones, through joint exploitation of the natural resources of the islands and adjacent territories in the South Atlantic with the United Kingdom (UK), as well as through British investments in the country.

In practice, this agreement implied the Argentine government’s resignation to discuss sovereign rights over the Falkland Islands and their adjacent territories in the South Atlantic. It can be inferred that this was a disguised surrender clause by the government of Mauricio Macri to continue with Argentina’s sovereign claim over the Malvinas Islands.

The purpose of the Foradori-Duncan agreement was in line with the foreign policy stance of the Macri administration (2015-2019), which had a marked pro-Western (and more Atlanticist) position than previous governments (Kirchnerism 2003-2015).

This geopolitical code (if we can speak of the existence of a “Macrista geopolitical code” coming from the geopolitical code of the traditional Argentine ruling class) consisted of a series of agreements (tacit and official) of Argentine resignation and subordination to traditional Western powers (of which the Foradori-Duncan agreement was one of its greatest exponents) which aimed –in theory– to obtain greater economic benefits and a renewal of the country’s public image in the supposed “international community.”

These types of foreign policy positions would be a constant of the Macri government. Even the Argentine scholar Juan Gabriel Tokatlian has conceptualized such a stance as “Concessive Peripheral Unilateralism” to define the foreign policy of the Macri government [1].

In practice, these ideas and plans, were shown to be totally ineffective and unproductive. Argentina practically did not receive economic benefits from such positions, nor did its public image have a significant and positive international projection. And the Foradori-Duncan agreement is the most scandalous example of this reality.

Why did the Argentine government of Alberto Fernández decide to end such an agreement?

The first explanation is the internal conformation and political identity of the government of Alberto Fernández, which logically demanded a change in the previous government’s (Macri) stance on the Malvinas agreements, his predecessor and opponent. But this inference raises another question: Why were such measures not taken before? The answers to this question are only conjectures.

Since the end of the Malvinas War (1982) until today, except for the years of the Menem governments (1989-1999), Argentina’s bilateral relationship with Great Britain has always been marked by a strong “Malvinense” [2] component on the agenda of their interaction, which has often led to high-pitched disputes between both parties. The “agenda” of the Malvinas cause was a constant trend of the Kirchnerist governments (2003-2015), such claims were made, denouncing British illegal occupation of the Falkland Islands on numerous occasions in various international forums, bilateral meetings, and multilateral forums.

But as mentioned earlier, the Macri government would have a diametrically opposed position to its Kirchnerist predecessors regarding the Malvinas question. However, the reality of the country and its foreign policy changed again when Argentina “presented” a new government in 2019, with Alberto Fernández as the head of the presidency.

The government of A. Fernández has an eclectic political character [3], as a result of a coalition between several political sectors, so the foreign policy of his government also reflects the heterogeneous internal conformation of the government coalition sectors.

In such conformation, sectors such as Kirchnerism, as well as more orthodox Peronist sectors, are present, both of which have traditionally had a more                       “Post-Western” stance, aiming to “rewrite the Argentine geopolitical code” and the vectors of Argentine foreign policy, projecting an alternative foreign policy, in first place towards their own region: South America, Ibero-America, the Caribbean, and in more modern times, especially towards the Global South, the BRICS, and Asia. In such guidelines, the action of rescinding the Foradori-Duncan agreement was logical. But logic also makes us wonder, why were such measures not taken before? Such questions enter the realm of speculation.

Another analysis could be given in an electoral key reading, this year 2023, presidential elections will be held in Argentina, and Alberto Fernández has expressed on several occasions through words and gestures [4], that he is willing and interested in being re-elected as the head of the Argentine executive branch.

Facing a public image tarnished by the covid-19 pandemic, and mainly a negative macroeconomic situation, the electoral nature of this foreign policy measure cannot be ruled out: the Malvinas cause is a cause that mobilizes emotions in Argentine society and remains a deep wound to national pride, and is a valid rhetorical and practical tool to antagonize the Argentine opposition (liberals and conservatives), which has never had (and perhaps never will have) a firm geopolitical stance nor interest in the Malvinas question.

Also, the reading of tensions within the coalition of the current Argentine government can’t be ruled out, in this last aspect, this measure could be read as a gesture of balance from the “Albertismo” towards Kirchnerism, a sector of the government in which many leaders believe that the sector identified with the president has geopolitically leaned too much towards Washington and the West since the 2022 debt agreement with the IMF and the war in Ukraine.

Argentina informed the British of its decision during the G20 foreign ministers’ summit, which was dominated by the BRICS. Is it a coincidence that such a measure was taken at one of the most representative events of the Global South?

it clearly cannot be considered a coincidence.

The symbolic weight of such an action, in such a context, must be clearly considered. The G20 has a dual character as the main forum in which traditional (Western) powers dialogue but also reflects their tensions and antagonisms with emerging powers and peoples, including those of the so-called Global South.

With tensions between former metropolis countries and former colonies that make up the G20, and which are now emerging in material capabilities, a post-colonial and decolonial reading cannot be ruled out, and therefore a strong message from Argentina to the world’s emerging powers and the Global South.

Did China have any influence on the finalization of the pact?

No, there is no such “Chinese hand” that has driven such a measure by the Argentine government. These are paranoid arguments with a stubborn anti-Chinese bias that also ignores Argentina’s own reality. To put it plainly, if we use common sense, the decision was not elaborated nor driven from Beijing.

As mentioned earlier, the issue of the Malvinas is a deeply rooted national cause in Argentine society, and a constant in the foreign policy of Kirchnerism, which today is part of the coalition that compose the current Argentine government, which with such measures such as revoking the Foradori-Duncan agreement seeks to                “retake the ownership of the Malvinas and South Atlantic issue in its agenda,” marking a clear differentiated stance from the current political opposition (Juntos por el Cambio) that made such a pact in the previous presidential term.

The decision was not elaborated nor driven by Beijing, and in any case, recent and clear positions of support for Argentina’s sovereign claim in the Malvinas Islands by powers such as China [5] and Russia [6] were considered within the decision-making process to take such measures. Therefore, the positions of Beijing and Moscow influenced, but did not condition or generate, Buenos Aires’ decision.

The future of the Malvinas Question

It’s very difficult to envision a future scenario for such a specific and complex issue, especially in the long term. But a prospective scenario can be envisioned in the short term, which is basically and probably that the situation will not change significantly under current conditions. Unless the world is altered by seismic events.

It’s highly unlikely that we will see a dialoguing UK government in the short and medium term that is willing to negotiate the sovereignty of the Falkland Islands. And it is similarly unlikely to see a future Argentine government, especially if it has the characteristics of a Peronist, Kirchnerist, or progressive government, openly giving up its claims to the sovereignty of the Falkland Islands.

Such a proposition would surely change if there were a liberal-oriented government in Argentina, such as Mauricio Macri’s.

The problem with the current Argentine government, as well as future ones, regarding the Malvinas dispute, is that the country does not have, and will not have in the short and medium term, the set of soft and hard capabilities (economic, diplomatic, military, ideological influence) to press and force the UK hard enough to revise its traditional stance on the occupation of the islands. At least until the current balance of power and the position of emerging powers, such as China, would consolidate even further in the world order.

But in any case, such changes and opportunities will depend on the international context and the agency of third parties, which are independent variables for the positions that future Argentine governments may take.

Most experts in international relations and geopolitics agree that the territorial dispute over the Falkland-Malvinas Islands between Britain and Argentina will not have an easy or predictable resolution in the short term.

Some experts point out that the strategic geographical position of the Malvinas Islands and the presence of significant natural resources in the area, such as fishing and hydrocarbons, make the dispute even more complicated.

Moreover, many experts believe that Britain’s position has been strengthened in recent years thanks to the exploitation of the area’s natural resources and the lack of a clear strategy on the part of Argentina to resolve the dispute.

A hypothetical Chinese presence in the region, through the southern Argentine city of Ushuaia, through the construction of a logistics hub, has added an intervening element that makes it even more complex to envision a prospective scenario [7].

However, some experts believe that the issue of the territorial dispute over the Falkland Islands, Argentina’s position is legitimate, which has won it great support and sympathy among peoples and emerging powers, most of them with a colonial past [8].

References

[1] Tokatlian, J. G. (2018, 2 de febrero). Relaciones con EEUU: ¿nueva etapa? (Relations with the US: a new phase?) Clarín.
https://www.clarin.com/opinion/relaciones-ee-uu-nueva-etapa_0_rka7ze-UM.html

[2] Porto, J. M. (26/03/2022). Despite diplomatic ups and downs, the Malvinas claim became a state policy. Telam. https://www.telam.com.ar/notas/202203/587606-diplomacia-soberania-argentina-islas-malvinas.html

[3] In its composition as a coalition, including important elements of what might be called “Centre-Right” sectors that have Western – especially Washington – affinities.

[4] Its relevant to remember that on 22 February Alberto Fernandez led a public act in situ celebrating 119 years of Argentine presence in Antarctica. “Alberto Fernández visits Antarctica“. Sputnik. (23/02/2023). https://sputniknews.lat/20230223/alberto-fernandez-visita-la-antartida-1136141105.html

[5] Joint Statement between the Argentine Republic and the People’s Republic of China on Deepening the Argentina-China Comprehensive Strategic Partnership. (06/02/2023). https://cancilleria.gob.ar/es/actualidad/noticias/declaracion-conjunta-entre-la-republica-argentina-y-la-republica-popular-china

China’s support for the Malvinas deepens a relationship with many agreements. Telam. (03/07/2021). https://www.telam.com.ar/notas/202107/560027-apoyo-china-malvinas-cada-vez-mas-explicito-profundiza-relacion-muchos-acuerdos.html    

[6] United Russia leader Medvedev celebrates Argentina’s termination of Foradori-Duncan agreement. Sputnik. (2023, March 6). https://sputniknews.lat/20230306/el-lider-de-rusia-unida-celebra-que-argentina-haya-terminado-el-acuerdo-foradori-duncan-1136503626.html   

Putin defended Argentina’s sovereignty over Malvinas and took aim at Boris Johnson and Margaret Thatcher. Política Argentina. (2022, May 30). https://www.politicargentina.com/notas/202206/44954-putin-defendio-la-soberania-argentina-sobre-malvinas-y-le-tiro-a-boris-johnson-con-margaret-thatcher.html

[7] The details of the Ushuaia Logistics Hub to supply Antarctica. El Cronista. (24/12/2021).
https://www.cronista.com/economia-politica/exclusivo-los-detalles-del-polo-logistico-de-ushuaia-para-abastecer-a-la-antartida/  

An Antarctic logistics hub: official plan opens the door to strategic partners. El Cronista. (11/10/2021).
https://www.cronista.com/economia-politica/un-polo-logistico-para-la-antartida-el-plan-oficial-que-abre-la-puerta-a-socios-estrategicos/       

[8] The Group of 77+China gave strong backing to Argentina’s position on the Malvinas Islands question. Telam. (2022, November 12). https://www.telam.com.ar/notas/202011/534875-el-g77china-dio-un-fuerte-respaldo-a-la-posicion-argentina-en-la-cuestion-malvinas.html

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