In early June, Argentine Governor of Tierra del Fuego Gustavo Melella revived an old controversy concerning a deal with a Chinese company to build a multipurpose port in Rio Grande.
The controversy was reignited when Melella presented the memorandum of understanding he had signed with Shaanxi Chemical Industry Group to the local legislature. The agreement includes the construction of a port terminal with mooring capacity for vessels of up to 20,000 tons, as well as a power plant and an industrial plant to produce 900,000 tons of urea, 600,000 tons of synthetic ammonia, and 100,000 tons of glyphosate per year, for an estimated total investment of $1.2 billion, Bloomberg reported.
According to Argentine news site Deproa Noticias, at the time that Melella signed the agreement with the Chinese state-owned company, Argentine company Mirgor already had plans to build a port in the same city.
Beijing, Deproa Noticias reported, has assured that it will not back down and will exert pressure so that the agreement is approved in the local legislature as presented, including the port. The Argentine Ministry of Economy, however, denied that the Chinese investment will take place, Chilean newspaper La Tercera reported.
“That they [the projects] will not happen I doubt it; it was simply postponed. China is very persistent,” Juan Belikow, professor of International Relations at the University of Buenos Aires, Argentina, told Diálogo on July 18. “China shows persistent ambition for geopolitical control; it seeks to project itself as a world empire through non-traditional resources such as the economy. Its main strategy is to indebt countries into financial crisis to gain advantage.”
Argentina is currently facing a growing debt of $20 billion with Beijing. A situation that is aggravated by the country’s complex financial crisis, Belikow said.
The Chinese port in Rio Grande would control the passage between oceans through the Strait of Magellan, have direct access to Antarctica, and monitor movements in the Falkland Islands, including the British Mount Pleasant Complex, reported Uruguayan news site Merco Press News on June 13.
“In terms of Antarctic presence and research, we know that China applies dual use for scientific capability,” Belikow said. “If Chinese scientific ships with powerful radars that allow them to control satellites start mooring in this port, the security implication of that is more than obvious.”
Another major concern about the construction of this port is that it could become similar to the research base Beijing has in Neuquén, which has restricted access, Argentina’s Revista Puerto reported.
It could also provision the Chinese fleet that fishes in mile 201 of the South Atlantic, further accentuating the commercial disadvantages of that sector as compared to the illegal, unreported, and unregulated (IUU) fishing that supplies the same markets, Revista Puerto added.
For Belikow, China needs a strategic bioceanic point in Tierra del Fuego in the event the Panama Canal were to have problems and a conflict were to break in the Arctic, so its interest is obvious. Currently, the closest port to Antarctica is Auckland, some 3,000 kilometers away, Argentine daily La Nación reported.
“The port [in Rio Grande] is of a strategic nature so it can only be operated by companies with national capital, public, private or mixed, but national,” Tierra del Fuego Congressman Federico Frigerio said via X, previously known as Twitter. “We are not going to allow any foreign state to control our strategic infrastructure.”
“China currently has full or partial control over 40 of the 120 most important ports in Latin America, which is equivalent to approximately one-third of regional trade,” Belikow said. “This presence gives Beijing the ability to prioritize its own interests in times of crisis, creating an environment with ‘weird dynamics.’”
On lionized terms
“It is time to become aware of the serious consequences that other countries face in dealing with China,” Belikow said. For example, in Montenegro, located on the Balkan peninsula, the construction of a highway was initiated with a contract that guaranteed a minimum amount of government-backed traffic.
Since this number of vehicles was not met, the Chinese government enforced the clauses and took ownership of the highway as the Montenegrin government could not afford the difference. “Such issues are common in negotiations with China, which continues to impose dismal conditions,” Belikow concluded.