U.S. Markets open in 5 hrs 18 mins

Argentine Billionaire Warns Fernandez Against Closer China Ties

Pablo Gonzalez

(Bloomberg) -- Eduardo Eurnekian, one of Argentina’s richest men, has advice for Alberto Fernandez, the populist contender to become the crisis-ridden country’s next president: Don’t lean on China for financial support, stick to the U.S.

The 86-year-old billionaire is reacting to speculation that Fernandez, the Peronist candidate who’s favorite to win October’s election, may turn to China for financing as the government is on the verge of default once again. Guillermo Nielsen, an economist linked to Fernandez’s alliance, has talked about a “financial lifebelt called China,” though a representative for the campaign has said the politician for now won’t comment on Chinese money and influence in Argentina.

“Turning our back to the U.S. again and seeking an alliance with China to get funds would be a big mistake,” Eurnekian, whose Armenian immigrant family made its wealth through a start in textiles, said in an interview in Buenos Aires. Today his main companies are Corporacion America Airports, which operates about 50 airports globally, and energy producer Cia General de Combustibles SA.

The next Argentine president should understand there is no other path to growth than embracing U.S.-style liberalism, based on “principles that generate progress and prosperity,” according to Eurnekian, who has been critical of current President Mauricio Macri and the slow pace of his ultimately failed reforms. “Seeking an alliance with China would only generate more poverty.”

Read More: Argentina’s Financial Crisis Creates an Opportunity for China

The rise of China’s global economic power has appealed to mainly leftist governments in Latin America. Between 2005 and 2017, the Asian Communist regime lent $75 billion to the region with Venezuela, Brazil, Argentina and Ecuador receiving 91% of the total, according to a study by the Inter-American Dialogue. In that 12-year period, those countries were governed by left-wing leaders such as Hugo Chavez, Luiz Inacio Lula Da Silva, Dilma Roussef, Rafael Correa, Nicolas Maduro, Nestor Kirchner and Cristina Fernandez de Kirchner.

Argentina under Cristina Fernandez, who is Alberto Fernandez’s running mate, sealed a three-year $11 billion currency swap agreement with the People’s Bank of China. And while Macri warmed to the U.S. after 2015 election, he also pursued several agreements with China including renewing the swap deal for another three years and approving the Chinese operation of a space station in Patagonia.

China is Argentina’s second-largest trading partner with about $15.6 billion of total trade in 2018. Brazil is the biggest, while the U.S. is third biggest.

“If we want to prosper we need to stick to our largest commercial partner, Brazil, which has already decided to ally with the U.S.,” Eurnekian said. “If the country commits a new geopolitical mistake like the several it committed in the last 80 years by picking once and again the wrong political ally, Argentina will be condemned to failure.”

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Carolina Millan

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.