The Dragon’s Gateway: China Sets Sail for Argentina’s New Port

In the last decade, China has emerged as the biggest investor in the field of infrastructure across the globe. Through its ambitious Belt and Road Initiative (BRI), China has emerged as the top commercial partner and an important source of Foreign Direct Investment and credit in infrastructure, energy and other sectors in Latin America. China has cultivated strong economic ties with numerous Latin American countries, offering multi-billion dollar deals that appear too good to be true. The BRI has been a target of major scrutiny, criticism and backlash by economists and analysts alike, calling these investments a ‘debt-trap’.

Argentina fell into a debt-trap even before the official launch of the Belt and Road Initiative (BRI) in 2013 by Chinese President Xi Jinping. In 2010, Cristina Kirchner signed an agreement with the Chinese to install a port in the province of Tierra del Fuego, operated by Chinese companies. Even though the company that runs the port station in Tierra del Fuego is based in Argentina, all of its partners are either Chinese companies or companies that are backed by China. Shaanxi Coal and Chemical Industry Group LTD is a Chinese state-owned company with consular protection. Jinduicheng Molybdenum Group Co. Ltd is owned by the Chinese central government. And the third partner, Shaanxi Xinyida Inversiones Sociedad de Responsabilidad Limitada, though registered as an Argentine company has members of the Chinese government on its board of directors. But the most important and equally interesting character in this whole story has to be Lin Yun Yo, who played a key role in the actualization of this port project.

Lin Yun Yo, who is also known as Fernando Lin or Luis Fernando Lin, is a well-known figure in Buenos Aires, Rio Grande, and Rosario. As the president of Shaanxi Investments and a prominent representative of TDEFQ, he has been involved in various significant business dealings, including real estate transactions, railway contracts, lithium sector investments, and meetings with high-ranking government officials. Lin’s name consistently appears in connection with major Chinese projects in Argentina, highlighting his versatility and extensive connections with officials. In 2015, Fernando Lin faced setbacks when the petrochemical pole project in Rio Grande crumbled,
leading to extensions for payment and eventual project cancellation. Despite failing to build the port as planned, Lin made efforts to revive the project but faced challenges due to changing government and market conditions. However, with the return of Peronism to power, Lin renewed his focus on urgent port construction, while other aspects of the project, such as gas supply and cost updates, remain uncertain.
This case also highlights the high level of corruption by the Argentine government, which has allowed not only to reactivate the Chinese port project but also to drop the lawsuit against it. In 2015, Governor Rosana Bertone halted the project and sued TDEFQ for $5 million and $274 million in payments that were still due. But in 2022, Governor Melella signed a deal to bring back the Chinese port project in Tierra del Fuego without the Foreign Ministry’s approval. He also dropped the lawsuit that his predecessor had started. The Argentine group Mirgor is already building the new port in Rio Grande. It will be finished in two years and will be big enough to handle present traffic.

The reactivation of the Chinese port is not a mere coincidence but a carefully planned strategic move by China. This port would give China a chance to increase its presence in Antarctica, gain from Latin American fishing grounds and get a strategic foothold in the region. The Chinese fishing fleet, which is notorious for violating the EEZs of several countries including those of Latin America and Africa, will have a convenient base for refuel, repair and maintenance. This would also allow the fleet to catch a higher volume of fish and give tough competition to countries like South Korea, Spain and Taiwan that fish for Hake and Squid in the area. However, this would create a rift between Argentina and its neighbors such as Ecuador, Peru, Chile and Uruguay, who have frequently complained about the detrimental effect of Chinese DWF on their natural resources. Ecuador, where the Galapagos Islands are, is the country most affected by Chinese fishing. It has tried various means to stop these vessels from entering its EEZ.

In addition, the Rio Grande port would allow China to exert its influence over Antarctica, a region that Argentina, the UK and Chile all claim. At present, the closest terminal China has to Antarctica is Paranagua in Brazil and the closest military terminal is in Djibouti. The Argentine port would provide a convenient stopover to its largest base in Antarctica, named “Great Wall,” and expand its presence on the frozen continent. Argentina, due to financial constraints and a decline in its air and naval fleet, has struggled to maintain its bases. Because of the mounting debts, Argentina may have to surrender the Rio Grande port to China to keep its presence in an area of the Antarctic that overlaps with China’s claims to territory.

With a debt of US $2,403 million with China and a trade deficit of around US $9,500 million, Argentina is the latest victim of China’s debt-trap diplomacy. Other defaulting countries like Pakistan and Sri Lanka had to hand over control of ports and naval bases to China due to their inability to repay debts. The story of Sri Lanka’s Hambantota and Pakistan’s Gwadar have made enough headlines to warn of the danger. However, the deals offered by China are much more lucrative than those of the International Monetary Fund (IMF) and other similar organizations, as these multilateral institutions provide loans based on economic policies. China simply hands out the loan, without audits or consideration of the economic policies of the country. It only keeps deadlines and rates from being renegotiated, and if they aren’t met, it takes over the job. But ‘all that glitters is not gold’. Chinese loans hide many confidentiality clauses which contain information on the interest rates charged and the penalties in case one defaults. These loans are not scrutinized by Congress in the same way as the loans provided by IMF, meaning that the exorbitant interest rates and penalties remain hidden.

The pattern is clear: China gives out the loan with clauses that ensure it will get the money back through loan guarantees. The economic situation of countries like Argentina, Pakistan and Sri Lanka is already bad, so they won’t be able to pay back the loans, thus defaulting on the loans. This gives China a chance to take over the properties such as ports, military bases, operations such as power plants etc. Currently, several projects in Argentina, including the fourth Argentine nuclear power plant, the Kirchner Cepernic dam, its lithium reserves, and waterways, are susceptible to potential Chinese takeovers. The story of Argentina is full of corrupt politicians, cunning businessmen and well, China being China. While in the recent past, China has emerged as the modern-day colonizer, it’s the host countries that have allowed their countries to be sold piece by piece. The Kirchner family and its allies have sold off Argentina’s port, energy, grain route, lithium and even Antarctic territory just to gain enough money to buy off time till the next elections. The case of Argentina serves as a cautionary tale, highlighting the need for careful evaluation and transparency in entering into agreements with China.


China, Argentina, Antarctica