Chinese Defense Contracts in Argentina

Chinese Defense Contracts in Argentina

Brenda Fiegel

China and Argentina are not new allies, as the Asian giant has looked to its South American trading partner to fuel domestic demand for agricultural goods and natural resources since 2004. However, 20 new agreements signed in February 2015 bolstered overall relations to  a “comprehensive strategic partnership,” as cited by representatives in both China and Argentina.[i] These agreements are far-reaching and encompass trade, investment, agriculture, technology, and defense. Of particular interest in the region and abroad are the defense components of the agreements, as they extend beyond the scope of previous cooperation between China and  any other Latin American country to date. Furthermore, the defense agreements encompass each branch of Argentina’s military, as they aim to modernize the countries aging defense systems. What is not yet clear about these agreements is whether or not the new Maurico Macri administration will honor them or instead look to other nations to modernize Argentina’s military force.

Air

If one thing is certain, it is that the December 2015 decommissioning of Argentina’s Dassault Mirage fighters left a hole in Air Force capabilities, but there are hopes that China may be able to solve this problem. A joint working group is currently looking at the feasibility of Argentina acquiring as many as 20 FC-1 or J-10 aircraft from China’s Chengdu Aircraft Corporation.[ii] Hypothetically, this deal stands to benefit both parties, as it would provide China with a feasible export market for its new fighter jet. Furthermore, Argentina’s delicate financial situation would benefit from favorable finance terms offered by China. If Argentina is able, it is likely to choose the J-10, despite its higher price tag, as it would most effectively counter British Typhoon aircraft stationed on the Falkland Islands. 

On a strategic level, this deal is troublesome to the British as they fear Argentina’s acquisition of new fighter jets would open up a theoretical window of opportunity to strike the Falkland Islands before Britain’s new carrier fleet enters into operation in 2020. This concern was reiterated by British Defense Minister Michael Fallon in May 2015, when he stated that “Argentina still poses a very live threat to the British-ruled Falkland Islands” as it has always claimed sovereignty over them despite the fact that Britain has ruled there for nearly two centuries.[iii] In an attempt to mitigate this potential immediate threat, Britain plans to increase troop presence and provide additional aerial support to the 150 British soldiers currently stationed in the Falkland Islands. However, this may not be necessary as Macri vows that he plans to take a less aggressive stance than former President Cristina Kirchner did on the Falkland Islands, but did state that Argentina will retain its claims to them.

Navy/Army

Argentina has been looking to update its naval fleet for over a decade and is currently considering the purchase of China Shipbuilding Industry Corporation's P18 export corvette (5 total), following failed deals in recent years with countries including Spain, Germany, and Brazil. In a controversial move, the Argentinian government reported that, if acquired, it will call the vessel the “Malvinas” class after the Argentine name for the Falkland Islands which as stated in the previous section, is still a point of contention between the two nations.

What is unique about the naval deal proposed by the Chinese is that 3 of the 5 P-18s would be coproduced in Argentina which is very appealing as it is looking to compete with military equipment producers in the region such as Brazil. Estimated completion time for this project is 2017. Other items to be acquired as part of the naval deal include icebreakers, tugboats, and offshore patrol vessels. The Chinese have also proposed potential deals for ground forces, which involve Argentina in the coproduction of 110 8x8 VNI amphibious armored personnel carriers. 
Space Cooperation

In addition to updating Argentina’s defense force, China just finished construction of a Satellite Launch and Tracking Control General (CLTC) in the Neuquén province of Argentina, which represents the first of its kind outside of the Chinese borders. This project was fiercely contested by opposition politicians in the Argentine Congress, as they claim the space station could eventually be utilized to employ space sensors for early-warning and missile defense operations. Argentinian international analyst Felipe de la Balze echoed similar concerns when he stated that the base “may be used for military purposes which could implicate our country in a future military conflict between the US and China.”[iv]

In response to these claims, Chinese Ambassador to Argentina Yang Wanming indicated that the station is “a peaceful and technological project to explore outer space and has nothing to do with a military project.” Still, concerns remain as the CLTC responds directly to the General Armament Department and the Central Military Commission of the Chinese People's Liberation Army. Furthermore, Argentinian news source Clarin reported that the agreement is not completely transparent, as at least two of the attachments are secret and known only to China's CLTC and Argentina's National Space Activities Commission.[v] Macri has since responded to these claims by stating that CLTC will not be sanctioned for any type of military use.

What becomes evident after reading proposed defense deals between China and Argentina is that years of work have gone into them, but the November 2015 win by center-right presidential candidate Mauricio Macri may leave some of them hanging in the wind. Regarding military strength, Macri must take into account that Argentina is in desperate need of upgrading its current defense systems, and China is already committed to providing this support in exchange for commodity-backed loans. However, what has become evident since he took office  is that he wants to keep his options open on the purchase of equipment as evidenced by quotes for the purchase of weapons that have been submitted to countries such as the United States, France, Russia, Brazil, Israel and Korea to name a few.

From a defense perspective, the purchase of modern equipment is imperative as it will revive Argentina’s aging military which is likely why Macri is weighing his options and not completely committing to China. These same deals would be a big win for China, as they look to expand military influence in Latin America while securing valuable sources of natural resources and exports needed to support its growing population base. In closing, only time will tell which deals Macri will honor, but from what has been seen thus far, he wants to re-build relations with countries such as the United States and Britain while simultaneously working with China as he realizes the Asian giant would be a powerful ally to lose. What this means for the purchase of defense equipment is that multiple vendors will be considered before final decisions are made.

The views expressed in this report are those of the author and do not necessarily represent the official policy or position of the Department of the Army, Department of Defense, or the U.S. government.

End Notes