ReporteAsia interviews Argentine economist Osvaldo Cortesi in the framework of the project on Beijing’s influence in the Argentine media to understand the economic perspective of the phenomenon since the phenomenon of increased information and misinformation about China in Argentina is closely linked to the strengthening of the bilateral link in trade, commerce, and economic issues in general.
Cortesi has a vast background to explain the economic phenomena closely linked to the information we consume about China. He holds a degree in Economics with an Honors Diploma from the University of Buenos Aires (UBA), Argentina, and has worked for the last 30 years in public and private financial institutions. Also has served as Director of Banco de la Ciudad de Buenos Aires, Director of Banco de Corrientes, Vice President of Banco de Inversiones y Extranjero (BICE), and General Manager of Banco de Crédito Argentino, among other functions.
He was General Director of the National Ministry of Finance (1975-1977) and Chief Economist of FIEL, Fundación Latinoamericana de Investigaciones Económicas (1971-1975). Since 2000 he has specialized in the Chinese Economy and its global and regional repercussions. He is currently an independent consultant, advising financial institutions and private companies in different industries.
Growing influence and economy
For the interviewee, the economic growth of China, a country he visited twice (in 2000 and 2019), has led that power to seek to generate more influence in the countries with which it has strategic ties, as happened with Argentina. But for him, since milestones such as China’s entry into the WTO, or the 2008 Olympic Games held in Beijing, «China became an attraction of global economic interest. From that moment on, information about China took on enormous relevance in think tanks, journalism, and the media. And China somehow was letting evolve a whole position, or a perspective, linked to the importance of Chinese civilization in global development.»
«China is interested in the way it is viewed by the rest of the world. That is where complications, contradictions, and problems start to arise, which is what we are seeing in recent years. Globally, the interest in China is very relevant because today China is 20% of the world’s population and has managed to be, after 20 years, 30% of the world’s manufacturing production. But its development has several contradictions that we need to know about, and to see how these contradictions evolve and how they affect both China, within China, and the rest of the world», he continued.
The need for greater resilience in journalism and academia
From his perspective, Argentine journalism is not fully prepared to analyze China-related issues. «Why? Because depth requires a holistic vision. It means a broad or complete vision with a formation that not only has to be from history, culture, art, philosophy, and custom but also strongly with the economic and financial issue.»
In his daily consumption of the media, Osvaldo Cortesi identifies attempts to install pro-Chinese narratives, which he links to a current closely linked to the Latin American left that takes the Chinese case as an anti-American element: «I say it with all the letters, obviously it is financed and promoted or accompanied, sponsored by the Chinese Communist Party».
His method to get out of the more «localist» analysis of the relationship with China is to look for other visions of Sinology, finding support, especially in French Sinology, «which is given very little importance here, both in the Western media and China. But the truth is that the origin of sinology is France in 1814 with the College Dé France. And the truth is that to this day, this perspective is very relevant to understanding what is happening in China».
Different views on China
According to Cortesi, with this way of looking at China from other latitudes, he seeks to respond to the political alignments that different lines of sinology have acquired around the world, which also, as he says, can be useful in the formation abroad of certain stereotypes about China that are precisely articulated with Beijing’s communicational objectives: «what one observes worldwide is that the training of sinologists is controversial. That is to say, there is the sinophile sinologist (friend of China) and the sinophobic sinologist (enemy of China). To put oneself in an open, free, and independent point requires a great effort because there is a bias in terms of the presentation of information. After all, it has to do with very strong economic interests».
Cortesi explains, that he does not perceive an open debate on the China issue among specialists, while he affirms that the existence of pro-China militant journalists and pro-China militant politicians in Argentina is undeniable: «Because, if we see the truth from the facts, how does China manage to install a base (not missile) but fundamental for the technology of the future in the province of Neuquén? Dedicated to space observation, and the tracking of satellites around the world. It achieves it in an Argentine government that facilitated Chinese investments, although we do not know what in exchange for what in terms of contracts.
He also does not see that the reading about China in Argentina is currently well-directed in the Argentine media: «In fact, today, nobody is talking about the southern dams (in Santa Cruz, Argentina) that were negotiated in 2014 and we are in the year 2023, probably the topic will be raised in the coming months. Have we seen this issue installed with an analytical study and information in the local media? No.
Between increasing opacity and narrowing approaches
As a regular reader of international media, when you read Argentine media, do you find information about China «opaque»?
I would say that more than opaque, it is like the approach (you can focus on one side, to the center, to the left, above or below) is very biased because the holistic approach will require more depth to understand the Chinese model. How was the Chinese development model and how will that development model continue in a stage of many disruptive and, to some extent, dystopian technological advances, with enormous complications? On labor markets, I raise this.
«What I observe is that there is no depth of analysis, based on reading, of the many readings of different orientation or perspective, which today emerge from all over the intellectual, economic, political and financial world,» he reflects.
Cortesi then brings to the dialogue a topic little covered in the media and social networks in general, but that marks a very concrete influence in the bilateral relationship, focused on business and legal practices: «Since the Xi Jinping stage, in 2014-2015, most of the contracts between Chinese companies and the countries where China goes to look for resources are opaque in terms of conditions. This is proven, some papers point this out and that have been edited in the last two years.»
«This is a concrete reality, why does the United States today propose transparency? Because it wants to try to show and open the game for the clarity of international relations, we are in a transition process, which in turn in China is happening internally, regardless of this phenomenon that I am pointing out», he remarks on what may be a practice that puts at risk the sovereignty of the countries that must negotiate with the Asian giant agreements that include confidentiality clauses that are more common to the business world than to the public in the West.
China’s economic crisis challenges the authority of its soft power
For example, Cortesi understands that very little is discussed of the magnitude of China’s economic crisis in the post-pandemic, which marks the end of a model of success difficult to replicate in 2024.
It is important to dwell on the dimension in certain factors of the current Chinese economy, which mark what may be a weakening of its ability to finance influence through media, and to be convincing about its alleged achievements: «Why China has today a real estate crisis? And someone wonders why real estate or the real estate sector? Because in China, real estate is a form of savings, for the family. It is not like countries in Western countries, through liquid assets, financial markets, Wall Street specifically.»
«China has a clear orientation towards family savings in real estate. That reaches a point where it becomes unsustainable. Necessarily China has to move from that model to a more financial model. However, a more financial model means the loss of power or the deterioration of the centralized power of the CCP. Because Xi Jinping’s policy lately has been to concentrate more power and to repress activities that have to do with financial development. I look at it from a financial perspective, you cannot enter a country where you cannot leave», described the economist, with a comment that reflects a turning point in the history of China and its relationship with the world.
For all these reasons, Cortesi predicts that China’s influence in terms of communication could be less effective going forward because the data of its economy will not allow it to generate internal milestones to accompany its narrative abroad.
Chinese soft power in the post-pandemic: no health authority for its vaccines
For Cortesi, the pandemic put China to the test and also the perspective that the rest of the world has of China, «without Beijing being able to take advantage of the situation because the Chinese vaccine did not turn out to be the most efficient, since vaccines played a central role in freeing large populations from the yoke of quarantine. In other words, China did not produce Faiser, Moderna, the vaccines that somehow made it possible to overcome the epidemic. What came out of China was the capacity to produce the necessary goods, but not the vaccine. But the key was the vaccine, not the medical products which China has a huge production capacity to export to the world».
«Vaccines came out of Western laboratories that have vastly more potential because of the freedom in terms of innovation. This is not a minor issue in the case of China. The CCP’s control of everything to do with the private sector limits innovation. The innovator and the technologist are oriented by profit, he is oriented by the development of the products he invents and his ideas. Another example we have is the case of microprocessors,» Cortesi adds.
«Microprocessors are designed in the USA and the factories are in Taiwan and the machines that these factories have are produced in Europe and the USA. The microprocessor is another key element of the development stage of humanity in these next decades. There is a very good book by Chris Miller, called «The Chip Wars», on the development of the microprocessor theme.»
Argentina-China relations in the spotlight
Cortesi recommends that to analyze the Argentine-Chinese relationship, the Australian case should be taken as an example since they present similarities that can serve as input for the corresponding study.
He added «This issue, I insist, in Argentina is not taken into account. In Argentina, everything is very superficial, even when I detect and affirm, and I can prove it, the way China moves. For China, Argentina is not only lithium, predatory fishing in the south, or grains, specifically soybeans, there is more». For the Argentine sinologist, Antarctica is another of the objectives that China will soon put explicitly on the table for dialogue with the South American country.
Therefore, although he thinks that China cannot be considered a threat to Argentina in terms of national sovereignty, energy, democracy, freedoms and institutions, he draws attention to the process of de-risking, that is, risk reduction, which has seen the relocation of industries and investments of Western owners from China to other Southeast Asian countries, such as Vietnam, Indonesia, or Singapore, hoping that Argentina can find less challenging partners from the geopolitical and economic point of view in this period.
In terms of values, Cortesi believes that in the future China will get along well with an Argentine government that values the virtues of the work culture. «China had problems with that culture of «no work» or «conflict», with the investments it made in oil. That is to say, a very important Chinese company such as Sinopec, bought assets from I think British Petroleum. And six or seven years ago they had to sell everything because labor conflicts prevented them from producing. And they left, they decided not to invest anymore because they faced realities in terms of labor culture that they could not cope with».
Chinese values: possible contradictions
Cortesi sees contradictions in the Chinese development model, which will also modify its role as a force for change and its capacity for persuasion: «There is a central theme that has to do with a contradiction. If we analyze Xi’s speeches, we see that he honors Xun Zi and his writings on corruption. But we are never going to see a Chinese person deal with corruption issues in Argentina or the world».
In China, the Inspection Commission, which is in charge of Xi Jinping’s right-hand man, is relentless in terms of corruption. But the Confucius Institute, at the University of Buenos Aires, does not discuss these issues. The question is: Who installs in China this topic of Chinese philosophy so valuable in Argentina? Who is better off not installing it? I have an answer: it is easier to negotiate with corrupt people than to negotiate interests with transparent people who want to put on the table all the characteristics of a contract».
For Cortesi, many factors mark the arrival of a period in the relationship governed by practices of transparency and due diligence, to the benefit of both nations and the end of a period marked by opacity in negotiations and agreements, which led Argentina in the last 20 years to take loans from China: «in a context of crisis when no one was lending to our country and when we had a country risk of 2,500 points, a very high figure. And China released swaps and became the Central Bank’s lender of last resort. The question is, against what?»