China’s incursion into Argentine Patagonia and the repercussions for Chile

RIO DE JANEIRO, BRAZIL – In Chile, the US$17 million ransom decreed in August 2021 by the Argentine federal government to guarantee the Néstor Kirchner and Jorge Cepernic dams project (formerly La Barrancosa and Cóndor Cliff), to be built by a Chinese company on the Santa Cruz River for an investment of US$170 million went unnoticed.

Although the international boundary in the Southern Ice Field has not yet been agreed upon, Argentina maintains that all the Andean tributaries of the Viedma and Argentino lakes (i.e., the entire Santa Cruz river basin) belong to it. It is equivalent to affirming that the Santa Cruz River does not include water resources shared with Chile. However, and as it is known, before flowing into the Atlantic, these waters are connected to the watercourses of the Southern Ice Field.

The dams to be built in Santa Cruz are part of the Argentine chapter of the Chinese global project “One belt, one road”, formalized during the government of Mauricio Macri. These works are conceived not only to boost the energy development of Argentine Patagonia but also to irrigate thousands of hectares of a sparsely populated territory increasingly exposed to desertification due to climate change. Seen in this light, for China, it is not only a profitable business, but also an investment aimed at laying the foundations of a new agricultural production that -in the future- could be important for its own food security and, why not, to generate habitability conditions for future Chinese immigration.

The Santa Cruz river dams are only two of several projects promoted or consolidated by the “One belt, one road” initiative in Argentine Patagonia. It also includes projects of strategic importance not only for China and Argentina but also for Chile.

The first is the Chinese satellite station Espacio Lejano, already installed in a 200-hectare site ceded by the government near Las Lajas, Neuquén (at the latitude of the city of Victoria and only 73 kilometers from the Chilean border). Formalized during the mandate of Cristina Fernández and operational since 2017, the secrecy with which that Chinese facility in Patagonia is handled has generated multiple speculations and expressions of concern. That facility is operated only by Chinese officials belonging to a space program that depends directly on the Chinese People’s Army.

This “detail” even motivated the Chancellor of Macri’s government to doubt how the Chinese government operates this facility on Argentine soil, which, centered around a huge 16-story antenna, in principle has “exclusively peaceful purposes”. That, however, has not been proven.

In practice, this sophisticated Chinese satellite station (installed a few kilometers from Chile’s border) can be considered part of a strategic deployment that has incorporated Patagonia in the geopolitical chessboard that immediately confronts China with the United States and its allies in the Western Pacific region, and now by extension includes the southern cone of the American hemisphere.

Precisely for this reason, members of the U.S. Congress and State Department officials have drawn attention to the disruptive effect of China’s incursion into Argentina, a country whose government has been asked to be “prudent” in its relationship with Beijing. Even some Republican representatives have called on their government to act accordingly, pointing out that the Chinese presence in Patagonia is incompatible with the “Monroe Doctrine”, an argument that nevertheless recalls the anachronistic “spheres of influence” of the 20th century (the Russian view on Ukraine that the United States rejects).

In addition to U.S. concern about the aforementioned special station, there is an initial credit of US$15 billion to develop two nuclear power plants. The first of these -Atucha III- was announced last January about 100 kilometers north of Buenos Aires. Together with the dams in Santa Cruz, this project will strengthen the Chinese presence in the Argentine energy sector, to which another plant, Atucha IV, will be added shortly in the same sector.

Chinese investment in Argentina also includes essential infrastructure and transportation projects, among them, the possible Chinese financing of the Aguas Negras low altitude tunnel (to link our Fourth Region with the Province of San Juan) and the development of a “logistics pole” in Ushuaia on land belonging to the Argentine Navy.

In the latter case, these would be facilities and docks not only to strengthen that city on the Beagle Channel as the “main gateway to Antarctica” (above Punta Arenas or Puerto Williams) but also as a center for processing and dispatching Chinese fishing in the Southeast Pacific, the South Atlantic and the American sector of the Southern Ocean.

In this case, the recognized depredation of the highly migratory fishing resources of the Argentine sea, caused by huge Chinese fleets fishing in the adjacent area, does not seem to affect the cost-benefit equation which, if for China is of tactical importance, for Argentina it is of strategic importance since it contributes to consolidate Ushuaia as a neuralgic point of Antarctic operations.

While Argentina continues to be subjected to the ups and downs of its already historically conflictive relationship with the international financial community (in general) and the IMF (in particular), access to the generous offer of Chinese credit seems to solve the financing problems of a federal state that is finding it increasingly difficult to finance its public works plan. From this point of view, Argentina constitutes an “ideal client” for Chinese banks, which, like the rest of the organizations in that country, ultimately depend on the Communist Party that has transformed China into the first one-party capitalist dictatorship in the world’s history.

It remains to be seen what China will demand from Argentina in exchange for the massive financing of its main public works. In the case of the southern zone (Patagonia and Tierra del Fuego), the presence of Chinese capital destined to control activities of profound strategic importance (energy and transport) raises, by extension, fundamental questions for Chile.

In the case of the satellite station in Neuquén (evidently military), what is its significance for hemispheric security and Chile’s security?

In the case of the Santa Cruz River power plants, how sure are we that the waters of the Santa Cruz River are not shared resources with Chile? If that is the case, does Chile have anything to say?

In the case of the “Chinese logistic pole in Ushuaia”, it is worth exploring whether this may – or may not – affect the modus vivendi of the 1984 Treaty of Peace and Friendship in the shared sector of the Beagle Channel (Chinese fishing fleets in that sector). Likewise, if China’s position in the Beagle becomes a reality, could this mean that this power will join Argentina’s aspiration to gain access to Chilean inland waters, for example, to the Murray Channel to access Cape Horn and, from there, directly to Antarctica, or to sail westward without stopping for the respective control in Punta Arenas?

The Chinese incursion into Patagonia and Tierra del Fuego is a developing phenomenon (in Chile, there is the case of the Southern Optical Fiber). The amount of the enormous financial and technological resources invested and the strategic connotation of some Chinese projects merit close monitoring of the matter.

The government that will take office in Chile next March should take note.