Major economic reforms in Argentina, new opportunities for China-Argentina trade

According to the Buenos Aires Herald, on the evening of December 10, local time, Argentine President Mille announced a package of economic policies in a televised speech marking his first anniversary in office, including the abolition of 90% of current national taxes and the permanent abolition of currency controls in 2025. This move is expected to bring new development opportunities for China-Argentina trade.
Policy content and reasons
Tax reform: Mille said his team is completing a structural tax reform that plans to reduce national taxes by 90%, while restoring the fiscal autonomy of local governments and allowing them to manage taxes independently. The reform aims to simplify the tax system, reduce bureaucratic inefficiencies, eliminate the existing tax system's obstacles to economic growth, enable enterprises to develop more freely and create more jobs, and thus promote Argentina's economic growth.
Remove dollar controls: The currency controls implemented since 2019 stipulate that Argentines can only legally purchase $200 per month in banks. Starting in 2025, this control will be permanently lifted. In addition to the tax system, the Argentine domestic market will be free to use the local currency peso and other currencies for transactions and settlements. Mile believes that the removal of currency controls can attract foreign investors, inject vitality into the Argentine economy, and promote the development of international trade.
Positive impact on China-Argentina trade
Reduced trade costs: Argentina's reduction of 90% of national taxes will directly reduce the operating costs and trade costs of Chinese companies in Argentina. The prices of Chinese exports to Argentina are more competitive, which is conducive to expanding the share of Chinese products in the Argentine market. At the same time, Argentina's products exported to China will also have more price advantages due to lower costs, stimulating the Chinese market's import demand for Argentine products and further promoting the expansion of bilateral trade. For example, China's manufacturing products such as machinery and equipment, electrical and electronic products, and Argentina's agricultural products such as soybeans and meat are expected to trade more frequently.
Strengthening investment cooperation: Tax reform and the removal of dollar controls will significantly improve Argentina's investment environment. The investment costs of Chinese companies in Argentina will be reduced, and the return on investment is expected to increase, which will attract more Chinese companies to invest and set up factories in Argentina and carry out cooperation in infrastructure construction, energy development, manufacturing and other fields. At the same time, it will also facilitate Argentine companies to seek investment opportunities in China, strengthen cooperation between the two sides in science and technology, innovation and other fields, achieve complementary advantages, and promote industrial upgrading of the two countries.
Improved trade facilitation: After the removal of dollar controls, Chinese and Argentine companies will have more options and greater flexibility in trade settlement, which can reduce exchange rate risks and transaction costs. In addition, the Argentine government also plans to promote a free trade agreement with the United States and reform the Southern Common Market to eliminate internal tariff barriers, which will further optimize the regional trade environment, provide more convenient conditions for China-Argentina trade, and promote the improvement of trade liberalization and facilitation levels.
Market vitality stimulation: These reform measures will stimulate the vitality of Argentina's domestic market, improve the production enthusiasm and innovation capabilities of enterprises, promote economic growth and the expansion of the consumer market. Chinese companies can take advantage of this opportunity to further tap the potential of the Argentine market, expand their business areas, launch more products and services that meet local market needs, meet the growing and diversified needs of Argentine consumers, and further consolidate and deepen China-Argentina trade cooperation.