Power Play

Argentina’s financial crisis has left it increasingly beholden to Beijing

- Jonathan Gilbert

Set on a remote steppe in Patagonia, where the winds howl and guanacos bound through the brush, the twin dams on the Santa Cruz River are in the early stages of construction, but they’re already relics of a bygone era. The $4.1 billion concrete mammoths are Argentina’s first major hydroelectric project in a quarter-century. Harnessing rivers to generate power has become passé in an age when wind and solar are ascendant, and natural gas is plentiful and cheap in many parts of the world.

There’s a one-word answer to why the South American nation is bucking the trend: China. Argentina is in the grips of a financial crisis that has all but locked it out of credit markets and paralyzed investment. President Mauricio Macri, who at one point seemed about to pull the plug on the Chinese-financed power plants, has little choice but to allow construction to go forward as he campaigns for reelection in October. “Macri staked his presidency on the arrival of investments, but he’s ended up fighting one economic fire after another,” says Francisco Urdinez, an assistant professor at the Pontifical Catholic University of Chile who specializes in Sino-Latin American relations. “Any sort of project that can go ahead is therefore very important for him, and that’s what China is providing.”