The International Financial System and Its Discontents China, Argentina, and the Contestation of Western-led Institutions

Abstract

As China’s economic rise unfolded over the last two decades, its dissatisfaction with the existing architecture of the global financial system has grown accordingly, creating a common ground between the PRC and several actors from the Global South. One manifestation of this convergence has been the proliferation of currency swap agreements between Beijing and many developing countries. This paper investigates whether those initiatives fit into Beijing’s larger strategy of contestation towards the existing Western-led financial system. It does so by looking at the case of Argentina. Two tentative conclusions are drawn: in line with Beijing’s overall contestation strategy, the swap deals do not yield disruptive effects on the current order; however, those arrangements contribute to strengthening China’s position and, by offering an alternative to other dissatisfied actors, they bear the potential to modify the architecture of the international financial system over the long run