I. Argentina: Glory of a Traditional Agricultural Powerhouse

Argentina is a globally recognized traditional agricultural powerhouse. Its vast and flat arable land, fertile soil, climate with synchronized rainfall and heat, and large-scale mechanized farming have collectively forged its core agricultural advantages of "high yield, low cost, and superior quality". For a long time, agriculture and animal husbandry have been the cornerstone of Argentina's economy. Agriculture and its auxiliary processing industries contribute more than half of the country's total export value and create nearly a quarter of its employment opportunities.

In the global agricultural landscape, Argentina holds a pivotal position: it is the world's third-largest producer of soybeans, fourth-largest producer of corn, twelfth-largest producer of wheat, and eighth-largest exporter of agricultural products. Among these, its exports of soybean oil, soybean meal, and soy flour rank first globally, and its corn exports rank second in the world. However, constrained by factors such as early development of agricultural and pastoral land, weak infrastructure, and a small domestic market, Argentina's agriculture is highly sensitive to international supply and demand. In recent years, it has shown a low-growth trend, with the proportion of agricultural GDP in total GDP fluctuating between 5% and 7% for a long time.

II. Industrial Pattern: Dominance of Grains and Oil Crops

(1) Soybeans: Core Pillar of Export Earnings

Soybeans are the "ace crop" of Argentina's agriculture, with a sown area accounting for more than 40% of the country's total arable land for a long time, and exceeding 50% at its peak. In the 2023-2024 production season, the output reached 48.21 million tons, accounting for 10% of the global total output, second only to Brazil and the United States. As the country's most important source of export earnings, soybeans and their by-products (raw soybeans, soybean meal, soybean oil, etc.) achieved an export value of 19.624 billion US dollars in 2024, accounting for 24.6% of the total export value. The three major markets of India, China, and Vietnam accounted for approximately 65% of the exports.

The Argentine government has guided the development of the domestic crushing industry through a progressive export tax (26% for raw soybeans and 24.5% for soybean meal), forming an export structure dominated by processed products and supplemented by raw soybeans. Soybean meal and soybean oil account for 53.8% and 33% of the total export value of soybean products respectively, while raw soybeans only account for 10%. In 2024, Argentina's soybean crushing volume reached 43 million tons, accounting for 18% of the global crushing market, significantly increasing industrial added value.

(2) Corn: An Emerging Crop with Prominent Potential

Corn is the grain with the largest sown area and output in Argentina, accounting for 30% of the country's arable land. In the 2023-2024 production season, the output reached 57.49 million tons, accounting for 4.3% of the global total. In terms of usage, one-third is used for domestic feed, starch, and ethanol production, and the rest is for export. In 2024, the export value of corn was 7.26 billion US dollars, ranking fourth among export categories, with Vietnam, Peru, and South Korea as the main destinations.

The unique advantages of corn cultivation have led to the continuous expansion of its planting area: compared with soybeans, its sowing "window period" is more flexible, which can avoid extreme droughts in January-February; coupled with the rising global corn prices and improved mechanization level, the proportion of corn in the agricultural structure is expected to further increase against the background of frequent droughts.

(3) Wheat: Traditional Guarantee for Regional Supply

As a traditional crop in Argentina, wheat once experienced a shrinking sown area due to the squeeze from high-profit soybeans, and has gradually recovered in recent years with the adjustment of soybean planting. In the 2023-2024 production season, the sown area was 5.91 million hectares, with an output of 15.81 million tons, accounting for 2%-3% of the global total; from 2020 to 2024, the export volume remained stable at 10-15 million tons per year, accounting for 7%-10% of global trade volume, with an export value of 2.76 billion US dollars in 2024.

Argentina's wheat exports are dominated by raw grains, with nearly 90% exported directly. Brazil (47.4%) and Indonesia (18%) are the core markets. Relying on geographical and climatic advantages, Argentina has become a major wheat self-sufficient country in South America, providing more than half of the wheat supply for neighboring countries such as Uruguay and serving as an important guarantee for regional food security.

III. Development Dilemmas: Structural Challenges from Internal and External Factors

(1) Land Concentration and Rural Decline

The prosperity of agricultural exports in the 21st century has driven capital inflows. Large farms have accelerated mechanization and monoculture, squeezing the living space of small farms. Over the past 30 years, the number of agricultural operation entities in Argentina has decreased by 41.5%. The top 1% of ultra-large farms control 40% of the arable land, while the bottom 80% of small farms only account for 11%. Land concentration has exacerbated rural decline.

(2) Systematic Shortcomings in Infrastructure

In the transportation field, the total length of railways has decreased from 47,000 kilometers in the 1950s to less than 18,000 kilometers in 2023. Grain exports rely on highways, but the hardening rate of rural highways is only 38%, and the average speed of trucks is less than 40 km/h during the rainy season; the equipment of Rosario Port is outdated and affected by river water levels, with an average waiting time of 15 days for ships. The drought in 2022 caused a 57% sharp drop in soybean exports at the port. Logistics costs account for 30%-40% of agricultural product prices, much higher than Brazil's 15%-20%.

Warehousing and water conservancy are also underdeveloped: in 2023, grain storage capacity could only meet 70% of the annual output, and 30% had to be temporarily stacked. During the soybean harvest season that year, more than 500,000 tons of crops were stored in the open air and suffered losses of over 500,000 tons due to heavy rain; small and medium-sized farmers have backward storage facilities, with an annual grain loss rate of 8%, which is four times that of the EU. In terms of irrigation, only 15% of the arable land has irrigation facilities, and 95% of the staple grain cultivation in the core Pampas region relies on natural rainfall. The drought in the 2022-2023 production season caused a 40% reduction in soybean output and a 28% reduction in corn output, with losses exceeding 20 billion US dollars.

(3) Monopoly Control by International Grain Merchants

Argentina's grain exports are controlled by the world's four major grain merchants (Cargill, Bunge, Louis Dreyfus, and ADM). In 2024, the export volume of the four major grain merchants accounted for 40% of the country's total. These giants control core links such as ports and warehousing through vertical integration of the industrial chain and horizontal acquisition of local enterprises - Cargill has an exclusive terminal in Rosario Port, handling 30% of Argentina's soybean exports; Bunge has promoted genetically modified soybeans in collaboration with Monsanto, controlling the production end through a "seed + pesticide" bundling model.

International grain merchants also transfer profits through transfer pricing, leading to the loss of Argentina's foreign exchange and tax revenue. At the same time, the monoculture model they promote has exacerbated soil degradation and eroded agricultural sustainability.

(4) Sustained Impact of Policy Volatility

Fluctuations in export tax and foreign exchange policies have become core obstacles. Since 2003, successive governments have frequently adjusted agricultural export taxes. The soybean export tax has long been higher than Brazil's 8%-10%, increasing corporate costs. Foreign exchange policies have been even more volatile: the fixed exchange rate in the 1990s led to overvaluation of the peso and suppressed exports, and the floating exchange rate in 2002 triggered long-term inflation. In recent years, foreign exchange controls have spawned a black market, with the exchange rate difference reaching up to 140%; in 2014, exporters were forced to settle foreign exchange at the official exchange rate, leading to grain hoarding and distorting the market. The Milei government's exchange rate liberalization reform has also been difficult to advance due to depleted reserves and high inflation.

IV. China-Argentina Cooperation: Strategic Opportunities for Complementary and Win-Win Outcomes

(1) Important Supplement for Diversified Imports

China's grain supply and demand show the characteristics of "food security for staple grains and shortage of feed grains". In 2024, China imported 105.03 million tons of soybeans (with a dependence rate exceeding 80%) and 13.64 million tons of corn, urgently needing diversified import channels. As China's third-largest soybean import source, Argentina exported 6.8 million tons of grain to China in 2024, a year-on-year increase of 37%, including 4.102 million tons of soybeans. Its counter-seasonal corn production (October to April of the following year) can fill the gap between the harvest seasons of northern hemisphere corn in China, providing a new option to reduce dependence on U.S. corn (accounting for about 70%).

(2) Ideal Location for Overseas Production Bases

China's per capita arable land is less than half of the world average. To completely replace soybean imports, an additional 788 million mu of arable land would be needed, which is 5 times the current soybean planting area (155 million mu) or 40% of the country's total arable land area, far exceeding domestic carrying capacity. Argentina has a per capita arable land of 0.93 hectares, ranking fourth in the world, behind only Kazakhstan, Australia, and Canada. Located in the southern hemisphere, Argentina has a natural seasonal complementary advantage with China in agricultural production cycles. With superior soil and climatic conditions, the yields of soybeans, corn, and other crops are higher than those in China, making it natural conditions to become China's overseas grain production partner. In 2024, the Milei government abolished the 15% ceiling on foreign ownership of agricultural land and fully liberalized restrictions on foreign investment in the purchase of rural/agricultural land in Argentina, providing policy opportunities for Chinese enterprises to build overseas planting bases in Argentina.

(3) Two-Way Empowerment of Infrastructure Cooperation

Compared with neighboring Brazil, Argentina's transportation, warehousing, irrigation, and other infrastructure are underdeveloped, seriously restricting its production potential. China's advantages in infrastructure construction, agricultural machinery, and digital agriculture are expected to help Argentina systematically break through the "bottleneck" of agricultural export efficiency. Previously, COFCO Holdings controlled the grain terminal of Rosario Port in Argentina and jointly built a railway line with the Argentine Agricultural Cooperatives Association (ACA) to connect grain depots with its own terminal, significantly improving grain transportation and unloading efficiency. For a long time, the special nature of overseas arable land, railways, ports, and other investments has made such investments highly sensitive and subject to foreign investment restrictions worldwide. Currently, the Argentine government is privatizing many key infrastructure such as state-owned railway freight companies and ports to attract investment, and has fully liberalized land restrictions, providing strategic possibilities for China to build a full industrial chain layout of "planting-processing-storage-transportation".

V. Reflections and Suggestions: Building a Multi-Level Cooperation System

China and Argentina have highly complementary agricultural supply and demand structures. The two sides can build a multi-level cooperation system in policy coordination, industrial chain structure, and financial support to jointly break through China's feed grain supply bottleneck and Argentina's agricultural structural contradictions. Firstly, promote the establishment of an intergovernmental agricultural coordination committee to regularly negotiate issues such as tariff quotas, mutual recognition of quarantine standards, and investment policies. Guide enterprises to expand crushing capacity in Argentina through tariff structures and tax incentives, and establish a long-term and stable bilateral agricultural tax framework. Secondly, prioritize the construction of infrastructure such as ports, railways, and grain distribution centers. Consider cooperating with local grain and agricultural organizations such as ACA to form a consortium and exchange equity or long-term soybean supply agreements for the construction of railway reconstruction, storage equipment, irrigation systems, and other projects. Thirdly, strengthen policy-based financial support, establish special loan programs to focus on supporting overseas arable land development, agricultural product processing, and related infrastructure projects, and improve insurance systems and other risk hedging tools. Fourthly, learn from the China-Brazil local currency settlement model, provide preferential treatment for agricultural products settled in RMB, improve supporting financial services, and promote the internationalization of the RMB.