The resumption of construction on the La Barrancosa hydroelectric dam (Governor Jorge Cepernic) in Santa Cruz, financed by the People's Republic of China, stands as a flagrant contradiction to the foreign policy of Javier Milei's government, which has been marked by a strong alignment with the United States and an explicit commitment to reducing Chinese influence in strategic sectors.

Just one week before a midterm parliamentary election in Argentina, where Donald Trump —who has reaffirmed his financial support for Milei's plan —is seeking to disrupt decades-old projects, specifically Chinese investments, this confirmation by the Santa Cruz government rekindles deep geopolitical tensions on the Argentine scene.

The news, released by Santa Cruz's Minister of Energy and Mining, Jaime Álvarez , about the signing of the letter between Energía Argentina (Enarsa) and Chinese financial institutions for the restart of the works, clashes head-on with the narrative promoted by Washington. The United States has conditioned millions in financial support (estimated at up to $40 billion according to reports) to the Casa Rosada in exchange for a "cooling" of ties with Beijing, including the review and potential halting of emblematic projects such as the dams.

The Santa Cruz Dilemma

The hydroelectric project on the Santa Cruz River, which includes La Barrancosa and Cóndor Cliff (Néstor Kirchner), represents a multi-million dollar investment ($4.7 billion USD) financed by China and is considered a strategic project for the national energy matrix . Its reactivation, promoted by Governor Claudio Vidal , of a different political persuasion than the Kirchnerism that conceived it, not only attracts 2,600 Santa Cruz workers, but also underscores the economic pragmatism of the province, which needs to reactivate its economy through infrastructure . Santa Cruz, a key territory for China also in port and fishing investments, prioritizes job creation and local energy development over national geopolitical guidelines.

Double play and financial risk for libertarians

For Milei's government, the continuation of the Chinese project in Santa Cruz represents a delicate balancing act . On the one hand, it seeks vital financial oxygen from the United States, necessary to sustain its economic plan in a context of currency flight. On the other hand, a complete shutdown of the dams would entail enormous financial and legal costs for China, which is also a key trading partner and supplier of the currency swap (almost $18 billion) that sustains the Central Bank's reserves.

The restart of La Barrancosa sends an ambiguous signal to Trumpism , which sees these Chinese investments as an "unsustainable strategic dependence." The provincial decision—which requires the approval and signature of the national state-owned enterprise (Enarsa)—suggests that the central government is unwilling, or unable, to completely break the status quo with Beijing, demonstrating that the need for foreign currency and infrastructure development often trumps ideological alignment in the complex geopolitical landscape. The project, initiated by Kirchnerism and suspended by Macri's administration, once again becomes a thermometer for the struggle between world powers in Argentina.