Well, Milei's dollarization scheme, as far as I know, is about allowing the coexistence of the peso and the dollar, and letting the market (the people) decide which one they prefer. However, if I'm not wrong, bank deposits will immediately be dollarized, so they will need USD, and all assets belonging to the Central Bank will be sold... that includes its yuan reserves...

Argentinians hold an estimated 200 billion USD in cash, in literal USD dollar bills that they hoard. And a similar number is estimated to be held overseas. Perhaps he has a plan to allow or make attractive to all those Argentinian holders of USD, especially those overseas, to bring the USD in.