Fri | Jan 18, 2019

China plans US$250b boost in investment in Latin American, Caribbean

Published:Sunday | January 11, 2015 | 12:00 AM
Chinese Foreign Minister Wang Yi, right, acknowledges Costa Rica's Foreign Minister Manuel Gonzalez during a press conference at the Diaoyutai State guesthouse after a two-day meeting between China and Latin American and Caribbean countries in Beijing, Friday, January 9, 2015. China's hosting this week of a forum with 33 Latin American and Caribbean countries highlighted what some see as a rivalry for influence in Washington's traditional backyard. (AP Photo/Ng Han Guan, Pool)

Chinese President Xi Jinping hailed growing ties with Latin America on Thursday, pledging to use his country's economic clout to support billions of dollars in regional projects and almost double two-way trade to US$500 billion over the next 10 years.

Xi held talks with officials from left-leaning nations in the Western Hemisphere a day after meeting Venezuelan President Nicolas Maduro, who said he received pledges of US$20 billion in Chinese investment in his country's beleaguered economy.

Xi emphasised the potential for future growth in ties between China and the grouping of more than 30 nations known as the Community of Latin American and Caribbean States, which together account for one-eighth of the global economy.

Late Venezuelan President Hugo Chavez and other leftist leaders pushed the bloc as an alternative to US-led regional organisations.

"I am sure that this meeting will yield rich results and send to the world a strong message of our commitment to deepening cooperation for common development," Xi said.

He emphasised China's commitment to an independent foreign policy and to maintaining an equal partnership with the region, comments likely to appeal to many in the grouping who resent what they see as unfair dominance by the United States.

Trade between China and the region grew from US$10 billion in 2000 to US$257 billion in 2013, driven largely by Chinese demand for commodities such as crude oil and soybeans. While slowing growth in China will soften demand for such products, Xi said Latin America and the Caribbean would benefit heavily from forecasts of US$10 trillion in Chinese imports from the entire globe over the next five years.

Along with the targeted increase in two-way trade, Xi said he wants to increase direct investment in the region to US$250 billion over the next five years.

Last July, China extended a US$20 billion loan to the region for infrastructure development, another US$10 billion in preferential loans, a US$5 billion fund for cooperation between the sides and US$50 million for agricultural development.

Xi said the meeting would produce three documents, including one laying out cooperation goals through 2019 in diplomacy, trade, finance, energy and other areas.

The new partnerships raise pressure on the United States, which has traditionally enjoyed close economic, cultural and political ties with Latin American countries. All of the region's nations are scheduled to meet for the Summit of the Americas in April in Panama City, to be hosted by the Washington-headquartered Organisation of American States.

China has particularly strong ties with several Latin American nations that have clashed diplomatically with the United States, especially Venezuela. China is Venezuela's largest creditor and has loaned it more than US$40 billion over the past five years, some of which has been paid back in the form of oil deliveries.

Maduro said, after his meeting Wednesday with Xi that there was no word on any new loan package. He said the US$20 billion in investments would go to "projects with an economic, energy and social character" but didn't specify exactly how the money would be spent.

Chinese Foreign Ministry spokesman Hong Lei said the investment would go to energy, mining, agriculture and industry, including oil exploration in Venezuela, which has the world's biggest proven oil reserves.

Venezuela is struggling with one of the world's highest inflation rates, a recession and a cash crunch worsened by a steep fall in the price of oil. It has so far unsuccessfully urged OPEC nations to work together to drive up oil prices, which have fallen by half in six months. Venezuela depends on oil for 95 percent of its export income.

The presidents of Ecuador and Costa Rica were also in Beijing for high-level talks on Chinese trade, investment and financial support in Latin America. On Wednesday, Ecuador said it secured US$7.5 billion in credit from China.

- AP