China joins Latin American regional lender

24 Oct 2008 01:25:25 GMT
WASHINGTON, Oct 23 - China on Thursday became a member of the Inter-American Development Bank, the biggest lender to Latin America, at a time when trade and investment between the Asian giant and region is flourishing.

IADB President Luis Alberto Moreno said China planned to contribute $350 million to the IADB as a donor country. The money will be divided among various funds that lend to economic and development projects in Latin America and Caribbean countries.

China has become the region's second-biggest trading partner after the United States as trade between China and the region has jumped 13-fold since 1995 to $110 billion in 2007.

"As Latin America faces the shocks from the liquidity crisis we are working with governments to protect growth and social spending," Moreno told a news conference.

The U.S. Treasury welcomed China's membership of the IADB, saying "it will strengthen the bank and make it more representative and reflective of the global economy."

China has become an important consumer of commodity exports from countries in Asia, Latin America and Africa, but there is concern that should its economy slow with less demand from major economies, it may affect growth in these regions.

Moreno told Reuters that many Latin American economies have started bracing for slower growth levels, as the pace of global expansion is hit by the financial crisis.

"Latin American economies were pretty resilient, almost for a year since the crisis began, but since July things have started to move a little bit," he said. "There have been downward pressures on commodity prices and that certainly will have an impact on growth in Latin America," he added.

"We hope this year that, seeing this started late in eh year, growth will remain close to 4.5 percent as was projected," he added. Next year, however, growth "will look more like 3 percent, but could be lower."

China's Ambassador to Washington, Zhou Wenzhong, said Chinese membership will provide "both sides with a new platform and opportunity" for trade and investment.

"This will serve everyone's interest," he told the news conference. "China and the countries of Latin America and Caribbean are all developing countries. In political, social and in many other areas we are all much alike," he added.

New challenges facing countries, from climate change and energy demands, call for more cooperation among countries, Zhou added.
SOURCE:
Lesley Wroughton, Alibaba.com