Wednesday, 10.29.08WASHINGTON -- As a sign of China's growing ties with Latin America, the Asian giant announced Thursday that it will join the Inter-American Development Bank, which is the primary multilateral lender focusing on the Western Hemisphere.
The move, which has been in the works for about a decade, comes as Chinese trade with Latin America booms on the strength of record exports of copper, soybeans and other regional commodities to the red-hot Chinese economy.
Chinese trade with Latin America skyrocketed to $110 billion last year from $8.4 billion in 1995, and China has become the region's second-biggest trading partner, behind only the United States. In 1995, China was Latin America's 12th-biggest trading partner.
"The biggest part of world trade growth is trans-Pacific," the development bank's president, Luis Alberto Moreno, said Thursday while announcing China's planned entry. "We're looking to follow those trends."
China will join the bank as a donor nation and will contribute $350 million to programs that fund everything from institution building to small business aid. The bank claims 26 borrowing member countries and 22 donor members, including Japan and South Korea. It approves an average of $8 billion in new loans and credit guarantees every year.
China's ambassador to the United States, Zhou Wenzhong, said at the bank's headquarters that such multilateral tools were the key to solving the international financial crisis, which threatens Chinese and Latin American growth.
Zhou said that Chinese economic expansion probably would slow to 8 percent next year, while the International Monetary Fund predicted Wednesday that Latin American economic growth would be around 3 percent.
The White House has invited China and other countries to participate in a meeting of the Group of 20 nations Nov. 15 that will tackle the global financial crisis.
"This is the moment for cooperation and dialogue and close consultations with all countries," Zhou said. "No one country can fix these problems."
Despite such diplomatic words, some U.S. observers say that China's rise threatens the United States' traditionally strong role in the hemisphere.
For example, Chinese trade with Brazil, which is Latin America's biggest economy, has swiftly surpassed even the strong ties between Brazil and its neighbor Argentina and is approaching levels of Brazilian trade with the United States.
Chinese investors also are pouring money into mining, energy and other Latin American ventures that can feed China's ever-growing appetite for raw materials.
Asked about such U.S. suspicions, Zhou said China's ambition in the region was cooperation, not dominance.
"We don't want to compete with the U.S. for anything here in Latin America," Zhou said. "What we're in favor of is peaceful development, harmonious development and sustainable development."
By JACK CHANG
McClatchy Newspapers
http://www.miamiherald.com/business/nation/story/738751.html
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China joins Inter-American Development Bank; plans to invest in Latin America
Chris Kraul reports:
In the latest sign of China's increasing economic stake and political muscle in Latin America, the Asian giant is joining a Washington-based international bank that finances development projects throughout the region.
China's membership in the Inter-American Development Bank, announced Thursday, is expected to increase the nation's profile and influence in a part of the world that historically has been under the sway of the United States.
China will invest $350 million in the bank and assume a role in its socially conscious projects, including efforts to mitigate poverty and global warming and to provide potable water, infrastructure improvements and micro-credit, bank President Luis Alberto Moreno said in an interview.
Analysts saw the move as providing the Chinese with a new forum to meet Latin American decision-makers and improve Beijing's image in the region.
SOURCE:
Los Angeles Times, LAT Home > Blogs > La Plaza
http://latimesblogs.latimes.com/laplaza/2008/10/china-joins-int.html
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October 24, 2008
China joins Inter-American Development Bank
Beijing could increase its profile and influence by financing projects in Latin America and the Caribbean.
Reporting from Bogota, Colombia -- In the latest sign of China's increasing economic stake and political muscle in Latin America, the Asian giant is joining a Washington-based international bank that finances development projects throughout the region.
China's membership in the Inter-American Development Bank, announced Thursday, is expected to increase the nation's profile and influence in a part of the world that historically has been under the sway of the United States.
China will invest $350 million in the bank and assume a role in its socially conscious projects, including efforts to mitigate poverty and global warming and to provide potable water, infrastructure improvements and micro-credit, bank President Luis Alberto Moreno said in an interview.
Analysts saw the move as providing the Chinese with a new forum to meet Latin American decision-makers and improve Beijing's image in the region.
Analyst Gary Hufbauer, senior fellow at the Peterson Institute for International Economics in Washington, said the Chinese could be seeking to outflank the United States in its own backyard.
"The U.S. is well prepared to meet Chinese challenges in the Taiwan Strait or the high seas," Hufbauer said. "It is poorly prepared to grapple with Chinese financial diplomacy, both because 'our' institutions -- the International Monetary Fund and the World Bank -- are small potatoes compared to the Chinese war chest, and because Americans don't think of national security in financial terms."
The importance of Latin America and the Caribbean to China is evident in growing trade, which has jumped thirteenfold since 1995, to $110 billion last year.
The Asian nation is now the region's second leading trade partner, after the United States.
Over the same period, U.S. trade with Latin America grew more slowly from a larger base. Trade between the two reached $588.4 billion in 2007, up from $201 billion in 1995.
"Membership in the [bank] is only one indicator of Beijing's pocketbook diplomacy," Hufbauer said.
"China has already been at work in Africa and Asia, and the global financial crisis will create abundant vineyards for future pickings."
China has announced plans to set up a sovereign fund to invest $200 billon in projects abroad, and Latin America could receive a significant share.
At the 2004 Asia-Pacific Economic Cooperation summit in Chile, China promised to invest $100 billion in Latin America over the next decade. After a slow start, Chinese money is starting to flow to projects such as a $3-billion steel factory going up near Rio de Janeiro, the largest single Chinese project in the region.
China has also established a multibillion-dollar social investment fund with leftist Venezuelan President Hugo Chavez, with whom it is about to launch a communications satellite.
China has looked increasingly to Latin America, which is rich in soy, wheat, corn, iron ore, copper and oil, for commodities to help expand its industrial base and provide for its increasingly affluent citizens.
Beijing has acquired oil assets in Ecuador, paying $1.4 billion in 2006, and bought a stake in an oil production company in Colombia.
China typically stays out of politics in countries where it invests.
"They aren't converting anyone to communism because they don't believe in it themselves," said University of Miami professor Michael Connolly.
But China does have an agenda in Latin America, said Evan Ellis at the consulting firm Booz Allen Hamilton in Arlington, Va.
China is irked by the diplomatic recognition of Taiwan by 12 Central American and Caribbean nations, he said, and could use the bank forum to lobby against such diplomacy.
SOURCE:
By Chris Kraul is a Times staff writer.
chris.kraul@latimes.com
LAT Home > World News > Latin America
http://www.latimes.com/news/nationworld/world/latinamerica/la-fg-chilatin24-2008oct24,0,5262469.story?track=rss
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Friday, October 24, 2008
China To Join IDB With $350 Million Contribution
“China will join the Inter-American Development Bank, or IDB, as a donor member, contributing $350 million to the multilateral lender.
The IDB said Thursday that China is aiming to build on its growing links with Latin America and the Caribbean. China will become the 48th member country in the Washington, DC.-based IDB, which claims to be the single largest source of long-term lending for the region. …” [Dow Jones/Factiva]
Asia Pulse adds that “… ‘We are thrilled to bring a large and growing economy like China into a community of nations that are working together to resolve the complex development challenges facing Latin America and the Caribbean,’ said IDB President Luis Alberto Moreno.
‘It is a historic decision that takes China's thriving commercial relationship with our region into the development sphere,’ he noted. …China's entrance was approved by other member countries in a month-long voting process ended on Oct 15. …China will purchase 184 shares, or 0.004 percent of the IDB's ordinary capital, which became available after the breakup of Yugoslavia. China will be the IDB's third East Asian member after Japan and South Korea, which joined in 1976 and 2005, respectively. …” [Asia Pulse (Australia)/Factiva]
Reuters notes that “…China has become the region's second-biggest trading partner after the US as trade between China and the region has jumped 13-fold since 1995 to $110 billion in 2007. … The US Treasury welcomed China's membership of the IDB, saying ‘it will strengthen the bank and make it more representative and reflective of the global economy.’ …” [Reuters/Factiva]
Los Angeles Times writes that “…Analysts saw the move as providing the Chinese with a new forum to meet Latin American decision-makers and improve Beijing's image in the region. …China has announced plans to set up a sovereign fund to invest $200 billon in projects abroad, and Latin America could receive a significant share. …’ [Los Angeles Times/Factiva]
SOURCE:
World Bank, News > Press Reviews
URL for this page: http://go.worldbank.org/GGNUO0IHT0
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,date:2008-10-24~menuPK:34461~pagePK:34392~piPK:64256810~theSitePK:4607,00.html
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China to join Inter-American Dev Bank with US$350 mln donation
Oct. 24, 2008 (China Knowledge) - China has agreed to donate US$350 million to join Inter-American Development Bank (IDB), in bid to deepen its economic relationship with Latin America and the Caribbean, according to the statement released by IDB. On Oct. 15, IDB's other member countries approved China to enter IDB as the 48th member after a month-long voting process.
SOURCE:
China Knowledge Online,
http://www.chinaknowledge.com/News/news-detail.aspx?type=1&id=18364
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