China-Trade with South America on the increase.
CHINA-TRADE WITH SOUTH AMERICA.
— Trade between China and Latin America reached a record of more than US$140 billion last year, the governor of China’s central bank said yesterday, and pledged to help ease the economic crisis’s impact on the region.
Zhou Xiaochuan also said at the annual meeting of the Inter-American Development Bank that he did not know whether the crisis has hit bottom China, because that depends on the global situation.
China joined the IADB last year, investing US$350 million in the US$100 billion institution. The United States is the IADB’s largest shareholder, with a 30 percent stake.
"We see a huge potential in trade and cooperation between China and Latin American countries in the interest of both sides," Zuo said at the meeting, which formally gets under way today. Chinese direct investment in Latin America totalled US$24 billion last year, Zhou said, while its trade with the region was up nearly 40 percent from US$101 billion in 2007. He said a special team of Chinese consultants was studying ways to improve cooperation with the 48-member IADB. He did not, however, announce additional investment in the region’s principal multilateral lender, whose mission is to ease poverty and inequality in a region where the economic crisis is just now starting to bite.
China currently has US$2.2 trillion in foreign reserves, giving it potentially enormous global clout.
The IADB’s leadership is seeking to increase its capital at this meeting in hopes of disbursing a record US$18 billion in loans this year.
Bank president Luis Alberto Moreno, a Colombian, says the new infusion is crucial as the IADB replaces other international institutions as the lender of choice for many nations in the region.
However, there is no indication the US will support the capitalization, which would be the bank’s first since 1994. US Treasury Secretary Timothy Geithner, is due to attend today’s inaugural session of the bank’s governors and Zhou said the two planned to meet. Brazil and Argentina, the IADB’s second-largest shareholders with 10.7 percent each, are among members who back the capitalization idea.
