China vows to double trade with Latin America to US$500b within 10 years
President Xi Jinping pledged yesterday to double annual trade between China and Latin America to US$500 billion over the next 10 years, saying the partnership would have a significant impact on the world economy.
President Xi Jinping pledged yesterday to double annual trade between China and Latin America to US$500 billion over the next 10 years, saying the partnership would have a significant impact on the world economy.
Xi vowed to increase China's direct investment in the region - seen as the United States' backyard - to US$250 billion within that time frame as he opened a forum with leaders and ministers from about 30 nations from Latin America and the Caribbean.
"The relationship between China and Latin America is on an upward trend," said Xi.
"Mutual political trust between the two has also been boosted."
The forum is part of Beijing's efforts to increase its presence in the region and comes amid concerns expressed by the US over a planned US$50 billion Chinese-led canal project in Nicaragua to rival the Panama canal.
Analysts said China's interest in the region was partly due to its energy needs, with some saying investment there was less risky than in Africa.
The two-day forum aims to boost cooperation on security, finance, infrastructure, energy and technology over the next five years.
Xi stressed the potential for the relationship, saying the region would benefit as Chinese imports from around the world grew to an expected US$10 trillion over the same period.
China's trade with Latin America totalled US$261.6 billion in 2013.
Analysts said investment in the region was risky as some national economies there were suffering, but that China was keen to secure energy and commodity supplies.
It was also keen to seek ties further afield amid souring relations with its neighbours and a strengthening US presence in Asia.
On Wednesday, China agreed to invest more than US$20 billion in struggling Venezuela following talks between Xi and the country's President Nicolas Maduro. China has loaned the country more than US$40 billion over the past five years, some of which has been paid back through oil deliveries.
During Xi's trip to the region in July, Beijing announced a US$20 billion infrastructure loan, a US$10 billion concessionary loan, the setting up of a US$5 billion China-Latin America cooperation fund and a US$50 million agricultural development fund.
Plummeting oil prices, to about US$50 a barrel, have left the economies of regional countries such as Venezuela in desperate need of financing, but have also triggered concerns for Chinese investments.
"Growing economic power has pushed China to invest more overseas where capital is needed, and raised China's demand for energy," said Jia Qingguo , an international relations affairs specialist at Peking University. "Some investments have had a low return or even lost, but China still has to pump money into these nations as the impact will be more severe if their economies collapse."
Xu Shicheng, a Latin American affairs expert at the Chinese Academy of Social Sciences, said investment in Latin America was less risky than in Africa.
"The political situation of Latin America is more stable," he said. "There is risk, but it is controllable."
Extensions to Chinese loans to Ecuador are also expected to be agreed at the forum.
This week the US embassy in Nicaragua expressed concern over a lack of information surrounding the Chinese-led canal project. Work started last month on the 278km canal, which will open a route between the Pacific Ocean and the Caribbean Sea. Its Hong Kong-based developer, HK Nicaragua Canal Development Investment, said it would be operational by 2020.
