China yesterday unveiled a plan to inject cash to finance development in resource-rich Portuguese-speaking countries, in a package of measures announced in Macau yesterday.
The move aims to expand Beijing's presence in the markets, which have a total population of 220 million.
Premier Wen Jiabao unveiled the plan to push deeper into the markets of seven Portuguese-speaking, or lusophone, countries in front of leaders of the seven: Brazil, Portugal, Angola, Mozambique, Guinea-Bissau, Cape Verde and East Timor. Sao Tome and Principe, which has diplomatic ties with Taiwan, is the only Portuguese-speaking state which did not attend the Third Ministerial Conference on the Forum for Economic and Trade Co-operation between China and Portuguese-speaking Countries.
It is the first time a Chinese state leader has attended the conference, first held in 2003 and again in 2006.
Kwan Fung, head of the University of Macau's economics department, said of the push: 'It highlights that Beijing wants to broaden the basis of its international trade, adjusting its reliance on trade with the developed nations, after the financial crisis.
'Beijing is also eyeing the natural resources in these countries. It is easier for them to expand in these countries than in the developed nations, which have more conflict with China.'
Mainland and Macau banks will set up a US$1 billion development fund to finance trade co-operation.
Other cash incentives include providing low-interest loans of up to 1.6 billion yuan (HK$1.87 billion) to the poorer lusophone countries, double the loans that Beijing offered to these countries at the forum's previous meeting.
Wen said China would sell more consumer goods to lusophone countries, while opening up its domestic market to their agricultural products.
He said bilateral trade would focus on electrical and mechanical goods and services, and China would increase investment in infrastructure, construction, telecommunications, energy and agriculture.
'Chinese companies have edges in infrastructure while the Portuguese-speaking countries have a big market,' Wen said. 'These will be the growth areas of bilateral trade in future.'
Chinese banks will set up branches in lusophone countries. Bank of China has a branch in Brazil, and Industrial and Commercial Bank of China has plans to set one up in Portugal.
Trade between China and the seven countries has exploded in the past decade, rising from US$10 billion in 2003 to US$77 billion in 2008. Trade in the first nine months of this year reached US$68.2 billion. Wen expects that trade will reach US$140 billion three years from now.
As a former Portuguese territory, Macau, with its 2,000-plus Portuguese residents, has been promoting itself as the natural supplier of intermediary services needed for trade between China and the lusophone countries.
Jose Coutinho, councillor for the Portuguese community, said that, as many officials in lusophone countries had received their education in Macau, they maintained formal and informal ties with the Portuguese-speaking community in the enclave.
Beijing will also provide technical and financial assistance in bilateral agricultural programmes, scholarships and training to officials from the lusophone bloc. The poorer nations will receive 10 million yuan in assistance for improving their medical equipment and infrastructure from Beijing.
The lusophone markets have a total population of: 220m