China and Mexico to set up US$2.4b investment fund
China and Mexico will set up a US$2.4 billion investment fund to support infrastructure, mining and energy projects and are eyeing an oil deal worth up to US$5 billion, Mexican President Enrique Pena Nieto said yesterday.
Since Pena Nieto took office in 2012, he has sought to forge closer ties with China following years of rivalry between the two countries seeking to supply the United States market.
"I want to stress that the basis of our relationship is trust," Pena Nieto said after meeting President Xi Jinping. "Now, Mexico-China relations are broader, more stable, more productive and more beneficial for our people."
He also said three Chinese firms would invest up to US$5 billion to finance projects for oil company Pemex.
Pena Nieto and Xi oversaw the signing of 14 agreements, including a China Development Bank deal with Bancomex and Pemex to help with petroleum projects, as well as between Industrial and Commercial Bank of China and Pemex and oil giant CNOOC.
No details of any of the agreements were provided.
Pena Nieto also did not mention in his public comments Mexico's abrupt rescinding of a US$3.75 billion high-speed railway deal originally awarded to a Chinese-led consortium.
The consortium was led by China Railway Construction Corp and included train maker CSR Corp and Mexican firms.
Mexico cancelled the deal last week after lawmakers alleged the railway contract was rigged.
China has expressed shock at the cancellation, and Premier Li Keqiang told Pena Nieto this week that Chinese firms should be treated fairly.
The Ministry of Commerce said on Wednesday it believed there were legal grounds for compensation after the agreement was cancelled.
Development banks throw weight behind G20 plan for infrastructure initiative
The world's top development banks threw their support behind the Group of 20 plans for a global infrastructure hub to spur growth and create jobs, saying it is key to helping tackle poverty.
The G20 agreed in September to establish the global infrastructure initiative, expected to be based in Sydney, to share information about matching investors with projects.
Its main purpose is to cut red tape and close the "information gap" between potential investors and infrastructure projects as the G20 looks to spur world economies by shifting from government-led growth towards private-sector-led growth.
"We stand ready to bring our experiences and skills to the G20's work on infrastructure and support a proposed new global infrastructure hub," the world's top development banks said before a G20 leaders' meeting in Brisbane this weekend.
"Infrastructure is key to tackling poverty and promoting inclusive growth. Well-functioning infrastructure is essential … as an enabler of private-sector-led growth."
The funding shortfall for infrastructure projects in emerging and developing economies is broadly estimated at more than US$1 trillion per annum.