China pledges $250B investment in LatAm, Caribbean

The biggest investments include $20 billion for Venezuela's battered economy.

China pledges $250B investment in LatAm, Caribbean
World Bulletin / News Desk
 
 China will invest $250 billion in Latin American and Caribbean nations in the next 10 years, Chinese President Xi Jinping said Thursday.

Xi announced the investments on the first day of an historic two-day forum between Beijing and 33 nations of the Community of Latin American and Caribbean States, or CELAC. He said he believed bilateral trade between China and Latin America would reach $500 billion in the coming decade, signaling a new strategy by the Asian giant's to boost its presence in the region traditionally dominated by the United States.

"The right moment has arrived to make progress and cooperation between China, Latin America and the Caribbean, which together represent a fifth of the Earth's landmass, a third of the world population and an eighth of the global economy, and provides enormous resources to deepen economic ties," Xi was quoted by Venezuela's Noticias24 news site.

The Chinese leader said the talks -- that will aim to define strategies for cooperation for the next five years in a number of areas from business and energy, to security and technology -- marked a "new beginning and new opportunity" between China and CELAC, teleSUR reported.

Among the biggest beneficiaries will be Venezuela, which is set to get $20 billion in investments. President Nicolás Maduro held official talks with his Chinese counterpart Wednesday. Ecuador would also receive a credit line in excess of $7.5 billion, the Andean nation announced.

In comments broadcast on Venezuelan state television, Maduro said that the China Development Bank and the Bank of China approved "a series of financial deals" including "economic, energy and social projects." 

It was not specified whether the $20 billion investment would be provided as a cash transfer or as goods and labor from Chinese companies. 

China, the world's second-largest economy, has established itself as a key trading partner with Latin America -- buying oil from Venezuela, iron ore and soybean from Brazil, and copper from Chile and Peru. In return, it has provided access to credit and invested in a series of infrastructure projects, including the construction of roads and ports.

For David Rees, Latin America markets economist at Capital Economics, it was not clear whether Venezuela's $20 billion deal included projects that had been previously announced. 

"China is no longer in the business of simply handing out blank checks. These investments are increasingly ring-fenced as strategic projects for Chinese companies to undertake," he said.

"The underlying problem is that all its foreign currency comes from oil, and production and prices have both fallen. Venezuela has run its economy to the limits of its growth model, and is now looking for some hard cash," he added.

Maduro's visit to China is part of major global tour in which he is seeking to negotiate credit and secure cooperation from oil-producing nations to shore up falling oil prices, which have wreaked havoc on the South American nation's heavily oil-dependent economy that last week announced it was in a recession. 

After leaving China, Maduro will continue his tour in several OPEC nations, including Saudi Arabia, Iran and Algeria, to seek help with tumbling oil prices.

Rees said, however, that there has been no clear signal of any intention so far that these nations will reduce production to boost global oil prices -- something Venezuela desperately needs to increase export revenues.

 

Last Mod: 09 Ocak 2015, 09:45
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