China’s Wen offers $10 billion Latin America credit line
SANTIAGO (Reuters) - Chinese Premier Wen Jiabao wrapped up a tour of resource-rich Latin America yesterday by offering $10 billion in credit for infrastructure projects and calling for a joint push to combat protectionism.
Wen proposed a free-trade deal with the Mercosur bloc and signed a series of investment accords during the trip to the region, a key source of agricultural and mineral commodities and a growing market for Chinese exports.
“The Chinese government … will continue to offer economic assistance to countries in the region that are interested,” Wen told the UN regional economic body ECLAC in Chile, the world’s No 1 copper exporter.
He said China’s Development Bank would implement a $10 billion credit programme for infrastructure projects. He also said China would also create a $5 billion fund for cooperation between China and Latin America and the Caribbean.
“We have to combat trade protectionism (and) broaden the mutual openness of our markets,” Wen added.
Fears of a hard landing in China, the world’s No 2 economy, have sent jitters through Latin America, as the Asian giant’s annual growth target for 2012 looks increasingly in jeopardy as demand at home falters and Europe’s debt crisis worsens.
Wen said China and Chile planned to double bilateral trade flows to $60 billion by 2015. China is the world’s biggest consumer of metals, including Chilean copper.
“These are two countries that can perfectly complement each other, most of all because Chile is a highly rich country, intensive in commodities that China is going to need to continue growing at the same rhythm,” said Benjamin Sierra, financial markets economist at Scotiabank in Santiago.
China has made relatively few major investments in Chile, however, despite being its main trade partner and sharing a free-trade agreement.
Yesterday, Wen signed accords with Chilean President Sebastian Pinera to strengthen legal safeguards for investors from either country.
In another accord, Chinese renewable energy company Sky Solar, state-backed China Development Bank and Chilean industrial group Sigdo Koppers said they planned to make a Chinese firm’s biggest investment in the Andean country by building a $900 million solar energy park.