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China commits $15 billion in development funds for Latin America

June 27, 2012 |  2:21 pm

Chinese Premier Wen Jiabao in Santiago, Chile
SANTIAGO, Chile -- In a bid to strengthen ties with an important regional trade partner, Chinese Premier Wen Jiabao told a U.N. economic conference in Chile on Tuesday that his country was ready to invest and lend $15 billion for Latin American infrastructure, manufacturing and sustainable technology projects.

Wen wound up his state visit to Latin America with a stop in Santiago, the Chilean capital, where in talks with President Sebastian Pinera he promised to double bilateral trade, now worth $30 billion a year, by 2015. China is a major customer for Chile’s copper, fruit and wine exports.

Wen said $10 billion of the development funds would come in loans from the Chinese Development Bank for roads, ports and railways, and $5 billion would be placed in a "cooperation fund" that would finance new technologies. He also said his country would increase the scholarships available to Latin American students to study in China.

The aim is to help the region develop more value-added exports than just natural resources, he said.

"China has become the biggest market for several Latin American countries," said Wen, who was making his third state visit to the region. He also praised the region for having so far withstood the ripple effects of the U.S. and European financial crises of recent years, saying it has demonstrated "cohesion, action and influence."

Alicia Barcena, executive secretary of the U.N.’s Economic Commission for Latin America and the Caribbean, which hosted the event, said China was "quickly changing the global economics map" with its demand for natural resources.

But China is seeking more balanced trade and, toward that end, will host a China-Latin America business conference in Hangzhou in October, at which leaders will discuss ways to increase "business reciprocity" in the region.

Wen said China, which already has a free-trade agreement with Chile, wants to forge one  with the Mercosur trade bloc, made up of Brazil, Argentina, Uruguay and Paraguay. With such deals, China could by 2017 double its trade with Latin America, which now totals about $200 billion per year, he said.

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-- Fabiola Gutierrez in Santiago and Chris Kraul in Bogota, Colombia

Photo: Chinese Premier Wen Jibao speaks at a gathering hosted by the U.N.'s Economic Commission for Latin America and the Caribbean in Santiago, Chile, on Tuesday. Credit: Mario Ruiz/European Pressphoto Agency

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