November 23rd, 2010 | Xinhua IDB, Eximbank ink deal to boost China-Latin America trade finance
The Export-Import Bank of China and the Inter-American Development Bank (IDB) have committed to finance up to $200 million worth of trade activity between China and Latin America and the Caribbean (LAC) region over the next two years, bank sources said Saturday.
The Letter of Intent was signed by the both parties at the China-LAC Business Summit held in Chengdu, southwest China’ Sichuan province, which ended Friday.
The partnership is part of the IDB’s Trade Finance Facilitation Program which supports trade activity by providing credit guarantees and loans to boost trade financing for Latin American and Caribbean companies.
China Eximbank’s co-financing under the agreement will be exclusively for trade between LAC and Chinese companies, officials with the bank said.
“Since trade is a fundamental economic driver of both LAC and China’s economies, we believe the partnership between China Eximbank and IDB to be a groundbreaking initiative to support increased trade activity,” said IDB President Luis Alberto Moreno on the bank’s website.
China Eximbank is State-owned and under direct control of China’s State Council. It acts as a key channel of financing in line with government policy for China’s import-and-export firms and companies undertaking offshore construction and investment contracts.
China-LAC trade grew at an average annual rate of 31 percent from 2000 to 2008, figures of the IDB show. Even during the global economic meltdown the bilateral trade maintained its dynamism, it said.
The bilateral trade reached $121.5 billion in 2009.
China is the largest trade partner of Brazil and Chile and the second largest trade partner of Argentina, Costa Rica and Cuba. For the entire LAC region, China is its fourth largest export market.
In January 2009, China became a member of the IDB, which is the largest regional development bank and the main source of multilateral finance for the LAC region.
The China-LAC Business Summit was hosted by the China Council for the Promotion of International Trade (CCPIT), the People’s Bank of China (PBC), IDB and the Sichuan Provincial Government.
Wan Jifei, head of the CCPIT, told reporters that China aims to accelerate trade with Latin America by signing more Free Trade Agreements (FTA), especially regional economic powerhouses like Brazil and Mexico.
“China now has FTAs with Chile, Peru, and Costa Rica, and once more FTAs are signed with other LAC countries it may be possible for China to sign a FTA with the region, resembling the one between China and the Association of Southeast Asian Nations (ASEAN),” Wan said.