China proposes $10bn loan for Latin America countries
China has offered to set up a $10bn (£6.4bn) credit line for Latin American countries to support infrastructure projects in the region. The proposal was made by China’s Premier Wen Jiabao as he wrapped up his visit to the region. He also proposed a free trade pact between China and South American trade bloc Mercosur, which includes Brazil, Argentina, Uruguay and Paraguay.
China has been keen to increase its trade with the region’s economies.
“The Chinese government… will continue to offer economic assistance to countries in the region that are interested,” Premier Wen was quoted as saying by the Reuters news agency.
Many of the Latin American countries are still at a development stage and are building new infrastructure in a bid to boost growth in their economies.
Meanwhile, China, which has the world’s largest foreign exchange reserves, has been looking to for new areas invest some of its cash.
At the same time, China’s infrastructure development companies have been keen to tap into new markets to expand their business.
Analysts said that the offer of a credit line by China, may turn out to be a win-win situation for both sides.
They explained that Latin American nations could benefit from Beijing’s expertise, while Chinese firms may play a big role in developments of these projects.
“China has the manpower and the technical skills required to undertake massive infrastructure projects and also the deep pockets to fund them,” Charles Chaw of China Knowledge Consulting told the BBC.
“They have proven their ability with success in their own country.”
Read the full story on BBC News
Category: World News |