China is cure for Latin America woes

AsiaOne
China is cure for Latin America woes
Fri, Nov 21, 2008
Reuters

LIMA - CHINESE President Hu Jintao offered his nation's economic muscle to help Latin America weather global economic turmoil, in a speech on Thursday that marked another step in Beijing's campaign to raise its profile in the region.

In an address to Peru's Congress, Mr Hu made no mention of the United States and its regional dominance. But he made the case for China playing a bigger role across Latin America by combining its appetite for resources, investment potential and understanding of Third World concerns.

A global downturn may be sapping demand for Latin American goods, but China's economy will keep growing, Mr Hu assured the lawmakers.

'Development is the most pressing task for both China and Latin America,' Mr Hu said. 'In our cooperation we will take care of Latin America's legitimate concerns and strive to realise mutually beneficial gains for all.'

His speech came towards the end of a regional tour that also has taken him to Costa Rica and Cuba. Mr Hu has struck deals and bestowed economic aid along the way, and will attend the Asia-Pacific regional leader's summit in Lima set for this weekend.

Influence 'healthy thing'
Beijing does not see itself as jousting with the United States for influence, but sees opportunities to present itself as a steady and growing partner while Washington struggles to fix its economy, Chinese analysts said.

'Relative to the United States, China's regional influence remains limited, and that will not change anytime soon,' said Professor Huang Dahui of Renmin University in Beijing.

'But China's economic growth does give more room for us to take the initiative, and the financial crisis naturally also offers an opportunity to show the region that China's influence is a healthy thing, not a threat.'

At the heart of Beijing's regional ambitions are the ships hauling Latin American minerals and oil to China, and Chinese-made consumer goods flowing in the opposite direction.

'China and Peru have strong complementarity in the mining sector, and there is immense potential for cooperation,' Mr Hu said at a breakfast meeting with Chinese and Peruvian business executives.

He cited the Chinese metal giant Chinalco, which announced on Thursday it had won loans to finance a US$2 billion (S$3.06 billion) copper project in Peru.

Trade boom
Chinese trade with Latin American nations surpassed US$100 billion in value last year. In the first nine months of 2008 it already has reached US$111.5 billion, up 52 percent compared with the same period last year.

The Chinese Foreign Ministry issued the country's first policy statement on Latin America and the Caribbean this month, holding out the prospect of more trade agreements.

China has a trade pact with Chile, and on Wednesday Mr Hu and Peruvian President Alan Garcia said they had concluded negotiations for a similar deal between their countries.

Mr Hu told the business leaders that they could look for China to keep growing. 'Overall, the basic outlook for China's economic development has not changed,' he said. -- REUTERS