In a signing and flag placement ceremony held on Monday at the Inter-American Development Bank's headquarters in Washington, DC, China formally joined the IDB.Â The Asian giant became the Bank's 48th member nation, contributing 350 million US dollars to various programs.
The entry of China, an increasingly important trading and investment partner for Latin America and the Caribbean, takes place at a time when the IDB is striving to assist its borrowing member countries to deal with the impact of the global financial crisis. The region's economic growth is expected to slow down to around 2% in 2009 – its lowest level in six years.
"China's welcome addition to the IDB family will further strengthen our institution at a critical moment for the world economy, when countries need to protect recent social and economic gains," said IDB President Luis Alberto Moreno. "These challenging times require bold and unified actions that will be a key part of the agenda leading up to our Annual Meeting in March in Medellin, Colombia. China is an essential partner in the road ahead."
The IDB is the leading source of long-term lending for development projects in Latin America and the Caribbean, providing an array of services that range from technical know-how to grants for small enterprises.
In 2008 the IDB approved 12.2 billion US dollars in loans, credit guarantees and grants – a record level reflecting the requirements of its members amidst the global crisis. The IDB also approved a special 6 billion emergency liquidity program for its members, of which 900 million have already been allocated.
China was represented at the ceremony by its ambassador to the United States, Zhou Wenzhong. A delegation traveled from China led by Mme. Jin Qi, the director general of the international department at the People's Bank of China.
"Today is an exciting day; after 15 years of efforts, China becomes a formal member of the Inter-American Development Bank group" said Ambassador Zhou. "At the conjuncture of the current financial crisis, it is of greater importance to strengthen comprehensive cooperation between China and Latin America. China's accession to the IDB will create a new platform and opportunity to boost China-Latin American cooperation, hence a win-win choice for both sides."
Over the past decade China has become a major commercial partner for many countries in Latin America and the Caribbean. Trade between this region and China jumped 13-fold since 1995, from 8.4 billion to 110 billion USD in 2007. China is now the region's second biggest trading partner after the United States.
With China's addition, IDB membership now encompasses 40% of the world's population and nearly three-quarters of its GDP.
The Governor of the People's Bank of China will represent his country on the Board of Governors, the IDB's top decision-making body. Most IDB governors are either finance ministers or central bank presidents.