China Gets Closer to Latin America with a US$ 350 Million Check

Inter-American Development Bank 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.  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.

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  • ch.c.

    And… I would not be surprised if the Yuan would replace the Dollar by… say 2060-70…
    And why not the UNSURE currency also replacing the EURO by 2060-70 ?

    πŸ˜€ πŸ˜‰ πŸ˜€ πŸ˜‰

  • ch.c.

    in addition to Brazilian, I’m also a FAITHFUL American Citizen, and have been a New Yorker for LONGER time that I’ve been a Carioca. As such, I have no intention of bring down my “other country” and w
    Good Augustus.
    Then why dont you re-say the same word for word…in the other thread…to Joao !!!!!
    Refresh His good memory ! Dont lose your time…..I will do it !

    πŸ˜‰ πŸ˜€ πŸ˜‰

  • Augustus

    CH-C
    Thanks.
    My comments about the rise of China were absolutely not based upon the single fact that they have joined the IDB… Rather I took this event as yet another “baby step” in the midst of the GIANT LEAPS taken by the People’s Republic of China since Richard Nixon visited Beijing in the early 1970’s…
    I do not expect them to be “governing the word” by the 2020’s or even the 2040’s… In fact, I no longer think they envision world domination… but rather PREDOMINANCE in a state of remaining SOLE super power.
    Please do not forget that, in addition to Brazilian, I’m also a FAITHFUL American Citizen, and have been a New Yorker for LONGER time that I’ve been a Carioca. As such, I have no intention of bring down my “other country” and would have hoped that its hegemonic position would prevail for at least another century…
    Yet, I fear its power (economic, military and EVEN cultural to a smaller extent) may have already been thoroughly exhausted… This vacuum, at least right now appears bound to be replace by China.
    And… I would not be surprised if the Yuan would replace the Dollar by… say 2060-70…
    Cheers

  • ch.c.

    when USA was replacing Great Britain as the planet’s main power… !!!!
    Somewhat right but not at all accurate for the reason !
    Augustus, you are very much educated and knows a lot of things on history. Right ?
    But eventually you dont know that little “detail” not much written about…on purpose :

    To have the USA enter WW2 in Europe, the forced deal with Churchill was…
    YESSSSS BUT….YOU LET US (USA) WITH THE HAND…ON WORLD FINANCES !
    Agreement signed with the Bretton Woods disguised accord, but some “details” not disclosed publicly.
    And with this agreement Europe got their reconstruction loan from the USA.

    And since then, it is the US$ that floods the world…no longer the Sterling.
    And it is also since then that most grains and metals are mainly traded in the U.S. exchanges in US$ and
    no longer in London in British Pounds…although some commodities still trade there…but also mostly in US$…and a few
    in BP ! Example : in London you have Cocoa traded in both US$ and BP..although the underlying specific terms of the contracts are not
    100 % the same.

    Now your meaning of will China replace the USA as the main superpower because of a starting US$ 350 million check, let me laugh ! Just look at Japan who already AGREED TO PUT UP AN…… ADDITIONAL US$ 100 BILLION…AT THE IMF !

    On the other hand will China surpass the U.S. economy the answer is YESSSSSS …. at one point in time… BUT may be only !
    The USA has a population of 300 millions, China 1350 millions.

    The question remains….. will China Currency govern the World ?
    It is not the economies that govern the World but the currencies.
    And it is not by having truckloads of foreign currencies that will make someone the STRONGEST !
    Look at Saudi Arabia ! Despite their very large cargoloads of foreign currencies and oil, who cares about the Saudi Currency ?

    And also look at Russia. They had US$ 600 billion in mid 2008, now around 450 B., in just 7 months. And this still did not avoided their currency to reach now an HISTORICAL RECORD LOW….against the US$ ! While they had only US 40 B. in 1998 at the time they defaulted, now with US$ 450 B., their currency is LOWER than when they had only 40 B. and were bankrupt !

    Simple proof that the foreign currencies reserves are good but only a small detail…within a much larger fundamental context !

    So much more to write about all this !

  • Augustus

    CHINA GRADUALLY REPLACES THE USA AS THE WORLD’S MAIN SUPER POWER – Baby step… by GIANT step…
    Amazing news! Yet, not at all surprising…

    Gradually, China is following the same Steps taken by the USA – during the early 20th century – when it was replacing Great Britain as the planet’s main power…

    In fact, for those of you who have young offsprings – particularly the pre-schoolers- learing MANDARIN as early as possible, as it will undoubtedly be a major requirement for ambitious professionals in the 2020’s-2040’s…

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