China offers US$10bn to Latin America

BEIJING // China has offered US$10 billion (Dh37 billion) in credit to Latin America, as Beijing seeks to improve its access to resources and provide new business opportunities for Chinese companies.

In a mirror of China's role in Africa, the China Development Bank credit facility proposed by the premier, Wen Jiabao, would help finance infrastructure projects that Chinese contractors could develop.

"The Chinese government ... will continue to offer economic assistance to countries in the region that are interested," Mr Wen said in Chile, during a tour of Latin America.

He also proposed a free trade agreement between China, the second-largest economy after the United States, and the South American common market, Mercosur, with the aim of doubling trade to $200bn by 2016.

By setting up the credit facility, China is "trying to make very good use of" its foreign exchange reserves, which are the largest in the world, said Joseph Cheng, a professor of political science at City University of Hong Kong. "The best way is to use this money as credit lines to promote infrastructure projects, helping Chinese companies to establish footholds in Latin America, Africa and third-world countries."

Analysts also said it was a way to improve access to resources such as copper and iron ore.