The institution’s governor, Zhou Xiaochuan, called LatAm “a region full of potential” despite economic stumbles over the last year.
At this year’s Inter-American Development Bank meeting in Nassau, Bahamas, the governor of the People’s Bank of China, Zhou Xiaochuan, discussed LatAm at length. As part of his three page statement, and in the face of great economic uncertainty, Zhou asserted his belief that Latin American economies can resist their slowdown and attain growth again.
“Looking forward, although challenges and uncertainties still exist, we are confident that, as a region full of growth potential, the LAC (Latin American and Caribbean) countries have the capacity to handle challenges and secure sustainable economic growth.” Said Zhou.
China is currently the region’s second largest trading partner, and the first for Chile and Brazil. This means that it is in China’s best interest to help maintain a dynamic market in LatAm.
China’s concerns have been translated into action. In 2014, the East Asian giant set a 10 year plan to raise the annual trade volume to $500 billion dollars, and foreign direct investment to $250 million. Additionally, China has set several development funds for the region, including two worth $10 billion.
“We expect that these funds will provide financial support to local development by participating in cooperative projects in various forms including loan and equity investments,” explained Zhou.
The optimism should come as a surprise for analysts and leaders, as the same Inter-American development bank predicted a contraction of 0.3% during 2016, as a result of falling commodity prices. It also contradicts the grimmer prediction from the IMF of a 0.5% recession.
Still, despite all of the gloom that has carved its way onto the media, the statement from the People’s Bank of China should serve to reinvigorate efforts to leave stagnation behind, and if nothing else, should serve to cement China’s position as a reliable partner.
LatinAmerican Post |