* Chinese Premier Wen on last stop of Latin America tour
* Says China, Latin America should combat protectionism
* Proposes development bank finance for infrastructure
* China aims to propel Latam trade to $400 bln in 5 yrs
By Anthony Esposito
SANTIAGO, June 26 Chinese Premier Wen Jiabao
wrapped up a tour of resource-rich Latin America on Tuesday by
offering $10 billion in credit for infrastructure projects and
calling for a joint push to combat protectionism.
Wen proposed a free-trade deal with the Mercosur bloc and
signed a series of investment accords during the trip to the
region, a key source of agricultural and mineral commodities and
a growing market for Chinese exports.
"The Chinese government ... will continue to offer economic
assistance to countries in the region that are interested," Wen
told the U.N. regional economic body ECLAC in Chile, the world's
No. 1 copper exporter.
He said China's Development Bank would implement a $10
billion credit program for infrastructure projects. He also said
China would create a $5 billion fund for cooperation between
China and Latin America and the Caribbean.
"We have to combat trade protectionism, broaden the mutual
openness of our markets, optimize the trade structure and
diversify cooperation in terms of customs and quality control,"
Wen said. He added that China aims to nearly double trade with
Latin America in five years to over $400 billion.
Last year, 8.9 percent of all regional exports were destined
for Chinese shores and 13.8 percent of imports were made in
China, as trade between the Asian giant and Latin America and
the Caribbean surged nearly 30 percent in the 2005 to 2011
period, according to ECLAC data.
"China wants to have more balanced trade with Latin America
... we hope that in the future we can import more types of
products, including value-added products," Wen said.
The head of ECLAC, Alicia Barcena, welcomed Wen's words to
improve trade ties and diversify away from commodities-based
"It's very interesting that (Wen) came to the region to
deliver a message that China isn't only interested in Latin
America's and the Caribbean's raw materials, but that it wants a
long-term strategic relationship," Barcena told Reuters. "That's
very good news for the region."
CHINA HUNGRY FOR FOOD SECURITY
Fears of a hard landing in China, the world's No. 2 economy,
have sent jitters through Latin America, as the Asian giant's
annual growth target for 2012 looks increasingly in jeopardy as
demand at home falters and Europe's debt crisis worsens.
"China is also considering the possibility of negotiating
and signing agreements for local currency swap agreements ...
and increasing the reciprocal creation of bank branches," Wen
The Chinese leader also called for cooperation from regional
leaders on food security and to that effect invited Latin
American and Caribbean agriculture ministers to a meeting in
China in 2013.
"We also propose to establish between China and the region
an emergency food reserve mechanism of 500,000 tons, which will
be used for natural disasters and humanitarian aid," Wen said.
Earlier on Tuesday Wen said China and Chile planned to
double bilateral trade flows to $60 billion by 2015. China is
the world's biggest consumer of metals, including Chilean
"These are two countries that can perfectly complement each
other, most of all because Chile is a highly rich country,
intensive in commodities that China is going to need to continue
growing at the same rhythm," said Benjamin Sierra, financial
markets economist at Scotiabank in Santiago.
China has made relatively few major investments in Chile,
however, despite being its main trade partner and sharing a
On Tuesday, Wen signed accords with Chilean President
Sebastian Pinera to strengthen legal safeguards for investors
from either country.
In another accord, Chinese renewable energy company Sky
Solar, state-backed China Development Bank and Chilean
industrial group Sigdo Koppers said they planned to make a
Chinese firm's biggest investment in the Andean country by
building a $900 million solar energy park.