Chinese loans to Latin America plunge as virus strains ties

The Associated Press ^ | February 22, 2021 | By JOSHUA GOODMAN

[Oldeconomybuyer]

MIAMI - It seemed like a match made in finance heaven.

In 2010, China, its economy roaring and state companies looking to expand globally, set its eyes on Latin America, a region starved of capital but rich in natural resources the Asian giant lacked. The result: a record $35 billion in state-to-state loans that year.

Fast forward a decade and the once-torrid relationship is starting to mature in ways that suggest China may be growing wary of its once do-no-wrong partner.

For the first time in 15 years, China’s two biggest policy banks — the China Development Bank (CDB) and the Export-Import Bank of China — made no new loans to the region in 2020, capping a multi-year slump driven by Latin America’s worsening economic slide.

Meanwhile, the U.S. may have fallen even farther behind during the pandemic, when China donated more than $215 million in supplies — from surgical gloves to thermal imaging technologies — to allies in the region, according to the research. By comparison, the United State Agency for International Development and State Department has provided $153 million. China also conducted clinical trials or plans to manufacture vaccines in five countries — Argentina, Brazil, Chile, Mexico and Peru.

But while the pandemic has opened the door to much-welcomed Chinese aid, it’s also made it harder for governments to pay their bills to Beijing. A deep 7.4% recession in the Latin America and Caribbean last year wiped out nearly a decade’s worth of growth, according to International Monetary Fund data.

[Oldeconomybuyer]