China has announced that it intends to extend the “Belt and Road” initiative to Brazil and other South American countries in a move interpreted by analysts as a way of taking advantage of the US retreat in its relationship with the region.
During China’s most recent meeting with the Community of Latin American and Caribbean States (CELAC), on 22 January Chinese Foreign Minister Wang Yi formally invited the region’s countries to join the Chinese initiative, in line with suggestions made previously by President Xi Jinping.
Economist Octaviano Canuto, chief executive of the World Bank, underlined in a recent article that the Chinese approach comes at a time when US President Donald Trump has announced that his country would withdraw from the Trans-Pacific Partnership (TPP) launched by his predecessor.
Canuto wrote that the “Belt and Road” initiative could be a new phase of Chinese export and investment growth, bringing new life to the earlier pattern of trade integration by building infrastructure in many countries, most of the emerging markets.
The value of investments already made by China in South America totals US$207 billion, US$50 billion of which in Brazil, and Chinese trade with countries in the region already exceed US$ 200 billion, according to figures released by the Chinese Embassy in Brazil.
Yang Song, the business attaché at the Chinese embassy in Brazil, told the Folha de São Paulo newspaper, referring to the United States’ stance, that “while there is someone in the US closing the door at the moment, we (China) are opening it.”
Infrastructure, telecommunications, technology, energy, and food are China’s priority areas in the region, according to Yang Song.
The Brazilian representative at the meeting between CELAC and China, Marcos Galvão, Secretary-General of the Ministry of Foreign Affairs, said that the participation of South American countries in the “Belt and Road” initiative increases opportunities for closer relations.
Chinese President Xi Jinping announced a figure of 540 billion yuan (US$78.2 billion) for projects included in the New Silk Road Initiative, and an additional 100 billion yuan (US$14.5 billion) for the Silk Road Fund, set up in 2014 to finance infrastructure projects and provide 60 billion yuan (US$8.8 billion) in aid over the next two years to developing countries and international organisations taking part in the initiative.
Portugal and Cao Verde (Cape Verde) are the Portuguese-speaking countries that have so far shown interest in the Chinese initiative, which involves two banks – the China Development Bank and the Export-Import Bank of China – that will grant special loans of up to 380 billion yuan (US$55 billion).(macauhub)