China Proposes $10 Billion Loan for Latin America Countries

China has proposed a $10 billion loan fund for Latin America, reportedly with no strings attached. The loan, intended for infrastructure, could benefit China as well as Latin America. China is courting greater trade opportunities with Latin America. The region is rich in natural resources, including oil, commodities and hardwood, all of which China consumes in large quantities. China expects the loan to quiet calls for protectionism and promote cooperation on cross-Pacific trade. Chinese Premier Wen Jiabao is also encouraging Latin American banks to engage in currency swaps with renminbi, bringing local currencies to the fore and reducing reliance on US dollars in trade. Such arrangements also help increase the circulation of the Chinese national currency. , with its main unit the yuan. China is transparent in its effort to put the Chinese currency in competition with the US dollar. – YaleGlobal