China Banks on Latin America

MIAMI, Nov. 18 /PRNewswire/ — Latin America’s rapid recovery from the global financial crisis, its abundance of raw materials and the burgeoning purchasing power of its people are driving China’s confidence in that region, said representatives of several Chinese banks during the 43rd Annual Assembly of the Latin American Federation of Banks (FELABAN).

“The future between Latin America and China is very bright. We’re at a moment of adaptation and growth that will lead to bigger and better exchanges,” said Shiqin Li, chief representative, Agricultural Bank of China.

“We need one another,” she added.

According to John Weinshank, senior VP, China Construction Bank, there is ample scope for bilateral trade due to China’s need for raw materials and Latin Americans’ enhanced purchasing power.

Feng Liu, first VP of the Bank of China, New York branch, predicted that trade flows (which totaled $140 billion in 2008) will grow between Latin America and his country, although he said it is a time for analysis.

“At this time, China needs raw materials and Latin America manufactured products. But, we need to study how these trends will change in the future in order to maintain a strong trade structure,” he said.

The panelists underscored China’s efforts to learn about Latin Americans’ needs with a view to future investment in manufacturing and other sectors.

“In the West it’s said that Rome wasn’t built in a day. In China, the proverb says it took a century to build the Great Wall. Likewise, China and Latin America need time to shape their (trade) relations,” he said.

For his part, Douglas Smith, Standard Chartered Bank’s head of research for Latin America, predicted that the “natural trade relationship between Asia and Latin America will expand in the future, including an increase in bilateral free-trade agreements between China and other countries of Asia and Latin America.”

Meanwhile, John Rodriguez, president of the Florida International Bankers Association, said that “both in Florida and Latin America we’re looking very carefully at China with a view to diversifying exports. At present, 10% of the region’s exports go to China.”

Ricardo Marino, president of FELABAN, said that “in a less robust global environment relative to the past, economic dynamism will have to come from China and other emerging countries.”

Like China, the U.S. government also expressed its confidence in the region. Dr. Nancy Lee, deputy assistant secretary for the Western Hemisphere, U.S. Treasury Department, said Latin America “has not had a financial crisis…This didn’t happen by accident, but rather by deliberate and sometimes difficult policy commitments made by many leaders in the region.”

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SOURCE FELABAN