China’s president Xi Jinping’s visit to Brazil, Argentina, Venezuela and Cuba in the month of July was full of symbolism: it was his second visit to the region since being named president in March 2013; he was part of the presentation of the New Development Bank, a multilateral development fund operated by the BRICS states (Brazil, Russia, India, China and South Africa); and he made a strong case that China is interested in making friends in the Western Hemisphere, presenting himself as a diplomatic ally who wants to help the region wane down the United States’ influence there.
Then he signed a bilateral investment deals, he offered a $10 billion credit line to members of CELAC and a $5 billion Chinese-Latin American cooperation fund for investments. The reasons for the all-is-good feeling he portrayed all around are in four graphs you can see below. They come from a recent paper published by BBVA Research and titled ‘China: LatAm’s lender of last resort?’
After years of steady investing in the region China’s presence in Latin America is ever-growing. “The truth is that China has been an important financial player in LatAm for a solid number of years,” said the paper. Yet as symbolic as his visit was as a whole, the four countries he visited were certainly handpicked and closely connected with what capitals China’s lending is arriving at: “Over half of these loans went to Venezuela, followed by Argentina and Brazil, with the rest of LatAm accounting for slightly over 20%.”
Here are the graphs that illustrate the relation between China and Latin America:
Chinese lending to Latin America per year (Billion $)
Total Chinese lending between 2005-2013
Exports to China as a percentage of GDP
Chinese FDI flows into LatAm