Finance to LAC Still Surging, Despite Economic Slowdown
Washington, DC – On February 11, 2016, the Inter-American Dialogue launched an updated version of the China-Latin America Finance Database, featuring all Chinese state-to-state lending in Latin America and the Caribbean (LAC) through 2015. This database is the only public source of data on Chinese policy bank (China Development Bank and China Export-Import Bank) finance to Latin America. It features upwards of $125 billion in Chinese loan commitments to LAC nations since 2005.
Key findings on China’s 2015 lending to the region include the following:
- 2015 was the second highest year on record for Chinese finance in Latin America, with loans to the region topping $29 billion. Many of these loans were announced during Premier Li Keqiang’s 2015 trip to Latin America.
- Chinese finance to Latin America in 2015 surpassed World Bank and Inter-American Development Bank lending combined.
- China continues to be an important source of finance for those countries in the region (e.g., Venezuela and Ecuador) with weaker access to global capital markets.
- Countries in the region with higher levels of perceived risk receive finance from China far in excess of their share of the region’s total GDP. Venezuela received $65 billion since 2007, or approximately 52 percent of China’s total finance in the region. Another 34 percent of Chinese finance to Latin America has gone to Argentina, Brazil, and Ecuador.
- Chinese banks continue to focus on LAC’s extractive and infrastructure sectors. From 2005 to the present, Chinese policy banks financed $40.3 billion in infrastructure projects (e.g., highway and facility contruction), as well as many energy projects with infrastructure components. Energy loans, including China’s oil-backed lending to Venezuela through the China-Venezuela Joint Fund, accounted for $70.2 billion of overall Chinese finance in LAC since 2005.
- In addition to China’s many bilateral loans to LAC, Beijing also recently established approximately $35 billion in region-wide funds for infrastructure and other projects. It is unclear whether these funds will be a means for restructuring existing bilateral capital or an entirely new source of finance.
About the China-Latin America Finance Database
The China-Latin America Finance Database is a product of collaboration between the Inter-American Dialogue’s China and Latin America Program and the Global Economic Governance Initiative (GEGI) at Boston University. The leading US center for policy analysis and debate on Western Hemisphere affairs, the Inter-American Dialogue is supported by private foundations, international organizations, governments, corporations and individual donors.
About the Inter-American Dialogue
The Inter-American Dialogue engages its network of global leaders to foster democratic governance, prosperity, and social equity in Latin America and the Caribbean. Together, we shape policy debate, generate ideas, devise solutions, and enhance collaboration within the Western Hemisphere.