MercoPress. South Atlantic News Agency

China joins IDB and contributes with 350 million USD

China will join the Inter-American Development Bank as a donor member, building on its growing links with Latin America and the Caribbean. China will become the 48th member country in the Washington, DC-based IDB, the single largest source of long-term lending for the region.

"We are thrilled to bring a large and growing economy like China into a community of nations that are working together to resolve the complex development challenges facing Latin America and the Caribbean," said IDB President Luis Alberto Moreno. "It is a historic decision that takes China's thriving commercial relationship with our region into the development sphere." China has agreed to contribute 350 million USD to the IDB Group to bolster key programs at a time when the world economy is under duress. The funds would be distributed as follows: 125 million USD will go to the IDB Fund for Special Operations, which provides soft loans to Bolivia, Guyana, Haiti, Honduras, and Nicaragua; 75 million USD will go to multiple IDB grant funds to strengthen the institutional capacity of the state, including municipal governments and private sector institutions; 75 million USD is for an equity fund to be administered by the Inter-American Investment Corporation (IIC), which lends to small and mid-sized private businesses; 75 million USD is to be administered the Multilateral Investment Fund – the IDB arm that focuses on microenterprises. "China's membership in IDB will provide both sides with a new platform and opportunity for increased two-way trade and investment and greater technological cooperation," said Zhou Wenzhong, China's ambassador to the United States. "This is a win-win decision that will serve everyone's interest." "China will, after officially joining IDB, cooperate closely with Bank, support the IDB in reducing poverty and promoting development, and share our experience with the countries of Latin America and the Caribbean for the purpose of mutual benefit and common development," he added. Over the past decade China has become an increasingly important commercial partner for many countries in this region. Trade between Latin America and the Caribbean and China jumped 13-fold since 1995, from 8.4 billion to 110 billion USD in 2007. China is now this region's second biggest trading partner after the United States. In 1995 it was the 12th biggest, trailing Japan and Germany, among others. China's entrance was approved by other member countries in a month-long voting process ended on October 15. The 26 Latin American and Caribbean borrowing nations own 50.01% of the IDB and the US just over 30%. China will purchase 184 shares, or 0.004% of the IDB ordinary capital, which became available after the break up of Yugoslavia. China will be the IDB third Eastern Asian member after Japan and South Korea, which joined in 1976 and 2005, respectively.