The Trump administration is pushing back against China’s efforts to boost its economic ties with Latin America, as the rivalry intensifies between the world’s two largest economies.
The US Treasury Department took steps to check the Asian nation’s growing influence in the region last month, when it raised questions about Beijing’s overtures to Latin America’s multilateral lender. The US is the largest shareholder of the Inter-American Development Bank at 30%, whereas China’s stake in the lender is a minuscule 0.004%.
In a December 19 letter obtained by Bloomberg, US Under Secretary for International Affairs David Malpass asked IDB President Luis Alberto Moreno why he had selected China to host the bank’s 60th anniversary meeting next year. “I have serious reservations about the bank’s process that led to that initial decision, and I do not think the 2019 meeting could be nearly as successful in Beijing as it would be if held in the region,” Malpass wrote.
The IDB is preparing a written reply to Malpass’s letter, said Paul Constance, a press officer with the bank. The IDB’s shareholding countries, including the US, all agreed last year to hold the 2019 meeting in China, he said.
Malpass’s letter comes amid a push by China to increase its influence in Latin America, where during previous US presidential administrations it became the top trade partner for commodity exporters like Brazil and a lender for cash-strapped nations such as Venezuela. China’s ruling Communist Party, in its National Congress late last year, agreed to further strengthen commercial and strategic ties with the region as part of its drive to become a global economic leader.
Malpass in his letter to Moreno cautioned that China’s economic policies in Latin America could prove harmful to the very countries the IDB tries to help. He cited the Asian nation’s investments in telecommunications in the region, where for example Chinese funds in 2016 were behind a winning bid to build a new wireless network in Mexico.
“Huge export credits are flowing in non-economic ways that distort markets and leave borrowers burdened with ineffective projects and heavy debt burdens,” Malpass wrote. “China’s aggressive telecommunications investments in the region also raise security concerns about placing the region’s communications backbone on Chinese networks.”
US economic relations with China have grown increasingly tense since Donald Trump took office. The White House in December lumped China with Russia as powers seeking to undermine US security and prosperity, and the president has repeatedly threatened to impose tariffs on Chinese goods.
Malpass in a speech late last year accused China of backsliding on market-oriented reforms, calling on other major economies to form a united front with the US to put pressure on the Asian power. He has also critiqued Beijing’s relations with development lenders, questioning why the World Bank lends money to China when the country already has access to global financial markets.
In the letter to the IDB, Malpass repeated his concerns that “China’s economic liberalisation seems to have slowed or reversed, with the role of the state increasing.”
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Qatar banking sector total assets stand at QR1.78tn in September: QNBFS
Transport, insurance stocks keep QSE afloat on positive trajectory
Ezdan Holding Group posts QR233.42mn net profit in third quarter
Finance Minister receives Credit Suisse chairman
Gulf economies to pick up speed next year, with fall in oil prices biggest risk
Huawei Arab Innovation Day to drive digital transformation
Rising LNG imports provide scant relief for Europe power crisis
China signs huge LNG deals with US supplier Venture Global
Port gridlock stretches supply lines thin in blow for global economies