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Published: Sunday March 29, 2009 MYT 9:14:00 AM
Updated: Sunday March 29, 2009 MYT 9:22:55 AM

China: Trade with LatAm up 40 percent last year


MEDELLIN, Colombia (AP): Trade between China and Latin America reached a record of more than $140 billion last year, the governor of China's central bank said Saturday, and pledged to help ease the economic crisis's impact on the region.

Zhou Xiaochuan also said at the annual meeting of the InterAmerican Development Bank that he did not know whether the crisis has hit bottom China - because that depends on the global situation.

China joined the IADB last year, investing $350 million in the $100 billion institution. The United States is the IADB's largest shareholder, with a 30 percent stake.

"We see a huge potential in trade and cooperation between China and Latin American countries in the interest of both sides," Zuo told a crowd of about 1,000 at the meeting, which formally gets under way on Sunday.

Chinese direct investment in Latin America totaled $24 billion last year, Zhou said, while its trade with the region was up nearly 40 percent from $101 billion in 2007. He said a special team of Chinese consultants was studying ways to improve cooperation with the 48-member IADB. He did not, however, announce additional investment in the region's principal multilateral lender, whose mission is to ease poverty and inequality in a region where the economic crisis is just now starting to bite.

China currently has $2.2 trillion in foreign reserves, giving it potentially enormous global clout.

The IADB's leadership is seeking to increase its capital at this meeting in hopes of disbursing a record $18 billion in loans this year.

Bank president Luis Alberto Moreno, a Colombian, says the new infusion is crucial as the IADB replaces other international institutions as the lender of choice for many nations in the region.

However, there is no indication the United States will support the capitalization, which would be the bank's first since 1994.

Its representative, Treasury Secretary Timothy Geithner, is due to attend Sunday's inaugural session of the bank's governors and Zhou said the two planned to meet.

Brazil and Argentina, the IADB's second-largest shareholders with 10.7 percent each, are among members who back the capitalization idea.

Zhou is one of the most closely watched officials in global finance and his country is demanding a larger say in how global financial institutions are regulated and bailed out. China has even advocated the creation of another global currency as an alternative to the U.S. dollar.

Zhou indicated he would press at the Group of 20 summit in Britain on April 2 for reforms of international financial institutions - traditionally dominated by the United States - that would "increase the voice of emerging market and developing countries."

Asked by reporters whether China's economy had hit bottom, Zhou said he did not know. However, he did say "there are signs the Chinese economy is stabilizing."

"According to Chinese data it seems that November and December were the worst given many indicators," Zhou added.

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