Chinese President Xi Jinping hailed his country’s growing ties with Venezuela on Thursday, pledging $20 billion in Chinese investment in the South American country’s beleaguered economy, which is struggling with record-high inflation as oil prices drop.
Xi also held talks with officials from other left-leaning countries in the Western Hemisphere, a day after meeting Venezuelan President Nicolas Maduro in Beijing.
The Chinese leader emphasized China's commitment to an independent foreign policy and to maintaining an equal partnership with the region, comments likely to appeal to many other countries there who resent what some see as unfair dominance by the United States.
Xi pledged to use his country's economic clout to support billions of dollars in regional projects in South America and almost double two-way trade to $500 billion over the next 10 years.
He also emphasized the potential for future growth in ties between China and the grouping of more than 30 nations known as the Community of Latin American and Caribbean States, which together account for one-eighth of the global economy. Late Venezuelan President Hugo Chavez had pushed the bloc as an alternative to U.S.-led regional organizations.
"I am sure that this meeting will yield rich results, send to the world a strong message of our commitment to deepening cooperation for common development," Xi said.
Trade between China and the region grew from $10 billion in 2000 to $257 billion in 2013, driven largely by Chinese demand for commodities such as crude oil and soybeans. While slowing growth in China will soften demand for such products, Xi said Latin America and the Caribbean would benefit from a forecasted $10 trillion in Chinese imports over the next five years.
Along with the targeted increase in two-way trade, Xi said he wants to raise direct investment in the region to $250 billion over the next five years. Last July, China extended a $20 billion loan to the region for infrastructure development, another $10 billion in preferential loans, a $5 billion fund for cooperation between the sides and $50 million for agricultural development.
The new partnerships raise pressure on the U.S., which has traditionally enjoyed close economic, cultural and political ties with Latin American countries. All of the region's nations are scheduled to meet for the Summit of the Americas in April in Panama City, to be hosted by the Washington-headquartered Organization of American States.
But some analysts have not raised much alarm over the deal’s potential to raise geopolitical tensions in the region. Matt Ferchen, resident scholar at the Carnegie-Tsinghua Center for Global Policy, said China's push would not worry Washington much, especially with improving U.S.-Cuba ties set to boost U.S. influence.
"The reality of economic-social ties, people-to-people ties, between any country in the region and the United States are so much deeper than anything that exists with China," Ferchen said.
"The Cuba deal changes everything in terms of how the United States can set a positive agenda in the region," he said. In December, President Barack Obama announced a long-awaited decision to reinitiate diplomatic relations with Cuba after decades of animosity between the two nations that has been devastating for the island's economy.
China has particularly strong ties with several Latin American nations that have clashed diplomatically with the U.S., especially Venezuela. China is Venezuela's largest creditor and over the past five years has loaned it more than $40 billion, some of which has been paid back in the form of oil deliveries.
Maduro said after his meeting Wednesday with Xi that there was no word on any new loan package. He said the $20 billion in investments would go to "projects with an economic, energy and social character," but he didn't offer further details as to how the money would be used.
Chinese Foreign Ministry spokesman Hong Lei said the investment would go into energy, mining, agriculture and industry — including oil exploration in Venezuela, which has the world's biggest proven oil reserves.
Venezuela is struggling with one of the world's highest inflation rates, a recession and a cash crunch worsened by a steep fall in the price of oil. It has so far unsuccessfully urged OPEC nations to work together to drive up oil prices, which have fallen by half in six months. Venezuela depends on oil for 95 percent of its export income.
The presidents of Ecuador and Costa Rica were also in Beijing for high-level talks on Chinese trade, investment and financial support in Latin America. On Wednesday, Ecuador said it secured $7.5 billion in credit from China.
Al Jazeera and wire services