Loans by China’s state-owned banks to Latin American countries grew 71 percent to US$22 billion in 2014 from the previous year.
The figure is the second largest on record for Chinese lending in the region and exceeds the combined amount of loans by the World Bank and the Inter-American Development Bank, BBC News reported, citing estimates published by the China-Latin America Finance Database.
Brazil was the biggest recipient with US$8.6 billion, followed by Argentina with US$7 billion, Venezuela with US$5.7 billion and Ecuador with US$821 million, according to a report by US think tank Inter-American Dialogue and Boston University’s Global Economic Government Initiative.
Kevin Gallagher and Margaret Myers, authors of the report, say Chinese finance is particularly popular with Latin American governments because it “comes with few strings attached”.
“China may tacitly require that Chinese companies have a hand in some projects, but has avoided meddling in domestic policy,” the report said.
However, it warned that China’s mounting financial commitments to the region also carry considerable risk.
“China is heavily invested in countries with poor credit ratings and a history of default,” the report said, adding that the country’s investment this year could beat the 2010 high of US$37 billion.
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