This report does not include the recent loans negotiated by Venezuelan government these past few weeks ( their loans to China stood at $38.5 Billion DOLLARS through 2011) and from the scant reports of the recent ones, they seem to be even more stringent in the terms than before.
What I found more interesting as in the case of Venezuela, several countries could both help or advance the socio-economic progress of other countries through trade, subsidies and the provision of resources, or be a brake and lock to those countries such as competitors to progress by preventing the use of capital, technology, trade routes, labor, land or other resources. In Trotsky's theory of imperialism, domination of one country by another does not mean the country dominated preventing the development as a whole, but develops mainly depending on the requirements of the dominant country. For example, an export industry will develop around oil in the country dominated, but the rest of the economy is not developed, so that the country's economy developed more unevenly than it was before, rather than in a balanced way of development. For those who want to understand the export of capital as imperialism, please read your Lenin and Rosa Luxemburg on the subject. Cort Full report also here: http://ase.tufts.edu/gdae/Pubs/rp/GallagherChineseFinanceLatinAmerica.pdf The New Banks in Town: Chinese Finance in Latin America *By Kevin P. Gallagher, Amos Irwin, and Katherine Koleski February 2012 Download the full report<http://ase.tufts.edu/gdae/Pubs/rp/GallagherChineseFinanceLatinAmerica.pdf> * Also available in* Spanish<http://www.ase.tufts.edu/gdae/policy_research/NewBanksSpanish.html> * and *Portuguese*<http://www.ase.tufts.edu/gdae/policy_research/NewBanksPortuguese.html> *See Press Coverage and New Media<http://www.ase.tufts.edu/gdae/Pubs/rp/NewBanksInTownPress.html> See the China-Latin America Finance Database<http://thedialogue.org/map_list> * *[image: New Banks In Town by Gallagher Irwin and Koleski]*<http://www.ase.tufts.edu/gdae/policy_research/NewBanks.html>In this report we estimate that since 2005 China has provided loan commitments upwards of $75 billion to Latin American countries. These figures have now been updated through 2012, showing $87 billion in loans, as part of the China-Latin America Finance Database <http://thedialogue.org/map_list>, a collaboration between GDAE, Boston University's Global Economic Governance Initiative, and the Inter-American Dialogue. China’s loan commitments of $37 billion in 2010 was more than the World Bank, Inter-American Development Bank, and the United States Export-Import Bank combined for that year. After providing estimates of Chinese finance we also examine the common claims that Chinese loans to Latin America have more favorable terms, impose no policy conditions, and have less stringent environmental guidelines than the loans of International Financial Institutions (IFIs) and Western governments. We find that: - The Chinese Development Bank (CDB) loans carry more stringent terms than World Bank loans. - China’s Export-Import Bank, by contrast, generally offers lower interest rates than the U.S. Ex-Im Bank—though this difference stems from the fact that the World Bank offers concessional interest rates as a form of aid, while China offers concessional rates not through CDB but rather China Ex-Im. - Chinese banks provide financing to a significantly different set of countries than the IFIs and Western banks—namely Argentina, Ecuador, and Venezuela that are not able to borrow as easily in global capital markets. - Chinese and IFI/Western banks do not overlap significantly in Latin America because they give different-size loans to different sectors in different countries. Chinese banks have largely focused on loans to natural resource based and infrastructure sectors. - Chinese banks impose no policy conditions on borrower governments, but do require equipment purchases and sometimes oil sale agreements. - The financing terms in oil sale agreements seem to be better for the South Americans than most people believe. - Chinese finance does operate under a set of environmental guidelines, but those guidelines are not on par with those of their Western counterparts. It is our hope that this report will provide a more empirical-based foundation for research on Chinese finance in LAC. The investigation we performed here lends credence to some of the claims about China in Latin America, and less so to others. On the positive side, it is clear that China is a new and growing source of finance for LAC countries, especially for the set of nations that are having trouble gaining access to global capital markets. Moreover, from an LAC perspective those loans do not come with the policy conditionalities that are tied to IFI and Western loans. Finally, LAC nations can get more financing for the infrastructure and industrial projects they seek to enhance long-run development—rather than the latest Western development fads. All that said, and contrary to much of the commentary on the subject, by and large LAC nations have to pay a higher premium for loans from China. That higher premium is in the form of interest rates, not loans-for-oil. It is commonly thought that LAC simply sends barrels of oil to China in return for financing and thus may end up losing out given the rising price of oil. Our analysis shows that such thinking is misreading the evidence, the majority of Chinese loans for oil in Latin America are linked to market prices, not quantities of oil. Another cost of Chinese finance is that it can often be tied to working with Chinese contractors and businesses. This reduces the amount of “spillover” effects in terms of local contracting in LAC related to the loans. And finally, though the IFI/Western banks’ environmental record is far from perfect, the Chinese banks are not on par with the environmental guidelines of Western banks. This is of grave concern given that the composition and volume of Chinese loans is potentially more environmentally degrading than Western banks’ loan portfolios to LAC. Download the full report: *The New Banks in Town: Chinese Finance in Latin America*<http://ase.tufts.edu/gdae/Pubs/rp/GallagherChineseFinanceLatinAmerica.pdf> .
