CHENGDU, China – The Export-Import Bank of China (“China Eximbank”) and the Inter-American Development Bank (“IDB”) signed a Letter of Intent to boost trade between China and Latin America and the Caribbean (“LAC”) at the China-LAC Business Summit, held in Chengdu, China, on October 21st and 22nd, 2010.
The Forum was organized by the Integration and Trade Sector (INT) and the Office of Outreach and Partnerships (ORP) of the Inter-American Development Bank (IDB) and the China Council for the Promotion of International Trade (CCPIT), in close collaboration with the People’s Bank of China and the Sichuan Provincial Government.
The Letter of Intent details the partnership and the structure of the agreement in which both the IDB and China Eximbank will co-finance trade loans under the IDB’s Trade Finance Facilitation Program (“TFFP”). The partnership will finance up to $200 million worth of trade activity during any given period for an initial two-year period. China Eximbank’s co-financing under the agreement will be exclusively for trade between LAC and China.
“This partnership furthers the important link between China and Latin America and the Caribbean by increasing the amount of available financing for trade activity between the two regions. Since trade is a fundamental economic driver of both LAC and China’s economies, we believe the partnership between China Eximbank and IDB to be a groundbreaking initiative to support increased trade activity,” said IDB President Luis Alberto Moreno.
The Export-Import Bank of China (China Eximbank)
China Eximbank is a government policy bank enjoying the same international credit ratings as China's sovereign ratings. As an important force in promoting foreign trade and economy and a significant component of the financial system, China Eximbank has been acting as a key channel of policy financing for both Chinese import-and- export of mechanic and electronic products, complete sets of equipment, and high- and new-tech products and undertaking of offshore construction contracts and overseas investment projects by Chinese companies. Meanwhile, the Bank is a major on-lending bank of foreign government loans and the only operating bank for Chinese Government Concessional Loan.
The IDB launched the TFFP in 2005 to provide credit guarantees to boost trade financing for Latin American and Caribbean companies. In December 2008, the IDB expanded the TFFP to a maximum of $1 billion, up from its original $400 million limit in response to the global economic crisis. The program was also modified to allow the issuance of loans and to support transactions denominated in currencies other than U.S. dollars. Since its inception the program has built a network of 67 issuing banks in LAC, with more than $1.16 billion in approved credit lines, and 231 confirming banks in LAC, North America, Europe, Asia and Africa. To date, the IDB has provided loans and issued guarantees for over $750 million in support of approximately 1000 individual trade transactions totaling more than $1 billion.
Inter-American Development Bank
The Inter-American Development Bank (IDB) offers its financial products and resources to help Latin America and the Caribbean countries reduce poverty and inequality in a sustainable way. The IDB seeks to create cooperation opportunities with other countries. It is the first and largest regional development bank and the main source of multilateral finance for the region.