Bloomberg
By Dune Lawrence
April 12 (Bloomberg) -- China plans to create a $10 billion investment cooperation fund and offer $15 billion in credit to its Southeast Asian neighbors, extending its influence as the region attempts to weather the global financial crisis.
The investment fund will promote infrastructure development linking China with the 10 members of the Association of Southeast Asian Nations, while the loans will be offered over three to five years, according to a statement on the Foreign Ministry Web site today citing an interview with Foreign Minister Yang Jiechi.
The measures from the world’s third-largest economy, and one of the few forecast to maintain growth this year, may help speed recovery from the global financial crisis and cement China’s leadership in the region. The nation has already signed currency swap agreements with Indonesia, South Korea, Hong Kong and Malaysia this year to help ease foreign-exchange shortages and aid bilateral trade and investment.
“China is going to take the opportunity of this crisis to further establish itself in Asia,” said Huang Jing, a visiting professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “All this will have a huge political and diplomatic impact in the region, in addition to the economic impact.”
Other planned measures include 270 million yuan ($39.5 million) in aid to Cambodia, Laos and Myanmar, and donation of 300,000 tons of rice to an emergency East Asia rice reserve to boost food security, the statement said.
‘Difficult Times’
Premier Wen Jiabao was to announce the proposals at the Asean summit that was canceled in Thailand this weekend.
“Asean leaders hope China could play an important role in pushing forward cooperation in East Asia, and with other countries overcome the difficult times,” Yang said, according to the statement. Wen’s proposals reflect a resolve to “realize the Chinese government’s sincerity, responsibility and confidence in pushing forward Asean cooperation,” he said.
Macquarie Securities Ltd. and China International Capital Corp. estimate that China’s economy will expand as much as 8 percent this year. The World Bank expects 6.5 percent growth.
China’s proposals give Asean countries “another option” besides going to the International Monetary Fund or the Asian Development Bank for funding, Huang said. That may aid China’s standing with Asean, where memories are still fresh of the painful conditions imposed by the IMF in exchange for rescue packages during the 1997-98 Asian financial crisis, according to Huang.
“Southeast Asian countries will welcome the proposal,” he said.
To contact the reporter on this story: Dune Lawrence in Beijing at dlawrence6@bloomberg.net
By Dune Lawrence
April 12 (Bloomberg) -- China plans to create a $10 billion investment cooperation fund and offer $15 billion in credit to its Southeast Asian neighbors, extending its influence as the region attempts to weather the global financial crisis.
The investment fund will promote infrastructure development linking China with the 10 members of the Association of Southeast Asian Nations, while the loans will be offered over three to five years, according to a statement on the Foreign Ministry Web site today citing an interview with Foreign Minister Yang Jiechi.
The measures from the world’s third-largest economy, and one of the few forecast to maintain growth this year, may help speed recovery from the global financial crisis and cement China’s leadership in the region. The nation has already signed currency swap agreements with Indonesia, South Korea, Hong Kong and Malaysia this year to help ease foreign-exchange shortages and aid bilateral trade and investment.
“China is going to take the opportunity of this crisis to further establish itself in Asia,” said Huang Jing, a visiting professor at the National University of Singapore’s Lee Kuan Yew School of Public Policy. “All this will have a huge political and diplomatic impact in the region, in addition to the economic impact.”
Other planned measures include 270 million yuan ($39.5 million) in aid to Cambodia, Laos and Myanmar, and donation of 300,000 tons of rice to an emergency East Asia rice reserve to boost food security, the statement said.
‘Difficult Times’
Premier Wen Jiabao was to announce the proposals at the Asean summit that was canceled in Thailand this weekend.
“Asean leaders hope China could play an important role in pushing forward cooperation in East Asia, and with other countries overcome the difficult times,” Yang said, according to the statement. Wen’s proposals reflect a resolve to “realize the Chinese government’s sincerity, responsibility and confidence in pushing forward Asean cooperation,” he said.
Macquarie Securities Ltd. and China International Capital Corp. estimate that China’s economy will expand as much as 8 percent this year. The World Bank expects 6.5 percent growth.
China’s proposals give Asean countries “another option” besides going to the International Monetary Fund or the Asian Development Bank for funding, Huang said. That may aid China’s standing with Asean, where memories are still fresh of the painful conditions imposed by the IMF in exchange for rescue packages during the 1997-98 Asian financial crisis, according to Huang.
“Southeast Asian countries will welcome the proposal,” he said.
To contact the reporter on this story: Dune Lawrence in Beijing at dlawrence6@bloomberg.net
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