China will establish a US$1 billion fund in conjunction with the Inter-American Development Bank to make investments into Latin America, the Financial Times reported. The fund is a partnership between China’s Export-Import Bank and the IDB, with each partner initially contributing US$150 million. The fund is expected to make investments in the infrastructure and natural resources sectors, with a particular focus on mid-cap companies. “We are looking to focus on areas where Latin America has enormous deficiencies, like infrastructure,” said Luis Alberto Morena, IDB’s president. China is the largest lender to Latin America and a key consumer of the region’s natural resources. Mauricio Mesquita Moreira, the IDB’s principal trade and integration economist, said, “It is very idealistic to think that in 10-20 years’ time, there will be a radical change in the composition of Latin American exports to China… The drive for natural resource is only going to get more intense.”
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