China Construction Bank expands to Latin America

China Construction Bank (CCB) has opened its first branch in Latin America to begin offering corporate banking services in Chile. CCB's Santiago branch will also serve as a clearing bank for transactions in RMB, working to facilitate business between the countries and thus encouraging a flow of investment between Latin America and China.

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The opening of the first Latin American branch of the China Construction Bank (CCB) in Chile on Monday signals greater investment and development for the region, said former Chilean President Eduardo Frei Ruiz-Tagle.

Frei, Chile's president from 1994-2000, told Xinhua about the impact of the new CCB branch, which will offer corporate banking services and also serve as a clearing bank for transactions in China's currency, the renminbi (RMB).

The opening of the CCB's Santiago branch "is going to represent a great flow of investment and development, because it will facilitate transactions (with China) not just in this country, but throughout Latin America," said Frei, who currently serves as a senator and as his country's ambassador to the Asia-Pacific.

"The opening of the China Construction Bank in Chile is a pivotal event in ties between the two countries, because it is going to operate with the renminbi for all of Latin America," said Frei.

The branch will "turn Chile into a platform for financial services in Latin America for both Chinese and Chilean firms, and the rest of the region," he said.

Several Chilean exporters have in the past complained of "losing a lot of money in trading, because they have to exchange foreign currencies and, in the end, the total loss can be huge," said Frei.

"The fact that, in a very competitive market, you can create a system to transact directly in renminbi is a big help, especially for small- and medium-sized companies, whose businesses will get a major boost," said the former president.

"Being able to do business in renminbi, directly from China to Chile and from Chile to China, is a very important contribution," he said.

In addition, the CCB's focus is on infrastructure, a sector that Chile needs to develop, he said.

"We want to build the Bi-Oceanic Route, border crossings, tunnels, large ports to facilitate trade with China and it is very important to finance these projects," said Frei.

To promote these projects, he said, Chile's government has proposed the creation of a Fund for Infrastructure, currently being debated in Congress, and strengthened the Public Works Ministry's Constructions Unit.

The government's 10-year, 1.25 billion-U.S.-dollar infrastructure development plan offers both national and Chinese firms opportunities for investment, said Frei, noting Chilean law allows foreign concessions of public works.

Frei said he has also "spoken with executives of the Chinese bank" about approaching Chinese companies to invest in Chile's infrastructure projects.

China is Chile's leading trade partner, Frei said. "Today almost 50 percent of our foreign trade and services are done with Asia."

That's why the CCB's presence in Chile "represents a tremendous opportunity," said Frei.

He believes courting the country's small- and medium-sized companies will be good for the bank's business, while at the same time helping to "consolidate the relationship between the two countries."

In the meantime, Chile is preparing for the Week of Chile in China in August, which will see the country tout investment opportunities in energy, food production and tourism in Hong Kong, Guangzhou and Beijing.

"That is going to help the bank begin to explore several investment opportunities," he said. Endi