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China, Costa Rica ink $2bn in trade deals

By Wang Zhaokun Source:Global Times Published: 2013-6-5 0:53:01

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Chinese President Xi Jinping(L) shakes hands with Costa Rican President Laura Chinchilla during their talks in San Jose, Costa Rica, June 3, 2013. (Xinhua/Rao Aimin)

Chinese President Xi Jinping(L) shakes hands with Costa Rican President Laura Chinchilla during their talks in San Jose, Costa Rica, June 3, 2013. (Xinhua/Rao Aimin)

China and Costa Rica signed a series of agreements worth nearly $2 billion during Chinese President Xi Jinping's visit to the Central American country, ranging from upgrading energy projects and the public transportation system to the purchase of solar panels.

The two countries announced Monday that China would help Costa Rica replace an old oil refinery in Costa Rica's main shipping port of Limón that refines about 18,000 barrels of crude oil per day.

A $1.5 billion upgrade of the refinery will make it capable of processing 65,000 barrels of crude oil a day and the project will mainly be financed by a $900 million line of credit from the China Development Bank.

If the refinery project is finished, it would not only serve to improve the energy infrastructure of Costa Rica, but also bring benefits to China due to Costa Rica's advantageous location, Xu Shicheng, a researcher with the Institute of Latin American Studies at the Chinese Academy of Social Sciences, told the Global Times.

"China's crude oil trade with some Latin American countries, especially Venezuela and Ecuador, has been increasingly rapid in recent years. Chinese companies could lower their shipping and production costs if they chose to process the crude oil they imported from Latin American nations in Costa Rica," he said.

Although Costa Rica does not produce oil, the upgrade of the refinery would make it possible for it to process crude oil from other countries if initial cooperation between China and Costa Rica proves to be beneficial, Xu added, noting that Costa Rica's location and convenient water transport makes it a good cooperation partner for China.

During Xi's visit, China also agreed to offer financial aid to Costa Rica to upgrade Route 32, a highway connecting San José and the country's coastal areas, and Costa Rica also became eligible to apply for loans from China for a purchase of 50,000 solar panels and to replace some of its obsolete public transportation vehicles.

The two sides also agreed to deepen people to people exchanges as China said it would continue to provide personnel training for Costa Ricans, while the Costa Rican side will simplify visa procedures for Chinese tourists.

Costa Rican Foreign Minister Enrique Castillo said China has more than 100 million tourists traveling worldwide, noting that if Costa Rica could get 500,000 of them, it would boost its tourism by 25 percent, the AP reported.

The cooperation agreements between China and Costa Rica have strong geopolitical significance, Liu Wenlong, a professor of Latin American studies at China's Fudan University told the Global Times, noting that Costa Rica is the only Central American country that has established diplomatic relations with China.

China also has trade and economic links with other Central American countries, but its ties with Costa Rica are obviously more comprehensive and solid, Liu said, stressing that Xi's trip to Costa Rica helped promote China's influence and interest there.

China's growing interest in the region is "very constructive," AFP quoted Dominica Prime Minister Roosevelt Skerrit as saying. "It's a signal to us in the Caribbean that China has been taking us seriously, they have responded to the solidarity we have expressed to them, particularly in the one-China policy."

Costa Rica is to take up the rotating chair of the Community of Latin American and Caribbean States next year. Xu said that will enable the country to play an important role in promoting the overall cooperation between Latin America and China.

"China and Costa Rica are expected to step up their joint efforts to push for the establishment of a China-Latin America forum, a summit similar to the China-Africa Cooperation Forum which would definitely further improve cooperation," Xu said.

"And as the first stage for the creation of such a forum, it's possible that a China-Latin America agriculture ministers' forum could be initiated this year," he added.

Costa Rica is the second leg of Xi's three-nation Latin American tour and he is set to arrive in Mexico Wednesday.

Before leaving, Xi and his wife Peng Liyuan received the Key to San José on Monday and San José Mayor Johnny Araya described the key as the highest honor awarded to foreign guests by his city.

Agencies contributed to this story

Posted in: Diplomacy