The investments and loans that China is ready to inject into the economy of its neighbor Philippines total as much as $1.4 billion.
The move is aimed to further Chinese expansion on the Asian market with the possibilities to soothe the world’s fastest-growing economy.
On Wednesday, China’s President Hu Jintao signed an agreement with his Philippines counterpart Gloria Arroyo in Manila. Under the terms, China will have access to Philippinian natural resources.
Chinese economy is 19 times bigger than that of the Philippines with 15 times as many people.
Shanghai Baosteel Co. and China Development Bank will invest $950 million in Philnico Mining & Industrial Co. as part of the agreement. Export & Import Bank of China will lend $500 million to build a rail line from Manila to the north, according to one Philippines official.
``China has huge international reserves,’’ Philippine Planning Secretary Romulo Neri said. ``It’s fortunate they’re using it to help the economies of its neighbors.’’