China expects to invest in new ecuadorian projects

Credits, oil exploitation and infrastructure service sales, have marked the economic and cooperative relationship between Ecuador and China since 2007.

Various analysts point out these actions will continue in the future if new projects are concreted. In the portfolio of projects that the Vice-President Jorge Glas sold to Beijing,  a steel plant, a shipyard or a pharmaceutical are included, analysts say.

Alberto Acosta Burneo, editor of the Economic Analysis Weekly magazine, explains that Chinese investment has been made in projects with low risk and high profit as oil and mining, where companies that had running projects or secure reserves.

In this context, according to the Central Bank in 2013, the trade balance was negative at USD 2.701 million for Ecuador, while the external debt owed to China is at USD 4.633 million. In addition, oil sales to that country exceeded the 80% of the total exportable.

Meanwhile, Jaime Carrera from the Observatory of Fiscal Policy clarifies that the country assumes the costs when it hires a credit in the investment, but the risk and the costs are taken by the investor, in this case the State does not involve resources.