Zhou swallowed his butterflies and made his first address at the meeting, duly talking about the “huge potential” in China-Latin American trade and cooperation and reeled off some eye-catching statistics: 30% annual growth in bilateral trade since 2001, from US$15 billion to US$140 billion.

Earlier in the week, Zhou made waves by voicing his concerns about the US dollar’s supremacy as the global currency, proposing that the International Monetary Fund consider adopting a basket of currencies to replace it as “super-sovereign reserve currency.” Barack Obama didn’t warm to the idea, but US Secretary Treasury Timothy Geither seemed to. Presumably Zhou and Geither had a bit of time to discuss it further in the de-Pablo Escobar-ed setting.

As if to drive his point home, Zhou announced a US$10 billion currency swap (that is, US$10 billion-worth of yuan and pesos) between his country and Argentina at the IDB meeting. It is the first currency swap between China and a Latin American country. Argentina has an election coming up on June 28, and having the extra funds will give them a measure of security in controlling the peso’s value.

Argentina’s central bank president, Martin Redrado, was quick to point out that the deal is a contingency plan; the country doesn’t need it at the moment. And, another asterisk behind the deal:

“The fact that China represents such a small share of Argentina’s total trade (less than 12 percent) suggests limited impact on FX, but is an important political gimmick at this time (convertibility will remain an issue),” RBS wrote in a research note issued on Tuesday.

Gimmick or no, Zhou proved that even in an international setting like the IDB summit, China will look for ways to extend its reach (and currency priorities).

Image: China Daily