Venezuelan President Nicolas Maduro visited China over the weekend and Monday. It was his first official visit to the country as president, and a number of important agreements were signed, including for new funds, buses, cultural exchanges, and oil refinery investment.
The Venezuelan and Chinese governments signed twelve agreements, most of them affirming the continuation of various ongoing Chinese-Venezuelan projects. They include US $5 billion in new financing for the joint Chinese-Venezuelan fund, collaboration in the development of heavy crude oil refining in the Orinoco oil belt, and mining studies, particularly for gold in Bolivar state
Oil minister Rafael Ramirez said the joint venture in the Orinico oil belt, specifically the Junin 10 area, involved new investments worth US$ 14 billion.
Cooperation agreements were also signed in relation to security, emergency management, and for knowledge exchange around agriculture and technology. The two governments agreed on the program of cultural cooperation for 2014-2016, and to build another 4,500 homes in the states of Nueva Esparta and Anzoategui.
The two countries agreed on the construction of a maritime terminal for the state owned petro-chemical company, Pequiven with help from the Export-Import Bank (Eximbank) of China. The agreement is worth US$ 391 million. The port will be for urea and ammoniac export.
Venezuela will continue its cooperation Chinese conglomerate Yutong for public buses. Maduro announced that it would import 2,000 Yutong buses in order to “modernise public transport” in Venezuela and there are also plans to establish a joint venture to produce and export the buses to other Latin American countries. Last year Venezuela bought 1,216 such buses for urban transport.
Maduro also met with the president of Chery, where he said a “powerful alliance” was agreed on, and, “We’re going to create and manufacture a car in Venezuela”. He added that Venezuelan youth could be trained in car production through Venezuela’s Work and Knowledge Mission.
In response to the president’s visit to China, private media in Venezuela focused on the “debt” that the Venezuelan government supposedly has with it, with Informe21arguing in its headline that “every Venezuelan owes $943.13 each”.
Likewise, opposition legislator Julio Borges argued that the “Chinese loan implies that each Venezuelan family owes Bs 300 million to [China], what we have is more debt that all Venezuelans are going to pay”. Borges likely meant thousand instead of million, must have been using the illegal exchange rate in his calculations, and must have assumed that each family has ten members.
According to foreign minister Elias Jaua, Chinese financing is worth US$ 40 billion, of which “over half has been paid off”. He emphasised that the funds were for the “economic-productive development of Venezuela”.
At the recent visit, Venezuela committed to sending 640,000 barrels of petroleum per day to China, of which 264,000 are in exchange for the financing. The number is a significant increase from the average of 518,000 barrels per day Venezuela sent to China last year, and 49,000 barrels sent per day in 2005.
Bilateral relations between China and Venezuela were significantly strengthened under the government of former President Hugo Chavez. Chavez initiated the first high level joint commission between the two countries in 2001, and since then they have signed 458 cooperation agreements and are carrying out 268 joint projects. Some of the main projects are in the areas of energy, mining, and agriculture, while China also played a key role the launch of Venezuela’s first satellite, Simon Bolivar, launched from the Asian country.
“The relationship between China and Venezuela is as strong as the China wall…this visit is important in reaffirming the links of friendship and political community that China and Venezuela have been developing,” Jaua said yesterday from Beijing. He argued it was the “most important meeting” Maduro has had as president so far.