China–Venezuela relations

China–Venezuela relations

China
Venezuela

China–Venezuela relations became increasingly significant during the Presidency of Hugo Chávez in Venezuela and the tenure of Hu Jintao as the leader of the People's Republic of China. Sino-Venezuelan trade was less than $500m per year before 1999, and reached $7.5bn in 2009, making China Venezuela's second-largest trade partner,[1] and Venezuela is China's biggest investment destination in Latin America. Various bilateral deals have seen China invest billions in Venezuela, and Venezuela increase exports of oil and other resources to China.

Trade and investments

In September 2008, Venezuela signed a series of energy co-operation deals with China with the President of Venezuela stating that oil exports could rise threefold by 2012, to 1 million barrels per day (160,000 m3/d).[2] However by 2012, underinvestment in the oil sector meant that only 640,000 barrels of oil a day were exported to China and 200,000 of those simply went to service Venezuela's huge debts to China.[3]

Further trade agreements worth $12bn were signed in February 2009, and Venezuela's first cell phone factory, built with Chinese support, was inaugurated.[4] Oil exports to China are set to increase substantially.[5] In February 2009 Venezuela and China agreed to double their joint investment fund to $12 billion and signed agreements to boost co-operation which include increasing oil exports from Venezuela, China's fourth biggest oil provider. An oil refinery is planned be built in China to handle Venezuelan heavy crude from the Orinoco basin. "It is part of a strategic alliance" Venezuelan President Hugo Chavez said, after meeting the visiting Chinese Vice President Xi Jinping who stated that "our co-operation is highly beneficial".[6]

In 2009, China entered into a partnership with Venezuela to launch a railway company in Venezuela which will be 40% controlled by the China Railways Engineering Corporation (CREC) and the remainder by Venezuela. Venezuela outlined the role of the venture as one which would link Venezuela's oil producing regions and agricultural farming areas.[7] In September 2009 Venezuela announced a new $16bn deal with China to drill for oil in a joint venture with PDVSA to produce 450,000 barrels per day (72,000 m3/d) of extra heavy crude. Hugo Chavez stated that "In addition, there will be a flood of technology into the country, with China going to build drilling platforms, oil rigs, railroads, houses.".[8] In September 2013, China decided to lend $50bn over 5 years to finance 201 housing projects in Venezuela.[9]

Other

In 2008 the governments of Venezuela and the People's Republic of China launched their first joint space satellite, named Venesat-1. Venezuela's leader Hugo Chavez said the satellite would be a tool of integration for Latin America and the Caribbean regions by saying "This satellite is not for us but for the people of Latin America and the Caribbean. It is a further step towards independence," he said, adding that the project would break the mold of "technological illiteracy."[10]

Also established are military-technological ties with the acquisition of two squadrons (24) of Chinese-built Karakorum-8 trainer jets and ground radars, signalling a greater Chinese involvement in Latin America.[11][12]

Venezuela has also embarked on a programme of cultural and scientific exchange with China.[13]

Bibliography

Sources