Venezuela’s Maduro Meets China’s Xi on Trip to Deepen Ties

Venezuela’s Maduro Meets China’s Xi on Trip to Deepen Ties
Venezuela’s Maduro Meets China’s Xi on Trip to Deepen Ties

Venezuelan President Nicolas Maduro met on Friday with Chinese President Xi Jinping during a trip to deepen ties and seek increased financial support from one of his ailing country’s biggest creditors.

The two leaders reaffirmed their ties, with Maduro saying their relationship was “a model of international cooperation,” Chinese state broadcaster CCTV reported. Maduro later met with Premier Li Keqiang, who said China was willing to provide “whatever assistance is within our means,” CCTV said.

CCTV said Maduro and Xi oversaw the signing of several agreements, but gave no details and foreign media were not given access to the meetings. Bloomberg News earlier cited Venezuela’s finance minister as saying China had agreed to extend Venezuela a $5 billion credit line, ABC News reported.

Maduro said before leaving Venezuela on Wednesday that his agenda includes advancing commercial, energy and financial deals with China, whose economic backing has been crucial to his government.

China has provided Venezuela with loans, cash and investment in the last decade totaling more than $65 billion. Venezuela’s inflation is expected to hit 1 million percent this year.

Maduro has just launched a raft of sweeping economic reforms at home aimed at turning around the plummeting economy. The revamp includes a new currency, boosting the minimum wage more than 3,000% and raising taxes.

  Oil Presence

During Maduro’s visit, Venezuela gave China another stake in the OPEC nation’s oil industry and signed several other deals in the energy sector, but Beijing made no mention of new funds for Caracas.

Maduro’s leftist government sold a 9.9% stake in the low-cost Sinovensa joint venture, where China National Petroleum Corporation has a 40% share, to China, it said in a statement.

The statement also said China and Venezuela had signed a “memorandum for cooperation in Ayacucho bloc 6,” located in Venezuela’s vast oil-rich Orinoco Belt, without elaborating.

China will drill 300 wells in Ayacucho and extend $184 million in financing for the joint oil venture Petrozumano, the statement added. A source at PDVSA, who asked to remain anonymous because he is not allowed to speak to media, said oil services and procurement at Sinovensa would be handled by Chinese companies.

It was unclear what China, which has ploughed more than $50 billion into Venezuela through oil-for-loan agreements, was giving in return.

PDVSA and Venezuela’s Information Ministry did not respond to a request for information about the deal. Maduro said on Thursday he was going to China on a four-day trip with “great expectations” and promised to return with “big achievements”.

Premier Li Keqiang told Maduro that Beijing was willing to provide the crisis-hit country with what help it can. But there was no reference in Chinese state media or in Chinese government statements to new funds for Venezuela, which is struggling with a fifth year of recession and an economy wracked by hyperinflation.

Over a decade, oil-for-loan agreements helped China secure energy supplies for its fast-growing economy while bolstering an anti-US ally in Latin America.

The flow of cash halted nearly three years ago, however, when Venezuela asked for a change of payment terms amid falling oil prices and declining crude output that pushed its state-led economy into a hyperinflationary collapse.

Venezuela’s finance ministry in July said it would receive $250 million from the China Development Bank to boost oil production but offered no details. Venezuela previously accepted a $5 billion loan from China for its struggling oil sector but has yet to receive the entire amount.

In a separate meeting with the Chinese president, Maduro said Venezuela was willing to “explore effective financing methods” with China and strengthen cooperation in the energy sector, Chinese state media said, citing Maduro without elaborating.

Xi told Maduro China would, as before, support the Venezuelan government’s efforts to seek stability and development.

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