World Economy

China, Venezuela to Step Up Cooperation

China, Venezuela to Step Up CooperationChina, Venezuela to Step Up Cooperation

China and Venezuela will step up cooperation this year, Presidents Xi Jinping and Nicolas Maduro said in Beijing Wednesday as falling oil prices threaten the Latin American nation’s economy.

Maduro was widely expected to ask for a new cash injection to shore up oil-rich Venezuela’s finances during his visit as elections loom and a faltering economy could hurt his left-wing party’s chances, AFP reported.

“We have very good news to share about the cooperation that will increase this year,” Maduro said at a meeting with his host. “It will be strengthened on the basis of the successful formula that we’ve built,” he said, without giving details.

There were signs that Xi was willing to throw a lifeline to what he called an “old and good friend of the Chinese people”.

“Going forward we will deepen cooperation in all spheres,” he said.

Foreign ministry spokesman Hong Lei told reporters at a regular briefing: “During President Maduro’s visit we will work with them to promote our strategic cooperation, including with regards to finance. “Due to falling oil prices Venezuela is facing some difficulties in its domestic economy.”

Venezuela’s economy has sunk into recession in recent weeks due to the plummeting price of oil, which the country relies on for 96 percent of its foreign currency.

Maduro is in the Chinese capital to attend a two-day forum aimed at bolstering China’s relations with Latin American and Caribbean countries.

  Billions Borrowed

Maduro, who announced his “very important tour” in a national address Sunday after admitting Venezuela was in recession, made a stopover in fellow oil giant Russia on Monday before arriving Tuesday in China, his country’s largest investor and second-largest oil customer.

China has been a key ally of Venezuela since Chavez came to power in 1999 and imports an average of 640,000 barrels of Venezuelan oil a day, much of that paying off borrowing.

China has extended $42 billion in long-term loans to Venezuela, $24 billion of which has been paid out so far, according to Venezuelan officials.

The South American country is estimated to have the largest oil reserves in the world but depends largely on imports for basic goods, including food and medicine.

Maduro’s government wants Beijing to increase its oil purchases to one million barrels a day in the coming years and expand bilateral trade, which reached $20 billion in 2012.

Experts say the relationship between China and many Latin American states serves each other’s needs, with China hungry for natural resources and South America looking to offset the long-running geopolitical dominance of the United States.

During a trip last year, Xi said trade between China and Latin America should reach $500 billion a year within the next decade, with proposed direct investment hitting $250 billion.