2016: New Chinese Loans and Investments in Venezuela Were $2.43 Billion in 2016

Economic relations between China and Venezuela expanded significantly during Hugo Chavez’s Presidency (1998-2013). China had a large need for energy and Chavez wanted to lessen Venezuela’s dependence on oil sales to the United States. By 2015 Venezuela was exporting about 700,000 barrels of oil per day to China. [1] The economic relationship also included a Chinese investment of US$62 billion in more than 600 development projects throughout Venezuela. China also extended loans to Venezuela and by 2016, loans had expanded to more than US $65 billion [1]. About one-half of Venezuela’s oil shipments to China were for loan repayments.

In 2014, a Chinese loan added $4 billion to Venezuela foreign reserves (the joint China Venezuela Fund) [2]. In March of 2016, Maduro announced the withdrawal of $230 million from the Fund to pay for needed imports of raw materials for domestic factories.[3]

In May 2016 the Venezuelan government acquired 96 tons of medicines from China through a cooperation agreement signed in 2015.The medicine shipments from China would be paid in oil shipments from Venezuela.

In November 2016, the Venezuelan state oil company (PDVSA) and China’s National Petroleum Company (CNPC) signed a $2.2 billion investment deal to increase oil production by 227,000 barrels per day [4]. One project was for the rehabilitation of 500 wells of light crude.

Maduro publicly thanked China in a televised speech: “Many thanks for all the support you have given Venezuela in 2014, 2015 and especially 2016” [5]

  

1.     To, Emma and Acuna, Rodrigo, China and Venezuela South-South Cooperation or Rearticulated Dependency? Latin American Perspectives, November 2018

2.     Venezuela Puts $4 Billion China Loan in Foreign Reserves, Signs Major Oil Deal with Russia, Venezuelanalysis, November 19, 2014.

3.     Venezuelan Govt to Hand Domestic Industry up to US $7 Billion in Forex: Economy Czar, Venezuelanalysis, March 11, 2016

4.     China and Venezuela Sign $2.2 Billion Deal to Boost Oil Output, Venezuelanalysis, November 18, 2016

5.     Reuters, Venezuela to Tap $2.2 bn China credit line to boost oil output, November 18, 2016

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