China to lend Venezuela $5 billion

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Venezuelan President Nicolas Maduro (L) and China's President Xi Jinping. File photo: teleSUR

By Caribbean News Now contributor

BEIJING, China — China has agreed to extend a $5 billion credit line to cash-strapped Venezuela, as President Nicolas Maduro headed to Beijing, Bloomberg News reported.

Venezuelan finance minister, Simon Zerpa, told Bloomberg that Venezuela would repay the loan with either cash or oil. The two countries were also expected to sign what Zerpa described as a strategic alliance on gold mining.

Maduro is seeking additional Chinese support to weather an economic meltdown since oil prices collapsed nearly four years ago that has led to civil unrest and the collapse of the country’s currency. Maduro has halted most payments on Venezuela’s foreign debt and owes more than $6 billion to bondholders, cutting off most sources of new financing.

China has been a key lender to Venezuela since 2008, when it first provided funds for infrastructure and oil projects in the country, Bloomberg noted.

China has lent an estimated $70 billion in several installments, most to be paid back in oil, according to Asdrubal Oliveros, director of Ecoanalitica, a consulting firm in Caracas.

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18 COMMENTS

  1. More money down the drain…Venezuelan future generations will be born into debt. But the Chinese get what they want: influence in South America, Gold and lots of cheap oil. The more Venezuela melts down, the more cheap commodities and influence they can get.

  2. As a set piece monopoly game, the Chinese continues to demonstrate that they are the game’s Bank managers. As a game of Chess in geopolitics, they are proving themselves to be very just as adapt and skilful players in that game too.

    Pawns moved forward and keeping their king out of harm’s way, rooks and bishops playing protective roles, Queen ready to pounce as the American king is being made ineffective by his own side, this Chinese move look like the American king is in Check and needs move, but in so doing he faces further danger from the Chinese knights by way of fast advancing Chinese technologies.

    Is this the beginning of the end for the Americans in the backyard game?

  3. No currency was mentioned so I have to assume this was in Bolivarian dollars: $ Bolivarian 5,000,000,000 converts to $US 62,586.06, not much of a loan! (LOL)

  4. IMHO the Americans – the Global Policeman – are already experiencing the Fall Of The American Empire – how long did they really think it would last? The USA runs on almost pure greed, “In Cash we trust”, and the resultant involvement in foreign wars both suck oil out of the rest of the world and make the arms producers and politicians even more filthy rich that they ever were.

    But I predict all of their foreign “adventures” will bear bitter fruit… you cannot keep invading someone else’s sovereign countries, decade after decade, kill, rape, destroy, cause unimaginable suffering and expect that when you leave they will rebuild and forget. At some point SOME relatives of those dead and suffering will want revenge, and for greatest effect they will take their revenge while on US soil.

    America has fought all wars after 1766 outside of the USA – fat, dumb and happy US citizens have come to assume their own homeland is safe and secure. Terrorism? In my humble opinion you ain’t see nothing yet.

    • Whatever the USA has done, or lacked in proper actions, has nothing to do with the current disaster in Venezuela. It is the total and effective mismanagement of the recent Governments that have led the country down the drain. And it goes back to before Chavez…the lack of a social agenda to help the impoverished led to the populism exploited by Chavez.
      But blaming ‘others’ for their own mismanagement and incompetence is taking on criminal proportions.

  5. This is indeed a welcoming move by China, not only for Venezuela but the entire region as a whole. With this US$5 billion loan, and partnership in China’s New Silk Road commercial plan, Venezuela’s cash strapped petroleum industry and its economy gets the much needed boost longed for.
    Congratulations China! Welcome once again to Latin America and the Caribbean; the so-called US’s “back yard”.

    To the end the Venezuelan people stands to gain not only on the consumer side of things, but in the manufacturing sectors also with the establishment of a few Chinese funded plants, another boost to Venezuela’s ailing economy and a slap in the face to US/EU sanctions.

    • Venezuela’s total debt is way above US $150 billion… so this little extra loan will do no good. Totally ignorable if you factor in the Venezuelan Government mismanagement, nepotism, corruption…should I go on?
      And no, the USA is certainly not the shining example of successful foreign policy. But the mess the Venezuelans are in is totally of their own doing.

  6. By the time the Maduros and Chavez’s have had a divvy up much of the new loan will be going in another direction. Of course, they need to make sure the dirty generals get their share also.

    China has already plowed more than $50 billion into Venezuela though cleverly, through oil-for-loan agreements. Venezuela still owes China $19 billion, from previous loans. $10 billion of that is owed under the $20 billion Large Volume Long Term fund signed in 2010. A further $8 billion remains outstanding under the Joint China Venezuela Fund via three tranches of $4 billion to $5 billion each.

    According to Reuters Venezuela as of last year had fallen behind on contracted oil shipments to China. The China Development Bank earlier this month pledged $5 billion “in favor of the increasing and strengthening of the country’s oil production.”

    Venezuela owes money everywhere and is in default on all fronts. They owe over $60 billion to bondholders. The country’s central bank is almost dry. Venezuela’s government owes $185 million on their 2027 bond. Venezuela owes Russia $3.15 bln and lots of oil for unfulfilled contracts.

    Where on earth does a $5 billion new loan from China fit in? It’s like chaff in the wind, the people will still be starving and dying without medical aid.

    Vinciman the $5 billion is given on the understanding it is used in the oil production. It is loaned so as the Chinese can get their oil. It’s not loaned for any social reason, or to start any new industries, or to feed the people, or to fund the hospitals. It will not fill the supermarket shelves or repair and replace hospital equipment or supply drugs and medicines. The Chinese do not want to see Venezuela fail for selfish reasons, they want to protect their previous investments. If this was a new investment request China knowing what they now know would not give Venezuela the light of day, nada.

    Venezuela has given away billions to nasty dirty little upstart rulers in the Caribbean, and those scum bags have taken the money whilst Venezuelan people have to flee their homeland so as they can feed themselves. Vinciman my dear, you can count your boss the comrade Ralph Gonsalves among the stinkers.

  7. Is it a loan or is it a credit line which is two different things. A credit line means they do not get the whole amount at the same time. The Chinese say a credit line, the Venezuelans say a loan, I prefer to believe the Chinese. After all, what they want is their oil which they have already paid for. So none of the credit line will benefit the people, only the Chinese.

    I am sure they will take Gold and uranium if they are offered it, or if they demand it. Remember it was the uranium that killed Hugo Chavez, carrying a sample [which caused cancer] in a leaking flask on an air trip to Iran.

    Venezuela supplies Iran with uranium for its nuclear program. The Iranian military is still involved in uranium mining in Bolívar state, 360 miles south of Caracas.

  8. China has been and still doing wonders in many African countries, on an equal footing as they move along the lines of development. Maybe it’s Venezuela’s turn…Congrats Venezuela! At lease the yanks should be ashamed.

    • No Vincyman it’s you and the Gonsalves of this world who should be ashamed for helping destroy democracy and human decency throughout the Americas and the Caribbean. You and the fat stinker who carries out the bids and calls of the Cuban and Venezuelan leaders whilst poor people starve and are being murdered by microwave weapons, and that includes Saint Vincent.

  9. Yeah, eat your imperialist loving heart out! According to President Maduro, “With China we have built a strategic relationship that has gone through several stages. In the stage of large oil revenues and bonanza, with China, we moved forward on the creation of a Chinese-Venezuelan financing fund…”In ‘lean times’ we achieved sustainable agreements from the financial and economic point of view (…) This visit initiates a new era in China-Venezuela relations in the framework that we are entering a new era of economic recovery”.

    Accordingly as reported also, “…China will support oil production, gold, basic industries, medicine, trade, telecommunications, cultural and educational exchange, and security and defense”.

    You hear that Simon “…and defense”. Now having emphasized that…, go and cry some more to your imperial masters…Oh you lover of Yankee bourgeois wickedness, evilness, sanctions and oppression, propagandist of and for the “Dark side”.

  10. I agree with you Vinciman.

    China has also forward bought Venezuelan gold and Venezuelan uranium. They are willing to fund and help Venezuela when the US has done the opposite, so they deserve all the bounty they can carry away, oil and all.

    China will also help Venezuela with their defense as Russia did, they will supply them with all the arms they want to contract purchase.

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