Finance

Venezuela and China sign agreements, opening up the South American country’s oilfields

In this photo provided by the Miraflores Presidential Palace, President Nicolas Maduro stands at attention during a event marking the 81st anniversary of the National Guard, in Caracas, Venezuela, Saturday, August 4, 2019. Venezuela's government says several explosions heard at a military event were an attempted attack on President Maduro. Information Minister Jorge Rodriguez said in a live broadcast that several drone-like devices with explosives detonated near the president. He said Maduro is safe and unharmed but that seven people were injured/ (Miraflores Presidential Palace via AP)

Venezuela and China signed valuable deals and cooperation agreements on Friday, some of which give China access to the South American country’s coveted oil fields. According to Reuters, Venezuela’s president Nicolás Maduro traveled to Beijing on Wednesday in search of an “economic agreement” to boost Venezuela’s collapsing economy,

“I am going with great expectations and we will see each other again in a few days with big achievements,” Maduro said in a government-broadcasted statement before boarding his airplane bound for Beijing.

In total, 28 separate deals were signed by the two parties. One of the most important agreements gives China a more substantial stake in Venezuela’s Sinovensa oil firm, and another agreement now allows the Chinese to build as many as 300 wells in Ayacucho, part of the socialist country’s “oil-rich Orinoco Belt,” according to Reuters.

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Venezuela and China signed valuable deals and cooperation agreements on Friday, some of which give China access to the South American country’s coveted oil fields. According to Reuters, Venezuela’s president Nicolás Maduro traveled to Beijing on Wednesday in search of an “economic agreement” to boost Venezuela’s collapsing economy,

“I am going with great expectations and we will see each other again in a few days with big achievements,” Maduro said in a government-broadcasted statement before boarding his airplane bound for Beijing.

In total, 28 separate deals were signed by the two parties. One of the most important agreements gives China a more substantial stake in Venezuela’s Sinovensa oil firm, and another agreement now allows the Chinese to build as many as 300 wells in Ayacucho, part of the socialist country’s “oil-rich Orinoco Belt,” according to Reuters.

Other agreements concerning “mining, economy, security, technology, and healthcare” were signed as well, according to Business Standard. Of particular note is the deal between China’s ZTE Corporation and the Venezuelan “Ministry of People’s Power for Health,” although the particulars of that partnership have not been disclosed.

Although these deals are great for the Chinese, giving the country a secure source of energy, what exactly Venezuela is getting from Beijing is unclear at this time. However, China has given Venezuela around $50 billion in “oil-for-loan” programs over the last decade.

If Maduro is lucky, his country will get substantial economic assistance, as Venezuela’s economy is currently crumbling with no signs of any type of recovery in the future. The collapse began in earnest in 2014 as a result of low oil prices, according to the BBC.

In the years since, the standard of living for Venezuela’s population has plummeted, while the country’s inflation rate, which hit 83,000 percent in July, is expected to reach 1,000,000 percent by the end of the year. The state has been the scene of continued unrest, and more than 2.3 million Venezuelans have fled the country, creating a migrant crisis in neighboring nations.

Besides seeking money from China, Maduro also raised the country’s minimum wage this week by a considerable amount in hopes of mitigating the economic meltdown. However, according to Reuters, a vast amount of businesses cannot afford to pay the new wages, and many experts fear the move will only worsen the situation.

“It’s a process of devastation,” said Maria Uzcategui, the president of Caracas’ retailers’ guild, Consecomercio, in a phone interview with Reuters. “Companies that have been around forever have vanished during the past two or three weeks.”

As for Maduro, the socialist leader began his visit to China by visiting the Chairman Mao Memorial Hall, where Mao Zedong’s remains are kept. According to Al Jazeera, most foreign leaders forgo a visit to the site because of the millions of people killed under Mao’s rule.

“We are beginning this state visit in the best way because we have come to pay tribute to the great helmsman Mao Zedong,” Maduro said on Friday, according to Al Jazeera. “I was very moved because it really reminds of one of the great founders of a multipolar 21st century.”

About Joseph LaFave View All Posts

Joseph LaFave writes about finance, maritime issues, healthcare, the National Guard, and conflicts around the world. Before becoming a journalist, he worked as an EMT in Florida and as an ESH engineer for Lockheed Martin supporting several DoD and NASA satellites. He holds a Bachelor of Science degree from Florida State University and a Master of Science in Management from Southern New Hampshire University.

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