China commits $20 billion to Venezuela at first China-Latin America forum in Beijing

© REUTERS/Andy Wong/Pool

Venezuela's President Nicolas Maduro (front L) walks with China's President Xi Jinping as they arrive for a welcome ceremony at the Great Hall of the People in Beijing, January 7, 2015.

President Maduro announced that China has agreed to invest 20 billion dollars in Venezuela following the China-Community of Latin American and Caribbean States (CELAC) meeting in Beijing. Venezuelan officials hope that increased Chinese investment will offset some of the shortfalls in the Venezuelan economy due to decade-low oil prices.

Xi Jinping, the Chinese president opened the First China-CELAC Forum by pledging US$250 billion in new investment in Latin America over the next decade. CELAC was formed in 2011 with the goal of consolidating regional integration and reducing the influence of the United States in Latin America.

Speaking to Latin America's shift away from the United States and towards China, President Maduro stated "This is a vital point. I told President [Xi Jinping] over dinner last night: there is unique opportunity in this moment in history we're living through."

Following the meeting in Beijing President Maduro told the Venezuelan News Agency "we rounded up more than $20 billion in investment." But the newspaper reported that "it remains unclear whether the sum represents a fresh arrangement or is part of pre-existing oil-for-loans deals."

China has already awarded US$50 billion of credit to Venezuela since 2007, most of which is paid through oil shipments. Venezuela ships 524,000 barrels of crude oil and derivatives to China per day, nearly half of which goes toward paying existing loans. This amount is expected to increase to one million barrels per day in the next year.

"It can be said that the development of China-Venezuela relations and win-win positive cooperation have been raised to a new level," Xi Jinping stated following the China-CELAC meeting. He added, "I am convinced that this meeting will render fruitful results and promote a shared development."

Speaking to Venezuela´s growing relationship with China, Venezuelan Vice president Jorge Arreaza stated "China is a great potential, and it is not imperialist. It is a great potential that wants for all of us to have a respectable and dignified living standards."

On the independent leftist news site , Jesús Silva R. raises questions about the implications of increasing economic agreements with Venezuela and China "as revolutionaries committed to popular sovereignty and the intransigent defense of the Bolivarian Constitution, we suggest rethinking the process in which agreements with China are made, especially since tens of billions of dollars are at stake, as well as control of our oil for years and future generations."

The Venezuelan President is continuing on his "international tour" to round up more economic support in the face of decade-low oil prices. After a fruitful visit in China, is headed to fellow OPEC nations. Since oil exports make up 95% of Venezuela´s GDP, Wednesday´s drop in oil prices (Brent Crude fell below US$50 per barrel for the first time since 2009), will have a strong impact on the Venezuelan economy.

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