Venezuela receives $5 billion loan from China

Venezuela’s Finance Minister Rodolfo Marco Torres posts on Twitter that country has received resources from China following Venezuelan President Nicolas Maduro’s January visit to Beijing

Photo by: AP
Photo by: AP

Chinese president Xi Jinping and Venezuelan president Nicolas Maduro in a file photo taken in Beijing, September 2013.

Updated Aug 4, 2015

Venezuela has received $5 billion in funding from China according to Finance Minister Rodolfo Marco, who shared the news on Twitter.

“Today we received the resources that correspond to the second renewal of Tranche B of the Joint China-Venezuela Fund,” Marco tweeted.

Marco added that the “renewal” of the tranche indicated “confidence between governments” and that the funds would be used to “promote and diversify our economy.”

Venezuela, a member of the Organization of the Petroleum Exporting Countries (OPEC), is experiencing widespread shortages of basic goods following a drop in oil prices in 2014.

The country is dependent on oil sales for 96 percent of its foreign income, and its foreign reserves are down 20 percent from a year ago, at under $17 billion.

“These mechanisms of cooperation reaffirm the commercial partnership with China, a strategic ally of our country,” the minister tweeted.

In 2007, during the presidency of Hugo Chavez, accords made with China provided Venezuela with $46 billion in loans to be repaid in oil. Some of that money, Reuters reported, has been used to supplement international reserves.

Venezuelan news outlet TeleSur reported that $24 billion had already been paid back to China, Venezuela’s biggest lender, which currently receives 540,000 barrels of oil a day from the country.

China happens to be the world’s largest buyer of oil and a substantial player in petropolitics, the New York Times reported, with a steady supply flowing through big stakes in oil companies in many countries. Venezuela has the world’s largest oil reserves.

Chinese loans to Venezuela or other suppliers of crude often come with stipulations to hire Chinese companies for construction, engineering or oil services, Reuters reported.

Citing Chinese government figures, Telesur reported that trade between China and Latin American countries was worth $240 billion in the first 11 months of 2014, up 1.5 percent from 2013.

TRTWorld and agencies