CARACAS, Tuesday April 20, 2010 | Update
Beijing confirms USD 20 billion loan to Venezuela
Tuesday April 20, 2010  03:05 PM

The Chinese government confirmed on Tuesday that it granted two loans worth more than USD 20 billion to the government of President Hugo Chávez and that both countries signed oil and energy agreements.

"We hope China and Venezuela to make joint efforts to implement these agreements and take bilateral relations to a higher level," said Chinese Foreign Ministry spokeswoman Jiang Yu, reported Efe.

On Saturday April 17, the Chinese government and a corporate delegation signed seven bilateral cooperation agreements with Venezuela, Jiang said, including a "framework agreement on financing" under which the China Development Bank (CDB) will provide a USD 10 billion loan and other credit amounting to 70 billion Yuan (USD 10.25 billion).

According to Chinese media, the agreements were signed in presence of President Hugo Chávez and a Chinese delegation led by Zhang Guobao, the director of the National Energy Administration, as President Hu Jintao canceled a visit to several Latin American countries due to the Qinghai earthquake.

The fund in Yuan will be a pilot program to internationalize the Chinese currency, Chinese experts say. Given Venezuela's oil potential, the agreement could consolidate the position of the Chinese currency in the oil sector.

"We have signed many agreements on the oil and electrical sectors," the Chinese spokeswoman said.

With the agreements signed on Saturday, China ensures part of Venezuelan oil for its voracious economy, and Venezuela gets huge cash inflow at a time of falling oil prices.

Translated by Gerardo Cárdenas

Non-stop extraction of mineral riches

Oil and gas; gold and diamonds; coltan, coal, iron, bauxite, copper: the Venezuelan economy is extractive, as it relies on taking mineral substances from the earth for sale or trade.

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