Você está na página 1de 2

1/11/2015

Will China Save Venezuela? | The Diplomat

Will China Save Venezuela?


With Venezuela on the cusp of default, Caracas is hoping
for more loans from Beijing.
By Shannon Tiezzi
January 07, 2015

As we head into 2015, one trend at least is carrying over from 2014
plummeting oil prices. And with the falling price of oil, major producers
are falling into economic recessions. One of the hardest-hit countries,
Venezuela, is a longtime partner of China and now is looking to Beijing
for an economic lifeline.

Image Credit: China and Venezuela image via


Shutterstock

Venezuela, one of the founding members of OPEC, is heavily reliant on


oil production. According to OPEC, oil revenues make up around 95
percent of Venezuelas export revenues. More generally, oil and gas account for roughly a quarter of Venezuelas GDP. Given
the outsized role oil plays in its economy, Venezuela needs a global oil price of $117.50 a barrel to account for government
expenses in 2015, according to Deutsche Bank. As of January 6, Brent crude oil was trading at under $53 dollars a barrel a
five and a half year low. Barclays expects Venezuela to announce a major currency devaluation and possibly slash government
spending to avert the worst of the crisis but still predicts the countrys economy will shrink by 6.2 percent in 2015.
The drop in oil prices came amidst broader economic turmoil for Venezuela, including rapid inflation, declining production, and
shortages in imported goods. With Venezuela on the cusp of economic collapse, including the possibility of government default,
President Nicolas Maduro set off for what he called an international tour a very important tour to take on new projects,
given the circumstances of falling income that our country faces. Unsurprisingly, Maduros trip will include a visit to his
countrys top economic partner: China.
China has already extended over $50 billion in loans to Venezuela since 2007 in return for guarantees of oil deliveries in the
http://thediplomat.com/2015/01/will-china-save-venezuela/?allpages=yes&print=yes

1/2

1/11/2015

Will China Save Venezuela? | The Diplomat

future. With Venezuela in desperate need of financing, Maduro is hoping Beijing will once again open its coffers. However,
China has proven reluctant so far to extend more cash to Venezuela beyond the $4 billion cash-for-oil deal President Xi
Jinping signed with Maduro during a July visit to Venezuela.
Venezuelas Nuevo Herald, citing Inter American Trends, said that Maduro was on the cusp of winning at $16 billion loan from
China, if Caracas is willing to agree to the very harsh conditions set forth by Beijing. According to Inter American Trends,
China is once again seeking guarantees of future oil deliveries in exchange for the loan, which could require Venezuela to up its
shipments to China by more than 100,000 barrels per day. Venezuela currently exports over 500,000 barrels of oil per day
to China, more than half of which already go toward repaying previous loans.
This is not a done deal. Beijing remains reluctant to commit more resources to Venezuela, in part because of the precarious
economic situation. As Eurasia Group analyst Risa Grais-Targow told the Wall Street Journal, China learned a lesson from
the initial no-strings-attached loans made to Venezuela and is unlikely to go down that path again. The death of former
President Hugo Chavez, who provided a personal bond between Venezuela and China, has also impacted the bilateral
relationship. Still, China has an interest in preventing a Venezuelan default. Even if Beijing does not shell out billions in new
loans, it could give Caracas permission to restructure repayment of previous loans, allowing Venezuela to sell more oil instead
of shipping it to China according to the original loan terms.
When asked if China would show support to the Venezuelan government, Foreign Ministry spokesperson Hong Lei replied
that Beijing understands that the fall of international oil price has exerted an impact on the economy of some countries,
including that of Venezuela. He added, The two sides enjoy full-fledged and effective cooperation mechanisms in the field of
financing. Relevant cooperation between the two countries is running smoothly.
Maduro will also stop in unspecified OPEC countries, where he will try again to convince fellow OPEC members to agree to cut
production in order to shore up prices. A similar attempt last November was unsuccessful. If Maduros pleas once again fall on
deaf ears, Venezuelas fate will be largely in Beijings hands.

http://thediplomat.com/2015/01/will-china-save-venezuela/?allpages=yes&print=yes

2/2

Você também pode gostar