Wednesday, 24 September 2008


"Maoist" Chavez eyes closer China

By Emma Graham-Harrison

BEIJING (Reuters) - Venezuelan President Hugo Chavez on
Tuesday unveiled early plans for two new refinery projects
in China, kicking off a visit to the energy-hungry nation
that could aggravate stormy ties with top oil user the
United States.

Fiery leftist Chavez paid tribute to China's autocratic
late leader Mao Zedong minutes after stepping onto Chinese
soil, and said he hoped to build a joint tanker fleet and
nearly double oil exports to the world's number two
consumer next year.

"We are talking about three refineries, to bring our crude,
which is heavy, and process it here in China," he told
journalists beside his official plane.

"We are also working on a project to construct a joint
Chinese-Venezuelan oil fleet."

China is cautious about handing out permits for refineries,
which are highly sought after by foreign oil companies and
crude-producing nations itching for access to its vast

The two countries in May agreed to build a 400,000 barrels
per day (bpd) plant in southern Guangdong province, the
first such investment deal between Caracas and Beijing. It
would be unprecedented for China to approve two more in the
near future.

But Chavez does have large amounts of oil to offer in
return, and the self-styled revolutionary and florid critic
of Washington is keen to reduce his nation's traditional
reliance on energy markets in the United States.

China's big energy appetite and Communist Party government
make it an attractive alternative. Chavez has visited China
five times over the last decade and often plays up
political ties between the nations, which contrast with his
ideological war against the "imperialist" regime in

"We are in the land of Mao Zedong and I pay tribute to him.
I am a Maoist," he announced to journalists and a
bemused-looking Chinese policeman on the airport's VIP red
carpet, before recommending Bolshevik leader Vladimir
Lenin's book 'Imperialism: The Highest Stage of

China's current reformist leaders are respectful of Mao as
the country's revolutionary founder but, now focused on
capitalist-friendly policies, avoid praising his visions of
farming communes and perpetual revolution.


Chavez's colorful rhetoric contrasts with the cautious,
muted tone of Chinese diplomats who prefer to focus on the
business side of the two nations' ties.

"Sino-Venezuelan relations have no ideological hue, are not
aimed at any third party and do not affect Venezuela's ties
with any other country," foreign ministry spokeswoman Jiang
Yu told a regular news conference on Tuesday.

But the nature and value of the socialist nations' growing
embrace may anyway spark concern in the United States,
which gets around 10 percent of its oil from Venezuela.

Chavez earlier this month threatened to cut off supplies to
the United States "if there were aggression against
Venezuela" and warned that doing so would push crude prices
above $200 a barrel. But Caracas would need to find a new
buyer for exports that in the five months to May were near
1 million bpd.

Beijing lent Caracas $4 billion this year and the two have
signed a deal to produce and upgrade the country's heavy
oil that will cost around three times as much, or $12

China will launch Venezuela's first satellite this year and
Chavez said in May he planned to buy Chinese military
training planes, expanding recent arms purchases.

Jiang declined to comment on any deals that might be
signed, but Chavez said more than 20 were drawn up,
covering areas from food cooperation to telecoms and

He added that Venezuela aims to increase oil exports to
China to 500,000 bpd next year, from around 300,000, and
hit 1 million bpd in four years.

If they can meet Chavez's target for China sales next year
they would supply over 6 percent of the country's oil, but
although imports have risen strongly this year customs data
suggests that Caracas may have set itself a difficult goal.

Venezuelan crude imports over the first eight months
climbed by more than 60 percent compared with a year
earlier, but were still only 5.18 million tonnes, or
155,000 bpd. Export volumes were boosted by nearly 3
million tonnes of diesel and fuel oil.

No comments: