VENEZUELA & CHINA CONTINUE TO DEEPEN THEIR ALLIANCE

Venezuela and China Consolidate
“Strategic Alliance,” Expand Bilateral Trade

Public accords signing ceremony in Caracas, taken from Venezuelan TV

Published on December 25th 2009
by James Suggett -
Venezuelanalysis.com

Mérida, December 24th 2009 (Venezuelanalysis.com) –
Venezuelan and Chinese government officials and business
leaders met in Caracas this week to discuss bilateral
relations. As a result of the accords signed at the
meeting, Venezuela will increase its supply of oil to China
to more than 600,000 barrels per day next year, and China
will increase its investments in Venezuelan agriculture,
infrastructure, mining, and energy production.

In a press conference, Venezuelan Planning and Development
Minister Jorge Giordani called Venezuela’s growing economic
relationship with China “a consolidated strategic alliance
based on the premise of equality and mutual respect that
will be consolidated even more by two countries that have a
shared vision of a multi-polar world.”

Venezuelan President Hugo Chavez vowed to supply China with
“all the oil it needs for its development and advancement”
and said Venezuela hopes to eventually supply a million
barrels of oil per day to China. According to Telesur,
Venezuela is currently China’s fourth largest oil supplier.

In addition, China’s Sinohydro Corporation and Venezuela’s
state electricity company CORPOELEC agreed to cooperate to
increase Venezuela’s hydroelectricity production. Venezuela
has experienced rolling power outages over the past three
months as a result of drastically increased demand and a
drought that caused a drop in the water level at a
principal dam.

The Chinese Development Bank Corporation also pledged a $1
billion credit for Venezuela’s state-owned mining company,
CVG, and Chinese state-owned and private companies agreed
to invest in Venezuelan railways, fish and shrimp
production.

Venezuelan Trade Minister Eduardo Saman said he expects an
increase in Venezuela’s imports of Chinese cars, electric
appliances, pharmaceuticals, and other goods over the
coming years, and that this will help to combat domestic
price speculation.

In recent years, China and Venezuela have created mixed
enterprises, in which Venezuela maintains a 60% controlling
share, to explore for, extract, refine, and transport oil
from Venezuela’s Orinoco Oil Belt, as well as to explore
for natural gas off the Venezuelan coast.

Last year, China built and launched Venezuela’s first
telecommunications satellite, and Venezuelan students are
studying aerospace engineering in Chinese universities.

Since 2003, annual trade between the two countries has
increased from less than a half a million dollars to
approximately $5 billion in 2008. In addition to this,
China and Venezuela have signed $5 billion worth of planned
Orinoco oil accords, and created a $12 billion bilateral
investment fund for future projects.

President Chavez said the unprecedented growth in bilateral
relations between Venezuela and China has the goal of
creating a “balance in the world, a pluri-polar world,” in
which there is no single dominant super power such as the
United States. He said China “has demonstrated that it is
not necessary to attack those who are weakest in order to
be a great power.”

Since Chavez’s election in 1998, Venezuela has increased
its economic relations with countries in almost every
region of the world, including Africa, Southeast Asia, the
Middle East, and Eastern and Western Europe, and Latin
America.

CHAVEZ: “Thank God there is a revolution in China; thank God there is a revolution in Venezuela; thank God we met each other and we shook our hands"

The Strategic Fund China-Venezuela
to be injected with 12 billion dollars
in three years

ABN 24/09/2008 Caracas,

Caracas, Sept 24. ABN.- The President of the Bolivarian
Republic of Venezuela, Hugo Chávez Frías, informed that in
three years 12 billion dollars will be injected to the
Strategic Fund China-Venezuela.

During his fifth visit to China, Chávez explained that he
sent the request to China three months ago and he will take
advantage of his visit to renew the fund.

President Chávez detailed that in a first stage, China
contributed with 4 billion dollars and Venezuela with 2
billion. “These resources are being invested in the country
(Venezuela) in hundreds of small and medium works that are
currently under construction.”

“Chinese Government, with a prove of friendship and
confidence to Venezuela, has answered positively,” he said.

Venezuelan Head of State commented that China and Venezuela
are able to resist the consequences of the current crisis
of the capitalism because both countries had and have
revolutions; and, thanks to that, it is also possible the
close bilateral relation that has been developed since
almost a decade ago.

He reminded that the relation went stronger when both
countries decided to establish a strategic alliance and
demonstrate that Venezuela and China could create strong
links despite geographical distance and the excuses of some
people saying it was impossible to send oil to that
country.

“They kept us tied to the empire. We were a colony. The
Government was not in Caracas, but in Washington,” Chávez
said explaining the dependence Venezuela had to the North
American market.

“Now, we are free to travel to Beijing. We are working to
increase the oil processing to China,” he stressed.

“Soon, we will reach 400,000 barrels a day (sent from
Venezuela to China), then 500,000 barrels next year, and we
are going to keep working until we reach 1 million barrels
a day,” he said.

Chávez explained that to face worldwide energy crisis,
Venezuela and China are increasing their trade and
relations in oil sector with agreements to build refineries
and tank ships, as well as increasing oil supply to China.

In reference to the financial crisis, President Chávez
insisted that, nowadays, when there are banks going to
bankruptcy and it is so hard to get a credit, both
countries decided to double their joint fund of 6 billion
dollars in order to support the development in sectors like
energy, housing, sanitation, aqueducts, agriculture, among
others.

Regarding food crisis, Chávez pointed out that both
countries keep a close cooperation in agriculture and food
industry since two years ago.

“All of them (the agreements) allow us to overcome the
(worldwide) crisis,” said Chávez with respect to the
bilateral cooperation, while the world is passing through
hard moments.

“Thanks God there is a revolution in China; thanks God
there is a revolution in Venezuela; thanks God we met each
other and we shook our hands,” he insisted.

Translated by Ernesto Aguilera

CHINA-VENEZUELA DEVELOP STRATEGIC ALLIANCE

"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
markets.

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
Washington.

"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
Capitalism'.

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.

BUSINESS NOT POLITICS

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
billion.

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
energy.

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.