Strategic partnership of China and Venezuela: oil, weapons, social programs

When Hugo Chavez came to power in February 1999 in the Bolivarian Republic of Venezuela, the annual turnover of this South American country with China was less than 200 million dollars. A decade later, China entered the top three most important trading partners for Venezuela. First place - in the United States, in 2010, exports from Venezuela to the States amounted to almost 65 billion dollars. In June 2011, the third Venezuelan-China trade and industry exhibition was successfully held in Caracas, the capital of Venezuela, where it was noted that trade between the two countries increased by 2010% in 42, reaching 10,2 billion dollars.

For comparison: the trade turnover of Venezuela with the Russian Federation in 2009 decreased by half and amounted to less than 300 million dollars. Such a significant increase in trade with China is explained simply: China does not want to depend on one or several partners and is looking for new suppliers of strategically important raw materials - “black gold”. China buys oil in Venezuela, and the scale of supply of this raw material is constantly growing, although both sides are not averse to increasing growth rates. Back in 2007, the Venezuelan authorities promised Beijing to increase oil export from 300 thousand to 1 million barrels per day, but in reality it turned out that it was not at all easy to do. At present, according to official data, Caracas supplies China with more 400 thousand barrels per day.

In November, 2007, China and Venezuela created a Joint Investment Fund, to which 6 billion dollars was invested, it was established to develop bilateral economic cooperation. As promised by Hugo Chavez, the foundation will be updated every three years. This investment fund will give a big boost to strategic cooperation with China and build joint ventures, the Venezuelan president stressed. The China Development Bank (DBK) contributed $ X billion to the 4 fund, the Venezuelan National Development Fund - $ 2 billion.

In 2008, the Venezuelan leader paid a visit to China, which resulted in a contract for the purchase of 4-X tankers by a joint Venezuelan-Chinese shipping company to ensure the growing export of Venezuelan oil. An agreement has also been concluded on the elaboration of a project to create a refinery in the oil belt of the Orinoco River for the processing of heavy oil, which is intended for export to China. At the same time, 12 drilling rigs were purchased from the Chinese for the needs of the state-owned oil and gas company Petroleos de Venezuela.

During his visit to China, Hugo Chavez again voiced his country's desire to increase oil exports to 1 million barrels per day in the period before 2012. At the same time, the question was raised about creating an enterprise in the Chinese province of Guangdong for processing 400 thousand barrels of Venezuelan oil per day. Commenting on the results of the visit of the Venezuelan leader, Chinese Foreign Ministry spokesman Jiang Yu noted that the cooperation between the two powers is based solely on mutual economic benefits, it is devoid of any ideological basis. The People’s Republic of China is interested in developing relations with all countries of the South American continent. Giving an answer to the question about the possibility of "joint confrontation" of the United States, the diplomat said that the relations of the two countries "are not directed against other countries."

In 2009, the productivity of bilateral relations became even greater. In February of this year, following the results of the working visit of China’s Vice President Xi Jinping to Venezuela, 12 agreements were approved immediately on the further development of economic cooperation between the two countries. Among them was an agreement to increase the capital of the Joint Investment Fund to 12 billion dollars, i.e., the volume was doubled. At the same time, it was reported that the debt of Caracas to the Chinese side would be repaid by selling oil to China. Chavez, known for his populist and loud statements, said that the country "is ready to supply China with oil over 200 years."

In April, while meeting with Hugo Chavez in Beijing, President 2009 of the People's Republic of China, Hu Jintao, called him a great and long-time friend of China. He noted that the 6 visit of the Venezuelan leader convincingly suggests that relations between the two countries "are developing with good dynamics." In turn, Chavez said that the global crisis shows that "the world center of gravity has moved to Beijing" and the PRC is already playing and will play a "paramount, extremely positive role for the whole world." The union of China and Latin America, in his opinion, "is extremely necessary."

A month after this visit, the state-owned companies Petrochein and Petroleos de Venezuela signed an agreement in the capital of China to establish a joint venture (JV) to develop and use Venezuelan oil fields. The largest oil corporation of China has received 40% shares in the JV. At the same time, according to the Xinhua News Agency, a joint venture was set up to build oil refineries in the province of Canton and transport Venezuelan oil to the People’s Republic of China.

In September, 2009, the Venezuelan Energy and Oil Minister, Rafael Ramírez, announced the adoption of an agreement under which China would invest 3 billion in oil production in the Orinoco River basin for 16 years. In December 2009, following the results of the 8 meeting of the intergovernmental commission in the capital of Venezuela, 29 agreements were signed to expand cooperation between the two countries in energy, mining, agriculture and technology. According to the People's Daily, the meeting was attended by almost 300 heads of departments and enterprises of Venezuela and China.

The Venezuelan State Oil and Gas Corporation and the national oil company of the People's Republic of China approved a contract for the joint development of the Junin-8 and Boyaca-3 blocks of the Orinoco oil belt. Commenting on these events, Hugo Chavez said that the expansion of cooperation with China is part of the strategic course of Caracas to reduce the country's traditional dependence on the American oil market. In recent years, as relations with China developed, Caracas reduced oil exports to the United States from 1,5 to 1 million barrels per day.

Strategic partnership of China and Venezuela: oil, weapons, social programs

Belt heavy oil Orinoco River.

2010 year

In April, 2010, Hugo Chavez reported news about obtaining a Chinese loan in 20 billion dollars for a period of 10 years (later it was reported that half of the loan in yuan, so China and Venezuela are trying to reduce dependence on the dollar system). He clarified that this loan is not related to the Joint Investment Fund, which receives separate financing. According to him, Venezuela is helping China to ensure energy security. Some time later, Venezuelan Energy and Oil Minister Rafael Ramirez said that Caracas supplies 200 thousand barrels of “black gold” per day to the Chinese in payment of the Chinese loan.

As part of the loan agreement for 20 billion, the China National Joint-Stock Oil and Gas Corporation signed an agreement with Caracas to jointly develop the Junin-4 heavy oil field. According to the People's Daily, this agreement provides for the creation of a joint venture that, in 25 years, is to produce 2,9 billion barrels of heavy oil in the Orinoco basin. This contract is a guarantee for China to repay the loan.

In June 2010, the Venezuelan Minister of Trade, Richard Canar, reported that during the 11 years of Chavez’s rule, more than three hundred trade agreements were signed with the Chinese. Speaking about the 20 billion-dollar loan, he said that the money will be mainly directed to the industrial development of the state through the transfer of the Venezuelan side of Chinese technology. In addition, the money will go to the purchase of food, they are sent to the most needy groups of the population. This is one of the populist steps of Chávez, a method of winning the hearts of ordinary people. According to the minister, Caracas tries to avoid intermediaries, establishing direct relations with Chinese companies and firms.

The ninth meeting of the intergovernmental commission of the two countries was held in December 2010 of the year in the capital of China. Vice-Premier of the PRC State Council Li Keqiang said, welcoming the Venezuelan delegation, that Chinese and Venezuelan peoples have deep, traditionally friendly relations, especially with 2001, when the two countries established strategic partnership. Venezuela, Lee Keqiang continued, has become an important investment and trading partner of China in Latin America. In connection with this speech, the Chinese edition of Renmin Ribao reported that by the end of 2009, Caracas took the fifth position in the list of China's main trading partners in Latin America (Brazil ranks first).

2011 year

In March 2011, representatives of the Venezuelan state oil and gas company and the Chinese holding CITIC Group signed a document of mutual understanding in the implementation of joint projects in the oil industry and the creation of a joint corporation to develop hydrocarbon fields in Venezuela. “This is the birth document of a giant mixed corporation,” said Hugo Chavez at a ceremony. Cooperation agreements with CITIC Group provide for the extraction of light and heavy oil in existing fields in the east of the state in the amount of 50 thousand barrels per day, as well as the development of a heavy and super heavy oil field in the Orinoco basin. At the same time, it is believed that the Chinese corporation should assist in securing financing for the joint project.

In addition, an agreement was signed on increasing housing construction already underway by CITIC Group to 40 thousand apartments over two years. In general, the plans of the Venezuelan government include the construction of 2 million dwellings. According to Chávez, a Chinese corporation can build housing on 7 thousand apartments during 500 years. The Chinese company should reassess the existing building materials production facilities in order to increase their productivity. The Chinese and Venezuelan authorities are planning and building new house-building enterprises.

Venezuela has also developed a plan for the development of railways, it is designed for investments in the amount of 22 billion dollars for a period up to 2030 of the year. According to the president of the State Institute of Railway Transport Franklin Peres, Chinese and Italian companies have to build more than 13 thousand km of railways over two decades. At present, the Chinese railway engineering company and the Cuban-Venezuelan enterprise Ferroviria Latinoamericana are building railway tracks in the northeast and in the central part of the state. In total, these companies should build about 1 thousand km of railways.

In May, the Venezuelans signed a contract for the purchase and launch into space of the second Chinese satellite, which was called VRSS-1. It will cost Caracas 140 million dollars. With it, Venezuelan experts will be able to conduct round-the-clock monitoring of the national territory. The first Chinese satellite ordered by Venezuela in the People's Republic of China was called "Simon Bolivar". He was put into orbit in October 2008 of the year. The purpose of the satellite is telecommunication support for a number of several social projects.

In August, a joint venture agreement was signed in Beijing to build the Nanhai oil refinery in China. The agreement was signed as part of a document from 2007 on the processing of 800 thousand barrels of Venezuelan heavy and super heavy oil per day at 3's new plants in the PRC. That is, after the "Nanhai" in China will build two more plants for the processing of heavy oil from Venezuela. The capacity of the Nanhai enterprise will allow 400 to process thousands of barrels of oil per day. The capital of the Venezuelan side in the joint venture was 40%.

There is information that with the help of China in Venezuela, more than 130 facilities are currently being built at the expense of investments from the Joint Investment Fund. According to Venezuelan Trade Minister Edme Betancourt, China’s investment fund received three loans of 4 billion each, the first of which was returned to Caracas, and the payment of the second loan would be completed at the beginning of 2012.

This year, Venezuela began selling household appliances made in China at discounted prices for the poor. As the Venezuelan president said, speaking at the presentation of the nationwide program, which was called “My well-equipped house,” the price for them will be almost 50% lower than market prices, compared to the prices in the “capitalist market”. Total must sell 3 million units of Chinese electrical appliances - gas stoves, refrigerators, televisions, air conditioners, etc. In addition, the country will build a Chinese company with a production capacity of 800 thousand electrical products annually. This year, the Sino-Venezuelan joint ventures launched the production of “popular” (their price in dollar terms ranges from 30 to 60 dollars) of mobile phones.

Venezuela and China are developing the tourism industry. According to the Venezuelan Minister of Tourism Alejandro Fleming, China through 5-10 years will be for Venezuela the main supplier of tourists. Waiting in the country of tourists and from Russia.

Military cooperation

Apparently, wanting not to spoil relations with the United States, Beijing does not particularly develop military-technical cooperation with Caracas. In this regard, Russia is more successful. The Chinese leadership seems to be hinting that you will not arm Taiwan, we will limit possible military ties with Venezuela. But several contracts were awarded.

- In 2008, Caracas bought KNGX K-18W Karakorum training aircraft from the PRC. They entered service in the country in 8 year. Ground equipment for servicing aircraft was also purchased. UBS K-2010W double planes can reach speeds of up to 8 km per hour and fly to a range of 800 thousands of kilometers. The aircraft can be armed with a suspended 2,2-millimeter cannon and has five suspension points for missiles and bombs.

- In 2010, the head of the Venezuelan National Anti-Drug Administration, Nestor Reverol, said that his institution began to act much more efficiently after 260 radars were purchased for 10 million in People's Republic of China (JYL-1 mobile radars / JY-11B).

In November, the Chinese military delegation led by Colonel-General General Binde, the Chinese military delegation led by the 2010-day official friendly visit, visited the 3 fiefdom. She was greeted at a high level - Foreign Minister Nicolas Maduro and the head of the Ministry of Defense Carlos Mata.

- China Xian Aircraft Development Company 2012 of the year will deliver the Shaanxi Y-8 military transport aircraft to the Venezuelan Air Force 8. As part of the Venezuelan Air Force, the Chinese military-technical cooperation will partially replace the old American C-130H Hercules, which cannot be fully used due to Washington’s failure to supply spare parts.

The Venezuelan Defense Ministry announced that it wanted to buy Chinese transport aircraft in November 2010, it was about the 10-12 BTC. In March, 2011, the information appeared that Caracas acquired 8-Y-8. The VTS Y-8 is an upgraded copy of the Soviet An-12 transport aircraft. A transporter can transport up to 96 people or up to 20 tons of cargo. The PTS is able to reach speeds of up to 660 km per hour and fly over distances up to 5,6 thousands of kilometers. The transporter can be equipped with a twin 23-mm cannon in the tail section.

Thus, during the reign of Hugo Chávez, a real big leap was made in relations between Venezuela and the PRC. Partly this process was helped by the ideological closeness of the two regimes, their socialist orientation. Although on both sides in the process of creating a strategic alliance, a completely pragmatic, rational approach can be traced. In addition, Beijing, leading the line of global economic expansion, could not pass by the largest oil fields in Venezuela. Given this factor, China, which has become the second largest consumer of “black gold” after the US States, is undoubtedly most interested in developing strategic relations with Caracas. In addition, Beijing has funds for the development of Venezuelan deposits. Caracas, having expelled the western companies, cannot develop them, there is neither finance, nor the necessary technologies. Beijing is indifferent to the ruling regimes of the countries with which it cooperates; it is not worth waiting for it from a violent "democratization". Hugo Chavez, in order to fulfill his promises in the field of social programs (which is worth the promise to build 2 million apartments over 7 years), investments are needed from China. That is, the interests of Venezuela and China completely coincide.
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  1. Rashid 15 September 2011 11: 18 New
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    Like Chekhov’s there - "Pale-faced Orinoco!" And now we can say: "Yellow-faced is already on Orinoco." I remember that we also said something about trade relations with Venezuela - oil, geology, weapons. The article says that since 2009 the turnover has decreased, this suspiciously coincides with the beginning of the reign of D. Medvedev, probably received instructions from the Washington regional committee.
  2. Ivan35
    Ivan35 15 September 2011 19: 41 New
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    Notice - we and China act as allies in the international arena. Our "friends" are their "friends." We are against the resolution of the pendos in the United Nations and against China. We want to squeeze pendos from Central Asia and China supports

    The dispute with the Japanese over the Kuril Islands - and China immediately supports us demonstratively - then they even concluded an agreement - about "harvesting sea cucumbers" in the Kuril Islands - as if they have nowhere else to get sea cucumbers
  3. Banshee 15 September 2011 22: 25 New
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    Sea cucumbers are one thing, and oil is another.
    After reading the points of cooperation, I gave birth to one question: what, ours could not? Build railways, apartment buildings, and everything else?
    Are we really good only to buy tanks and planes from us? I do not believe.
    We act with China as allies, but the results do not compare. Everything is somehow in favor of the Middle Kingdom, unfortunately.
    Some people need to look to the East more actively and move less before the West.
    1. Ivan35
      Ivan35 16 September 2011 17: 17 New
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      All right you say banshee (as always)
      Again 25. everything returns to the fact that we ruined the Union - our great Motherland - which did not creep in front of anyone and did not enrich the oligarchs at the expense of the people
      Now Russia is forced to maneuver - and cooperation with China, of course, is also forced (and as you always say in their favor) because there is an ENEMY much more dangerous - I don’t even like to call them PENDOS - it somehow belittles them - it reassures us - because in fact, the enemy is formidable and perhaps still can bring us all death - we need some other name - reflecting all their danger
  4. komel 22 February 2014 11: 35 New
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    Now the United States has oil thanks to the shale revolution. How much of this stock is enough for the US big question? Venezuela has the largest reserves in the world. China, as well as Russia, Ukraine sponsored Venezuela. If the Ukrainian coup is aimed at strengthening the NATO block, then Venezuelan tidy up the oil market and become monopolists, not virtually, as it is now with shale production, but quite realistically. Venezuela has more oil than Saudi Arabia, all together will give not only economic results, but also military superiority over China, which is now increasing momentum. Maduro is not consistent, either he must pursue a tough policy together with China, or the United States, like Yanukovych, will try to dismiss Maduro along with the government.