China Spoils Washington's Economic War against Venezuela

[Demeter]

http://russia-insider.com/en/financial-war-us-china-granted-venezuela-billion-loan/5220

The article originally appeared at German Economic News. Translated for RI by Anita Zalaldinova

In the coming months China will lend Venezuela, which faces bankruptcy, ten billion dollars. These funds are part of a bilateral agreement. For China it’s a way to quench its energy needs, while the US continue the confrontation line with Venezuela.

Venezuela is under the threat of sovereign default. In providing two five-billion dollar loans, China has become an important partner for the struggling country. The first part of the loan is the joint Chinese-Venezuelan Fund, and will be directed into major projects, CNBC reported. The agreement will be signed later this month. China extended the terms of the loan to five years, giving Venezuela more breathing room, as the terms are typically limited to three years.

The second part of the loan will be used in the oil industry. China will support investments in oil fields, intended to help Venezuelan oil company PDVSA increase production, the official said. 96 percent of Venezuela's foreign exchange revenue comes from the export of raw materials.

The recent fall in oil prices is one contributor to Venezuela financial pressure. Interest rates on bonds have risen again. Venezuelan President Nicolás Maduro claimed the US is responsible for the fall in oil prices late last year. "Are you aware that an oil war rages?" said Maduro on Monday in a broadcast speech to businessmen. "This war has one goal – to destroy Russia." In addition, it is also directed against Venezuela "to destroy our revolution and bring about a collapse of the economy."

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[Judi Lynn]

1. This is an interesting article. Real food for thought. Thank you. n/t

[Demeter]

3. Latin America is attracting attention in my economics sources

It's rather a double-purpose.

Another one was talking about how China helps Africa build infrastructure, without a single soldier or warship. I am deeply ashamed of my nation, government, and the silly sheeple who let this aggression pass unchallenged.

[Marksman_91]

2. It's their own problem they didn't diversify their economies

Plenty of countries, smaller ones even, and in harsher geographic positions, are doing pretty well for themselves without the need for a major oil industry. It's the chavista regime's own fault that it didn't take advantage of the oil bonanza to improve production and develop other industries.

[djean111]

4. Be that as it may, they deserve a chance to work themselves out of it, don't you think?

Real people live there.

[hack89]

7. But when the problem is government incompetence

you have to honestly ask whether they can work themselves out of it. Their problem is whether they can arrest the ongoing economic collapse before social unrest gets out of hand. What we see now is a quickening cycle of unrest and political repression. Maduro is ruling by decree and arresting political opponents - the question is how far he is willing to go to tamp down public unhappiness with the government. The big test will be whether he decides to hold elections and whether he will permit any significant opponent to actually run against him.

[djean111]

8. I understand that. It is just that I don't see anything but a return of rich people buying

and running and privatizing if the United States has its way. And I am, I admit, a bit puzzled as to why the US needs to step in to any country it can get its hands on. Could it be for oil, and not the welfare of the people?

[hack89]

9. Nothing we are doing is impacting their economy

we are their largest trading partner and buy a lot of their oil.

I have never understood the oil thing - not only can we get all the VZ oil we want, but American oil companies are right now signing lucrative contracts to help VZ develop their oil fields. VZ is not hurting the oil companies.

[djean111]

5. Gosh, I was told the TPP and TTIP would fix all of our China problems!!!!!!

Anyone told China?

[hack89]

6. More debt they can't pay. nt