China Offers Largest Credit to Venezuela

By TAMARA PEARSON – VENEZUELANALYSIS.COM

Merida, April 18th 2010 (Venezuelanalysis.com) – Yesterday government representatives from Venezuela and China signed seven agreements in Caracas, six energy based ones and one around petroleum. China also offered US$20 billion in financing, the largest offer it has made in the last fifty years.

(SNIP)

The two governments agreed to exploit the Junin 4 section of the Orinoco Oil Belt together and as part of this they established a joint company between state owned Petroleos de Venezuela (PDVSA) and state owned China National Petroleum Corporation (CNPC), to carry out the initiative. They also established some economic and tax conditions.

Further, the two governments signed six agreements to strengthen Venezuela’s national electric system through training, technical assistance and technology transference from China as well as the construction of a thermoelectric plant of 500 megawatts capacity in Merida state. This will involve cooperation between the Chinese company CAMC Engineering and Venezuela’s national electric company.

(SNIP)

...Venezuela currently supplies China with 460,000 barrels of oil daily. This is up from 200,000 barrels in 2006.

(SNIP)

Since 2003, annual trade between the two countries has increased from less than a half a million dollars to approximately $5 billion in 2008. The Venezuelan government sees such increased trade and cooperation as a way of decreasing the region’s dependence on the US.

http://venezuelanalysis.com/news/5291

--------------------------------------

A few weeks ago, the Chavez government additionally signed up six companies, from as many countries, for exploration/production of the huge Orinoco oil belt (biggest in the world--twice Saudi Arabia's). It has been proactive, also (as evidenced by these deals with China) on development of new energy plants to solve Venezuela's electricity problem, caused by an unusual drought in the Andes region affecting Venezuela's hyroelectric plants and by Venezuela's astonishing economic growth from 2003 to 2008. It's interesting that electricity workers in Venezuela are fully engaged in the process of solving this problem. Chavez just met with them to hear proposals developed in nationwide assemblies involving more than 10,000 electricity workers. The meeting with Chavez is described in this article by Federicao Fuentes of the Green Left Weekly (4/20/10).

http://www.greenleft.org.au/2010/834/42913

Fuentes reports that Chavez recalled "how socialism failed in the Soviet Union because power was not in workers’ hands"--quite an interesting comment, given rightwing criticism that Chavez is following the Soviet model. I've also read interviews with Chavez in which he refers to the failures of Soviet communism and particularly criticizes Russian treatment of its satellite countries in Central Europe and the failures of those dictatorial models. He has read extensively on the subject, and has obviously thought about it a lot. One wonders what he thinks of China--which now has a system that seems to justify the old, prejudiced phrase about "the mysterious East." Personally, I cannot fathom how China makes decisions or how its political system works. It is quite baffling--and seems to be a quite weird hybrid of rampant 19th Century capitalism and still-unfathomable 20th century communism with huge masses of people treated like mere cogs in the wheels.

Chavez's remarks about the importance of worker control echoed remarks of the electricity workers. Fuentes says that the electricity workers union, Fetraelec, "has long campaigned for worker participation as a solution to problems in the electricity sector."