Maduro Signs Major Deals in China as Venezuela Strives to Meet Heightened Consumer Demands

Venezuelan president Nicolas Maduro shared “good news” from Chinese capital Beijing yesterday, after meeting with Chinese leaders and business owners to forge further pacts meant to mutually benefit both countries’ economies.


Santa Elena de Uairen, January 7th, 2015. ( Venezuelan president Nicolas Maduro shared “good news” from Chinese capital Beijing yesterday, after meeting with Chinese president Xi Jinping and business owners to forge further pacts meant to mutually benefit both countries’ economies.

“We have wrapped up over $20 billion in investments during the course of this day’s work,” Maduro said today from Beijing, indicating that the money would be used for social, developmental and industrial projects including the building of 1500 new schools in Venezuela and the expansion of operations on the Orinoco oil belt.

Venezuelan finance minister Rodolfo Marco Torres highlighted meetings with financial institutions CitiBank and the Developmental Bank of China, saying both expressed “total commitment to the development of the country and support of our productive sectors.”

The minister, who accompanied Maduro far East, also announced their plan to introduce a new currency exchange system upon their arrival in Venezuela. The government authorities will travel from China to Iran and other Petroleum Exporting (OPEC) Countries in a renewed effort to “fight for fair oil prices,” Maduro told reporters.  

As the barrel of Venezuelan crude continues to drop below $50 a barrel, Wall St. analysts and media have taken at turns predicting the grisly collapse of the country’s economy. But Marco Torres insisted yesterday the country is entirely solvent, and intends to fulfill all pending debts- including two billion dollars in arrears which will mature this March.

Venezuela currently ships 524,000 barrels of crude oil and derivatives to China per day, nearly half of which goes toward paying loans of the China-Venezuela Developmental Fund. That amount is expected to increase to one million bpd by 2016.

The minister also informed reporters yesterday of a special delegation of Chinese business leaders who will travel to Venezuela to evaluate potential investment opportunities in the country’s newly denominated “special economic zones.”

For his part, Maduro criticized the majority of media outlets which portray the country as experiencing economic crisis.

“Venezuela is not bankrupt, Venezuela is a tremendous economic power with the largest oil reserves in the world … Venezuela has the capacity to guarantee the functioning of the economy and society,” he told reporters in Beijing.

Even some community media outlets in Venezuela have come under fire for posting photos of empty shelves in the government subsidized supermarkets in Caracas.

Since January 1st, many stores have not been able to restock their shelves, causing serious shortages in the Venezuelan capital and across the country. Touristic areas were especially hard hit, as the influx of tourists caused items to run off the shelves twice as fast.

In an interview this morning, Luis Rodriguez, a representative of the association of privately-owned supermarkets (ANSA) attributed the sudden disappearance of items to the irregular four-day holiday caused by the proximity of New Years Day to the weekend. He implored people to stay calm.

“We are not saying everything is one hundred percent OK, but inventories are always low during the first week of the year… and starting today we have already received much more products,” Rodriguez said.

Meanwhile the vice-president of the Ministry of Food Sovereignty Carlos Osorio lashed out at news sites who had published such photos, accusing them of misrepresenting the situation.

The generally pro-government community news outlet published an indignant message in response to Osorio’s accusation, claiming the photos were important for “accountability purposes” and defended the people’s right to information.

According to Rodriguez, supermarkets will replenish stock within 10-12 days.

Acquisitive Power and Production

In his 2015 “Recovery Plan” announced last month, Maduro put special emphasis on agricultural production as a way of battling scarcity.

In an interview with state television channel VTV this morning, National Farmers’ Confederation president Jose Agustin Campos explained that although national food production has tripled in the past 15 years, it has still been unable to keeps up with levels of consumption.

In 1998, Campos said, the average Venezuelan consumed 11 kilos of beef per year, whereas now each individual is consuming almost 24 kilos a year.

“No one used to eat much meat because our people could not afford it,” he said.

But it now falls to the government to bring production up to speed with the people’s increased spending power, Campos went on, citing the need for more advanced farming machinery brought from Argentina and Brazil through Mercosur trade agreements. Although, Campos admitted, scarcity of imported machine parts have made maintenance of equipment particularly tricky in 2014.

However, statistics show that Venezuelans are not only eating proportionately more, they are also traveling, studying, and purchasing more commercial goods than ever before.

President Maduro already detailed plans to expand tourism and transportation in the 2015 budget, and directed vast sums toward higher education and elderly pension programs, but this week’s trip to China revealed government plans to meet the population’s heightened spending power.

The Venezuelan president announced plans to further “democratize the internet and subscription television in Venezuela, and continue making computers and telephones of the highest quality and first generation in the world.”

New agreements include public contracts with 4G smartphone producer ZTE and the automobile manufacturer Sany.

Other reports feature plans for the installation of Yutong bus factory in the Venezuelan state of Yaracuy and three different cement plants across the country.