China, Venezuela Boost Economic Cooperation with US$ 12 Billion Fund

Chinese Vice President Xi Jinping wrapped up his official visit to Venezuela yesterday, signing a dozen new agreements with Venezuelan President Hugo Chavez in the areas of energy, telecommunications, information, and agriculture. February 18, 2009 (venezuelanalysis.com)– Chinese Vice President Xi Jinping wrapped up his official visit to Venezuela yesterday, signing a dozen new agreements with Venezuelan President Hugo Chavez in the areas of energy, telecommunications, information, and agriculture.

Xi pledged another US$8 billion towards a joint development fund for projects in the South American country, while Venezuela agreed to contribute an additional $4 billion. Chavez said the fund will be used for development in education, health, and infrastructure in Venezuela.

The new agreements are the newest sign of the increasingly close ties between Caracas and Beijing.

“We’re near to 300 signed documents, advanced projects that are very strategically important,” Chavez said, during a speech at the China-Venezuela Business Forum.

In the field of energy, agreements were signed allowing for preliminary steps towards new drilling projects in Venezuela’s Orinoco basin, the creation of a company to manufacture oil tankers, and multiple refineries on Chinese soil, including one that would process up to 400,000 barrels per day (bpd).

“We know that Venezuela has the largest oil reserves in the world,” Chavez affirmed. “All the oil that China needs for its development in the next 200 years is here in Venezuela.”

In honor of Xi’s visit, Chavez formally inaugurated Venezuela’s first cellular phone factory, the Venezuelan Telecommunications Corporation (VTELCA), which was constructed with Chinese support and technology in the northern state of Falcon.

During a live television and radio broadcast, the Venezuelan president connected to the factory via Venesat-1, Venezuela’s first geostationary satellite launched late last year in another Sino-Venezuelan project.

“This new company will greatly diminish the amount of hard currency we are spending yearly to import cell phones,” explained Telecommunications Minister Socorro Hernandez. The factory will eventually produce around a million cell phones yearly, in addition to landline and cordless telephones and related parts. Hernandez explained that the factory would initially supply state-run telecom company Movilnet, but later supply private companies operating in the country as well. Venezuela consumes seven
million cell phones yearly, she said.

Chavez highlighted that the plant currently employs 47 men and 41 women, who were selected with the help of local “communal councils” – neighborhood organizations who meet regularly to plan community development projects.

Xi lauded the inauguration of the plant, stating that through the technology, “we hope to satisfy peoples’ needs, not just in Venezuela but throughout all of Latin America and the Caribbean.”

The leaders also signed new agricultural accords, including an irrigation project with the Guarico River, in central Venezuela. Chavez announced that of the six billion originally deposited in the joint development fund, four billion had been spent on 41 projects, of which 14 are agricultural, which he considers the “most important” area of cooperation between the nations.

Other agreements signed during the visit include the construction of a plant in Venezuela to manufacture electrical household appliances, and another between Venezuela’s regional news network, Telesur, and a Chinese state television channel CCTV.

Trade between the countries grew by 72 percent in the last year, surpassing US$10 billion.

Venezuela’s president thanked “big sister” China for their support in the transfer of technology, noting that Venezuela “never could have done this with the [neoliberal] model of the past.”