Mérida, November 24th, (Venezuelanalysis.com) – Venezuela and China today signed new accords promoting joint development projects, as Venezuelan authorities highlighted the deepening of bilateral relations since the two countries began a strategic alliance in 2001.
The accords in energy, technology, telecommunications, industry and agriculture were signed by the Venezuelan and Chinese governments at the close of the 10th Meeting of the China-Venezuela High Level Joint Commission, which took place in Caracas this week.
“In truth, this strategic alliance, that is already more than a decade old, has been shaped in example of how cooperation between sovereign countries should be, a new model of cooperation, a new paradigm based on mutual respect…Venezuela and China are great friends, great comrades”, stated Venezuelan President Hugo Chavez as the accords were signed.
According to the energy agreements signed between the two countries, three new electricity plants will be constructed in Venezuela by June 2016; an installation of 900 megawatts in the Junin industrial complex, and two of 300 MW in Anzoátegui and Zulia states. The Commission also evaluated existing joint projects in electricity production, including plants currently being constructed in Carabobo and Aragua.
“These are very big projects and are part of the national government’s response to the electricity situation that presented itself in 2010 [when a long drought caused a national electricity shortage]. Without a doubt, they are going to increase our generation capacity to stabilise our national electrical system”, explained Venezuelan energy and petroleum minister Rafael Ramirez, as he presented the results of the 10th Meeting yesterday.
In petroleum, China has opened a new US $4 billion worth of credit to increase oil production of the mixed Venezuelan-Chinese company Petrolera Sinovensa, including the refinement and transport of Venezuelan crude.
Accords signed in areas of science, technology and intermediate industries involve the installation of an antenna factory between Telecom Venezuela and Chinese company ZTE Corporation, and develop the first stage of an Electro-Domestic Industrial Complex in Miranda state.
Ramirez further reported that with Chinese involvement, new factories linked to Venezuela’s steel and aluminium sectors are being constructed to contribute toward Venezuela’s mass housing construction program, launched in April.
A Decade of Deepening Bilateral Relations
The China-Venezuela High Level Joint Commission was established in 2001 to develop and coordinate the newly entered strategic relationship between the two countries.
Commenting yesterday on the significant development in Sino-Venezuelan relations over the past decade, Venezuelan Minister for Planning and Finance Jorge Giordani stated “Venezuela and China are called on to be the drivers of a new paradigm of integral development in the world. This tenth meeting of the High Level Commission symbolises the achievements of a decade of joint work in which we have been developing one of the most diverse and important relationships Venezuela has in the world”.
According to Venezuela’s Presidential Press, the two countries have signed 318 accords since entering into the strategic relationship, including in the areas of energy, infrastructure, science and technology, agriculture, education, culture, and social affairs.
Minister Ramirez explained that an important factor underpinning this relationship is the mutual interest between China as the world’s second largest economy, and Venezuela as holding the world’s largest reserves of crude oil.
Giordani confirmed yesterday that exports of Venezuelan crude to China, beginning at 45,000 barrels per day (bpd) in 2005, have now reached 410,000 bpd. The Venezuelan government hopes to raise this to one million bpd in coming years.
In return for Venezuelan oil exports, China has become a major investor of development projects in Venezuela. 2007 saw the creation of the China-Venezuela Fund, a financial mechanism for joint projects which now contains US $32 billion and funds 160 socio-productive projects in Venezuela, the greatest amount of Chinese financing in any Latin American country.
Chinese socio-productive investment has included training of Venezuelan personnel and technology transfers. Following an agreement signed in 2005 China also built and launched Venezuela’s first satellite, the Simon Bolivar Satellite, in 2008. China has also become Venezuela’s second biggest trading partner after the United States. Worth US $3 million a decade ago, trade between Venezuela and China is now $17 billion per year according to Giordani.
Venezuelan chancellor Nicolas Maduro defined Venezuela’s growing relationship with China as based “on profound values of respect, equality, and joint development”, and that they follow a foreign policy aimed toward “the re-conquest of independence and sovereignty, a product of the Bolivarian revolution led by Hugo Chavez”.
“We are on the correct path in the construction of a new world, a multi-polar world of peace, without hegemony, that has to arise,” concluded Maduro.
Venezuelan authorities have stated that deepening diplomatic relations with China and other alliances with countries in Asia, Africa, Latin America and Europe is part of promoting a “multi-polar” world order which counteracts US hegemony.
Meanwhile China’s growing commercial and diplomatic relationship with Venezuela and other Latin American countries such as Brazil are often held by international observers as evidence of waning US influence in the region.