Political Risk Latin America Blog @PolRiskLatam

Venezuela: a good deal from China?

Posted in News and Articles, Political Risk by politicalrisklatam on March 17, 2011

by Benedict Mander for Financial Times – Beyond Brics, March 16th, 2011.

What would Hugo Chávez do without China? From cheap fridges for the poor to life-saving state-to-state loans, help with building essential housing to massive investments in major oil projects, there’s scarcely an area of Venezuela’s economy where China doesn’t play a key role.

However, while there’s no question that China’s help is of great importance for Chávez – not least given a deterioration in relations with the private sector and countries that have more traditionally been keen to invest in Venezuela, like the US – some doubt whether he is always cutting the best deal.

On Tuesday, Venezuela’s leader signed a deal with the Industrial & Commercial Bank of China, which promised to evaluate making a $4bn loan to finance much-needed infrastructure projects, including construction, which another Chinese state company, Citic Group, will help with. Just the day before, an agreement was signed with China’s XCMG Construction Machinery Co to import hydraulic trucks to help build homes too; while the day before that, on Sunday, it emerged China would export agricultural machinery to Venezuela. (continue reading… )

 

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