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Beijing, Caracas boost trade relations
Thu, 10 Mar 2011 11:37:47 GMT
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Venezuelan President Hugo Chavez (L) and Chinese President Hu Jintao. File Photo
Business transactions between China and Venezuela are increasing dramatically in number as China is seeking to open up and maintain markets in Latin America.

Caracas-Beijing trade ties gained momentum after Venezuelan President Hugo Chavez visited China in 2004 to sign lucrative energy deals with Chinese President Hu Jintao.

In April 2010, Venezuela used $20 billion in Chinese funds to finance a number of power, agriculture and technology development projects, a Press TV correspondent reported Thursday.

"China is going to give financing to Venezuela ... over the long term and in large volume of some $20 billion," Chavez said at the signing ceremony with Chinese officials in April 2010.

The 10-year loan is being paid with the shipping of 200,000 barrels of oil a day, and the transfer of funds with preferential conditions.

Moreover, Venezuela's state oil company, PDVSA, and China's National Petroleum Corp have signed a $16.3 billion deal to increase oil exports up to one million barrels a day by 2012.

“China has a huge market potential. President Chavez decided to diversify the country's foreign market in order to reduce dependency on the US,” said Rafael Antolino, a professor at Bolivarian University.

The global financial crisis, as a result of which China lost its export markets in Europe and North America, prompted Beijing to open up and maintain markets in Latin America.

Caracas and Beijing have also had extensive cooperation in the field of telecommunications technology. The launching of the Chinese-made satellite Simon Bolivar was a turning point for Venezuela in its drive towards independence in the telecoms sector.

Currently, Venezuela sends China 460,000 barrels of crude oil a day to repay an $8 billion loan that finances infrastructure projects in the country.

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