Igadi na Rede / China e o mundo chinés - China and Venezuela: the "perfect match"?
 
 
China and Venezuela: the "perfect match"?
Xulio Ríos (East Asia An International Quarterly, marzo/2012)
 
 

The relationship between China and Venezuela has experienced in recent years a comprehensive and rapid development, both economically and politically and in other areas. The establishment of a "strategic partnership" between the two countries in 2001 has defined a stable framework for collaboration. China and Venezuela established diplomatic relations in June 1974 but it has been with the start of the presidency of Hugo Chavez (1998) when relations have intensified dramatically. In that recognized and open impulse, that Caracas defined as a "perfect match”, it should be noted, however, some important reservations.

Economic cooperation

China calls "pragmatic" the ambitious economic relationship with Venezuela that has been built, covering areas such as energy, agriculture, high technology or infrastructure construction, with the first two sectors favored by both governments. In total, more than 300 cooperation projects have been implemented or are in progress (1). The Convention on Economic and Technical Cooperation signed in September 2000 is the driving framework of this process.

The following table gives an convincing X-ray of the evolution of bilateral trade, each time with significant rises, also reflecting the effects of the crisis in 2008. In the first ten years of the Bolivarian government, the rise in the trade balance is close to 5,000%.

Evolution of trade between China and Venezuela

Year       Millions of dollars US
1974      1,4
1996      188
1998      200
1999      276
2000      351
2001      589
2002      478
2003      742
2004      1.333
2005      2.141
2006      4.319
2007      5.800
2008      9.850
2009      6.300
2010      10.250
2011      16.000 (estimated figure)

Source: http://ve.china-embassy.org/chn/smwl/qian410/t216003.htm
http://ve.china-embassy.org/chn/smwl/qian410/t216005.htm
Author interview with Ambassador Rocio Maneiro, Beijing 18.10.11

In the field of energy, it can be noted that Venezuela has become the fourth largest supplier of oil to China and its fifth largest trading partner in Latin America (2). Shortly after the visit of Prime Minister Li Peng in 1996 and even without Chavez in the Venezuelan presidency in June 1997, the National Oil and Natural Gas China Corporation achieved through an international tender, the right to harvest in two old oil fields in Venezuela, worth $ 358 millions. Production began the following year. It was then the largest Chinese investment project in Latin America. Until the end of 1999, the total investment volume amounted to about $ 400 million and 11 Chinese-funded enterprises were established in the country. At that time Venezuela had not expressed any interest in oil supplies to China with the excuse that its location was not favorable because of its remoteness.

In 2004, by agreement, Venezuela licensed to the China National Petroleum Corporation (CNPC) 12 wells Zumano mature oil field, which has large reserves of heavy crude. To this end Petrozumano SA was created, to perform exploration and production activities in the states of Anzoategui and Monagas.

In September 2009 it was announced an agreement between the two countries to extract together about 450,000 bpd of extra heavy crude in the Orinoco oil belt, the main energy reserve of the Latin American region. Thus, China's investment (16,000 million) was added to Russia (20,000 million) in the area. China also built drilling and oil platforms, railways and housing.

The projected commitments meant that in 2010, Venezuela cherish the goal of exporting to China about 1 million barrels a day, - to the U.S. currently exports 1.5 million. Other delayed to 2012 the culmination of this figure. On the other hand, the state oil company Petroleos de Venezuela (PDVSA), took to build three oil refineries in the Chinese territory and Chinese oil companies involved in the construction and operation of refineries in the Orinoco basin, with the goal of not only exporting to China, but also to third countries. Furthermore, Chinese shipyards are building to Venezuela three double-hull supertankers to transport Venezuelan crude to China. Venezuela craves its own fleet of tankers to not depend on middlemen and save costs.

The development in progress of Block Junin 4 in Anzoategui belonging to the Orinoco Oil Belt, which includes the establishment of a joint venture between PDVSA and China's CNPC with an investment of 16,300 million dollars estimated initial production in 2012, 50 thousand barrels per day which will increase the production to reach 400 thousand barrels per day in 2016.
Additionally, through an agreement in September 2008 it was agreed the establishment  of a joint venture between PDVSA and SINOPEC to develop the Junin Block 8 and the opportunity to participate in the development of Junín a project which involves the construction of a refinery in Cabruta in Guarico state with a processing capacity of 200 thousand barrels per day of extra-heavy crude. (3) This project will allow the extraction of 400 barrels per day. The agreement to operate in Junin 8 (also in the Orinoco Oil Belt) is of high importance because it has, roughly, with 40 billion barrels in reserve, twice the ones that the U.S. has on its territory to supply enough oil to China during the present century. China's investment under this operation amounts to 16,000 million dollars over the next three years.

It should be noted that the reserves of the Orinoco Belt, initially calculated at 234,000 million barrels of heavy and extra heavy oil, added to those already confirmed of 80,000 million barrels in other parts of Venezuela, place the South American country as the world's largest oil reserves.
On the other hand, once the reserves of the block are determined by the Boyacá Convention for Quantification Study Implementation and certification of reserves of the deposits, it will be proceed to the development of it.

As for the refineries, Venezuela plans to build at least three on Chinese territory where they would prosecute its own crude oil, transported from Venezuela by a Venezuelan tanker fleet that will be built with Chinese technical assistance. The first of these refineries has been approved by the Asian nation and it will be located in Guangdong province, China. This is a joint venture between PDVSA and Petro China Company. It will have a refining capacity of 400 thousand barrels per day.

Another important investment that has taken place by both governments has been the Venezuelan acquisition of 28 drills in May 2006 to the CNPC. Nonetheless, the most ambitious project was conceived in August of that year through the Memorandum of Understanding for the Establishment of a joint venture for assembly and construction of drills between PDVSA and CTPDC  (China Petroleum Technology & Development Corporation) by which it was established the China - Venezuela Industry Drills, SA located in the state of Anzoategui. With the establishment of this company and the installation of manufactured drills in the country, Venezuela embarked on a process of substitution of the drills that are currently in operation, usually rented, having significant costs to the domestic industry to more than 50 000 dollars a day. In 2009 and 2010, the first 2 drills were joined that are operating in Anaco and Barinas, respectively, were joined.

The China National Offshore Oil (CNOOC) will also participate in the Mariscal Sucre Project. This PDVSA's project seeks to satisfy the domestic gas demand and eventually to expand to foreign markets. Proven gas reserves in Venezuela are valued at 5.67 trillion cubic feet. This is a potential business for Venezuela that with an incipient production forms an strategic alliance with China, the seventh largest producer of natural gas after the United States, Russia, European Union, Iran, Norway and Qatar, to trace its production and China, for its hand, would use the excess production of gas to be exported by Venezuela.

In the mining industry, China and Venezuela have been conducting feasibility studies to allow the reactivation of the Venezuelan mining industries and the possibility of undertaking new equity firms together in this same area. Venezuela possesses great mineral wealth in iron, coal, gold, diamonds, aluminium, bauxite, however they have a nationalized basic industry that is unproductive and that needs to be relaunched through foreign direct investment.  In this sense, the government of Hugo Chavez has advanced the so-called Socialist Guayana Plan 2009-2019, which puts in the hands of the working class the operation and control of basic industries, without neglecting the importance of China to assist refloating of these industries. In this way, China, through Chinalco (Aluminum Corporation of China), is investing $403 million in CVG-Alcasa, Venezuelan aluminum company, for its revival.

Venezuela supplies at prices well below market, iron ore to China's Wuhan Iron & Steel Group (Wisco) through direct sales with the Corporacion Venezolana of Guayana. These transactions are supported through a contract signed in 2009 to a term of 7 years, which will allow the steelworks to ensure the supply of this mineral at prices far below world market.

Nevertheless not all is oil and minerals. China annually produces 500 million tons of cereals. It is the first country in the world cereal production. Beijing has a great agricultural experience and can help Venezuela in promoting agriculture.  In addition to providing equipment, some Chinese companies are already engaged in several projects related to irrigation systems.  In fact, China actively participated in the rehabilitation of the irrigation system Tiznados that Chavez inaugurated in 2008 in the state of Guárico. Irrigation systems are essential tools for food production and, therefore, to ensure food sovereignty, one of the objectives set by the Bolivarian government. Nonetheless, Beijing is also involved in studies on soil quality, provision of seeds and the development of production lines of the so-called white corn. Meanwhile, Venezuela began in 2011 the import of oilseeds, pulses and grains to keep their food reserve under contract with the Heilongjiang Beidahuang State Farm Business Trade Group.

Chavez also announced that China will install in Venezuela factories of rails, sleepers, rail cars and locomotives that will be produced with iron and steel from the Andean country, in order to encourage the national rail system recovery. China finances the construction of 500 km of this network in Venezuela. Moreover, the formulation of these projects has led to the formation of different Sino-Venezuelan joint ventures in various areas, including the construction of machinery.

In the order of the infrastructures, the priorities, in addition to the railways, are focused on telecommunications. Technical cooperation covers from the optical fiber to the manufacture of mobile phones in Venezuela, but the most notable fact has been the manufacturing, building and launching of the first artificial satellite of Venezuela, the Venesat I or Simón Bolívar under an agreement between the two governments signed in 2005.  The satellite was launched into space on October 29, 2008 from the Xichang Centre in south China. Since January 2009, Venezuela directly controls the satellite. It is expected that a second satellite will be launched in 2013, this time built with Venezuelan labor and technical assistance from China.
Beijing supports the development of a technology park that will allow Venezuela to build small satellites and bring the Internet, mobile telephony and cable to almost all households at affordable prices. Venezuelan technicians are trained in this area in China.

On the other hand, Vetelca, the state communications company, in cooperation with the Chinese telecommunications company manufactured the ZTE C366 mobile phones at a price of about $ 14. The project engineers received training of Chinese staff.

In April 2004 the Letter of Intent signed between the Ministry of Science and Technology and the Ministry of Light Industries and Trade of Venezuela with the company Lanchao Group Co. Ltd of the People's Republic of China, to establish the Venezuelan joint venture company Industry Technology (VIT), assembly-oriented computers.  The technology transfer from China allowed technicians in this country to move to their facilities to become familiar with the production process until the Venezuelan technicians were able to carry out the full operation of the company.

Venezuela and Haier Electrical Appliances Corp. Ltd. China pledged in May 2010 to establish an appliance factory with technology transfer from China and also to import appliances placed the Venezuelan government in the Venezuelan market through its popular distribution networks.

In the month of June 2009 the first China-Venezuela industrial exhibition was held in Caracas, aiming to expand mutual understanding and strengthen the foundations of cooperation that craves to be extended to other groups and sectors.

On the economic front, because everything seems to smile at the Sino-Venezuelan cooperation, with a gradual diversification of contents and actors, while maintaining the energy body and agriculture as the backbones of their shared interest in its strengthening and development.

Moreover, in the financial order, cooperation began in 2010. Projects managed in yuan are estimated at about twenty, and it exits the political will to gradually increase that number.  The signing of a financing plan between the Venezuelan government and the China Development Bank (CDB) contextualize the relationship. Both countries decided to create earlier this decade, a joint financing fund to finance projects in Venezuela with 4,000 million U.S. dollars provided by China and Venezuela providing 2,000 million. In February 2009, during the Vice President Xi Jinping's visit to Venezuela, the fund was expanded in other 6 billion additional dollars, which, according to Caracas, will provide secure funding to undertake development projects and to keep the economy growing despite the global financial crisis (4). The Bank of Economic and Social Development of Venezuela (BANDES), a state agency committed to building a bilateral social and productive development platform, manage the fund. And now it reached the figure of 12,000 million dollars. The China's contribution to projects in Venezuela reached the figure of 32 billion dollars. (5)

The 4 billion that brought Venezuela to the fund were actually funded by China through the BDC. The four-party agreement and the financing include the delivery mechanisms of oil that constitutes the debt payments that is to be hired. Thus, Venezuela (PDVSA) sends oil (not less than 200 thousand barrels per day) to China (CNPC), which will pay into an account of the BANDES that has created the BDC in China, namely, the oil sales to China do not enter PDVSA accounts to invest in production but they remain in that country by way of repayment of debt. In this way, through the Venezuelan oil, Caracas pays the Chinese the 4 billion dollars for their share of the Fund.

A second fund was created in April 2010. China, through the BDC makes a loan to Venezuela who gets it through the BANDES. It's called the Long Term Fund and Large Volume worth 20 billion dollars, of which 10 billion must be submitted in U.S. currency and the rest in yuan with a term of ten years.  The mechanism of this fund provides that PDVSA will pay the debt owed with oil deliveries scheduled as follows: not less than 200 thousand barrels of oil per day in 2010 that then should increase in 2011 to 250,000 bpd and 300 000 bpd later in 2012 until all obligations in the period of time are fulfilled. With the help of this fund, Venezuela has invested in about 400 projects in agriculture, industry and telecommunications, recalled the president of the National Assembly of Venezuela, Fernando Soto Rojas, on a recent visit to Beijing (6).

In 2005 the Sino-Venezuelan cooperation began in housing through an agreement between the Venezuelan Ministry of Housing and Citi Group company whose investment amounts to 905 million dollars, with which it hopes to build 20 000 houses in the state of Barinas and Caracas, specifically at Fort Tiuna. In 2011 it was agreed to build 7 000 additional housing to help solve the housing crisis experienced by the Venezuelan nation and that has increased after a strong rainstorm that hit in late 2010.

In the construction of the Plains Railroad participates Engineering China Railways Corporation (CREC), working on the assembly of 468 kilometres of railway network. Additionally, it is planned the construction of a container terminal at Puerto Cabello that will allow the expansion of the port, a work that will be executed by the China Harbour Engineering and the Ministry of Transport and Communications and for which an initial investment of 600 million has been made . (7)

Furthermore, in relation to transport, it is appropriate to mention that in 2010 Venezuela bought from the China Aviation Industry Corporation (AVIC) 25 aircraft intended to nurture the foundation of domestic airlines and to repower Conviasa (Venezuelan Consortium Aircraft Industries and Air Service).

Political mutual trust

Based on the assumed belief that both are developing countries, the second axis of the Sino-Venezuelan relationship sits on the exchange of high level visits, close cooperation in international affairs based on the application of identical criteria and the coincidence in the defence of what they regard as a basic principle of international relations: non-interference in internal affairs. His foreign policy principles are part of the promotion of a multipolar world in which nations interact in a context of fair, just, egalitarian and peaceful cooperation without precedence, as required by an ideological alignment, the schemes of imperial domination, characteristic of the capitalist system.

Add to this the nationalism that both countries share and that at levels of its power structure means finding political solutions that lead to the political disagreement with those who aspire to the universal shaping following political comparable models. This circumstance makes the coincidence of points of view on multilateral fora by not endorsing and sanctioning to veto decisions that drive the Western powers, especially the U.S., reaffirming an independent foreign policy that lets them to attempt to disparage any external influence.

Diplomatic relations between China and Venezuela were established in 1974. But until the arrival of President Chávez there was only one visit to China by President Herrera Campins (in power between 1974 and 1984). In 1999, bilateral relations offered a modest balance: they had signed 19 agreements so far, of which only 2 came to effect and both related to the needs of the diplomatic and consular personnel. From 1999 to today, a total of 360 agreements were signed of which about 200 are fully operational. Venezuelan authorities speak of "explosion" of cooperation.

Between the visits of senior Chinese leaders to Venezuela during the Chavez's mandate include: Li Ruihuan (May 2000), Jiang Zemin (April 2001), Zeng Qinghong (January 2005), Xi Jinping (February 2009). The first visit by a Chinese leader to Venezuela was ousted starring Zhao Ziyang, in November 1985. Also Li Peng as prime minister visited Venezuela in November 1996. Hu Jintao has not visited Venezuela in spite of visiting the region in 2004 (Brazil, Chile, Argentina and Cuba), 2005 (Mexico) and 2009 (Costa Rica, Cuba and Peru). (8)

Meanwhile, Hugo Chavez has visited China six times (1999, 2001, 2004, 2006, 2008), the last in April 2009, meeting with Hu Jintao, Wen Jiabao, Xi Jinping and many senior leaders of the country, visiting different Chinese provinces and showing off his memory with quotations from Mao Zedong. (9) On October 23, 2009 he announced the creation of a  "Mao fund", with an initial capital of 100 million bolivars ($46.5 million), due to the economic interests of China-Venezuela fund. The fate of this fund is linked to social projects. (10)

Political dialogue at the highest level, reinforced with the exchange of presidential visits, ministerial and technical delegations established a dense network that is gradually consolidating. Also through the promotion of all types of exchanges between parliamentary delegations, party delegations and so on.

In international affairs, bilateral cooperation is a fertile ground. China, for instance, has supported, against Guatemala (US-backed option), the application from Caracas to access a non-permanent seat on the Security Council of United Nations (2006). Venezuela did not support the convictions promoted by some countries in international forums in relation to the human rights situation in China and support the Chinese approaches in disputes such as Iran or North Korea, amidst many others. Moreover, both parties are aware that their understanding has a strong regional dimension, as it contains not only Venezuela but also Mercosur and Unasur, throughout Latin America. (11)

Naturally, Caracas has joined the Chinese claim of creating an international currency to end the dollar's hegemony, demanding the urgency to make changes in the prevailing financial system to make it more fair and inclusive. It is currently under study and experiment the use of alternative currencies in trade using own currencies.

Chavez's proposal to expand ALBA's relations with China, an idea launched during his visit to Beijing in September 2008 has been received with caution (12). In this framework, the project would include the installation of a submarine cable between Caracas and Havana, with ramifications for the rest of the Caribbean and Central America. The largest reservoir lies in the ideological and political connotations of the project and its belligerence, something that does not appeal to China, who reiterates active and passive, that their relationship are not based on ideology nor are directed against a third party nor have a vocation to affect other countries. China seems to escape any form of political commitment to the project led by Chávez that would connote foreign policy ideologically.

The Bolivarian socialism and the socialism with Chinese characteristics have in common the attempt to provide a national response to the demands of modernization, development and social justice. The invocations of shared ideological sources in Caracas offer a reading perhaps more committed, what for China, rooted in pragmatism, is not completely seduced from and even considered dangerous in the view of their own historical experience from maoism.

Military relations

These date back to the eighties of last century, when both parties developed adequate defence attache. The exchange of military delegations occurs with ceratin regularity. Caracas has bought in China four JYL 3-D radars to monitor its airspace (150 million dollars) and it is likely that they would acquire new modules in the short term. Also 24 training fighters K-8 Karakorum domestically manufactured for its air force. (13) These aircrafts, built with technology acquired in Pakistan may face combat and recognition missions. According to Chavez, these acquisitions are intended to strengthen the defence capability of Venezuela to the U.S. refusal to sell them spare parts. Notwithstanding, although it may satisfy part of their armament needs in China, the Russian arms market on China's raw and it seems that the latter seeks not to excel in this area. In addition, Chinese military are participating in training activities in Venezuela, as in other countries in the region. China has participated in the last two parades on July 5, a national holiday. In the one hold in 2011, the Chinese contingent monopolized the front page of China Daily. The military industry collaboration gains weight on the bilateral agenda.

Other exchanges

It is well noted the increasing intensification of exchanges and visits in the areas of ​​culture, education and tourism. Since the agreement for cultural cooperation from 1981 to today, these relationships have evolved particularly intense. The visits of sets of opera, acrobatics, martial arts or dance and song to Venezuela are complemented by similar efforts by the other party. The exchange of students, or civil servants of the respective departments of Foreign Affairs has also been formalized. Moreover, sports exchanges are also included in the scope of their relationship with a specific plan of cooperation.

Complex relationships

For Venezuela, bilateral relations with China are an example of South-South cooperation and of its potential. This was stated by Chavez himself in one of his Alo Presidente programs (Sunday August 17, 2008) which was attended by the then Chinese Ambassador to Caracas Zhang Tuo.

In the Hu Jintao visit to Peru in November 2008, listed the range of fields in which China and Latin America could cooperate. In all these domains, there is now cooperation between Beijing and Caracas, offering the most diversified pattern of relationships and complete of all the countries of the region.

The strategic alliance between the two countries is based on the principles of planning, gradual, mutual benefit, transparency, technology, and human resources training. In developing this relationship the leading public sector has a relevant role, what adds capacity to their accurate relationship, however very dependent on political whims.

Moreover, this alliance would stage the union of two large regions in the context of a strategy to unite the world's emerging poles. To Caracas, the approach to China is part and parcel of a foreign policy with regard to other countries and regions such as Russia, Belarus, India, Africa, Middle East and the Arab world. This coordination ambitions a multipolar world without imperial hegemonies, and reserves a special significance to Venezuela as a middle power. In the geopolitical arena, Chavez is developed so perhaps debatable, but following a logical and coherent balance, for the moment, clearly favourable to Caracas, at least in economic matters and international projection.

Despite China's efforts to limit to the "pragmatic" its relations with Venezuela, the truth is that these, like those held in Cuba (and even Brazil) have an important political and strategic significance. Venezuela sees in China this political ally that can serve as a counterweight to Washington, as to who they want to reduce dependencies. Chavez has developed a manifestly proactive policy in relation to Beijing. However, politically, Beijing is careful to be drawn into anti-American proclamations of Venezuelan President keeping their distance so as not to damage the special relationship they want to keep with the U.S.. In April 2009, the last time Chavez visited Beijing, the official information about his stay was distributed only once the illustrious visitor left the Chinese capital, one way to avoid becoming a speaker of their allegations against imperialism and to reduce the overall projection of his stay.

On the other hand, in strictly economic terms, the characteristics of the Venezuelan oil (heavy and expensive for the technical difficulties of refining), advises moderation to China, even taking into account the unpredictability of the decisions of Chavez, who is now in line with Beijing, in other circumstances could seriously damage their interests. China is aware of the political uncertainty that accompanies the Venezuelan institutional life. This would also explain the caution in investment because of the difficulties experienced by other countries (Japan, Spain, Mexico or Argentina). It cannot be overlooked that these relationships are an issue that faces the opposition to Chavez. This equates with the cheap Chinese goods that are of poor quality and do not perform well. The sudden changes to the policy set out in Venezuela and the insecurity prevailing in the China business world require extreme care.

Caracas, however, aspires to raise the level of the strategic partnership and expand its content, based on the belief that China is a natural ally of Venezuela, as it was pointed out on numerous occasions its active ambassador to Beijing, Rocio Maneiro.

Conclusion

The political harmony, the potential and the complementarity are the main reasons that have contributed to strengthening the Sino-Venezuelan relations. Today, Venezuela is amidst the five trading partners of China in Latin America with a trade surplus. Brazil (the main challenge of China in Latin America), Mexico, Chile and Peru precede it. However of them all, Venezuela is the one offering a more balanced structure.

It is equally true that the two governments attach great importance to this relationship, especially from Venezuela. No other head of government of the region equals the number the Chavez official visits to China. On the other hand, Venezuela has natural resources that China needs (now imports more than 50 percent of its oil) and a market of almost 30 million inhabitants with a relatively large purchasing power that is of great interest to the Asian giant. The lack of competition in the order of production, feed many expectations to develop future projects. China can contribute to Venezuela with technology, human resources and possibilities of cooperation.

Albeit in these exchanges the political factor is present, especially on the Venezuelan side, the economy is the main meeting point, which sets the direction and intensity of these relationships. Indeed, in Venezuela, China does not find the political objections that have been seen in Canada (when China wanted to acquire Noranda Minimetals) or in the U.S. (when CNOOC was able to buy UNOCAL) and can develop their business without creating any direct threat or fear preventive disincentive.

Developing economic relations with China is particularly attractive to Chavez for two main reasons. First, the rapidly industrializing China has provided a high growth economy and major financial capital endowments. This is compounded by its energy needs, which could increase by 150 percent by 2020. Caracas expects to benefit from this increase of demand. Second, the fact that China does not hold political or moral imperatives in its trade relations. China also has no history of intervention in the Western Hemisphere, and assumes no messianic vocation of advocating a particular political system. China's foreign policy promotes a stress-free environment, which considers essential to develop their businesses and investments.

For China, the relations with Venezuela are interested, primarily, on the energy dimension that complements broader agreements in other areas such as technology, agriculture, military, infrastructure, etc. It is supported primarily through loans made by China to Venezuela, which is terribly accentuated by the Chavez dependence for the support of the revolution, but it also determines and mortgages future generations because their payments are tied to future deliveries of oil. (14)

For geopolitical relations Venezuela is interested not only in the market diversification but also to incorporate the ideological element of the revolution to stop the movement to achieve U.S. and Western markets its traditional customer base. These relationships also attempt to sustain the level of social spending and the gifts of the Bolivarian revolution, the backbone of this process.

China, as stated, craves energy resources and raw materials however it avoids reliance on a single partner to meet the demand. Chinese oil companies contend agreements in Africa, Central Asia, South America, and so on. Venezuela is one of its petrol partners and as in other cases, attempts to project an overall strategy. Not only imports oil but is injecting capital as direct investment in areas that are of interest and areas of interest of the Venezuelan government, providing technical advice and putting their own products.

China, on the other hand, is the key that can open the Asian energy market to the Venezuelan oil, which aspires to reduce its dependence on other markets, particularly the U.S. Chavez's threats on the blockade of U.S. crude supplies are known, though hardly deliverables: Venezuela, the largest oil exporter in Latin America, still sells 60% of its crude to Washington. However, the diversification of customer base is a strategic imperative. And Beijing does not frown the diversification of its oil imports (15).

Chavez says the alliance with China has "the strength of the great wall", though the distance separating them is a major handicap for China to become the main destination of its oil. However, in the Miraflores Palace it is wanted to accelerate the pace, as noted by Chavez during his visit to China in April 2009, putting more investment, more effort and more technology.

Multilateralism and the Third World are central elements in the speech of China's diplomacy and does not seem to want to let go despite his peculiar situation, with a global positioning is the vivid contrast of their own internal situation (one of the largest economies in the world but with strong regional imbalances). Albeit China now advocates the presence in all kinds of forums under his pragmatism, noted that dispersion of power that characterizes current international society and claiming new standards erode global unipolar power. This ubiquity allows you to advance the agenda of developing countries in all instances, leading de facto the demands of this group of states.

While the U.S. has historically been erecting a bastion of democracy and human rights, China has lacked outstanding experiences in this area, making it easier for a business partner with respect to the U.S. and Europe. His business interests take precedence over any other consideration. (16)

China and Venezuela maintain a relationship of great economic incentives that becomes risky. China benefits greatly from business with Venezuela because they get access to oil and its derivatives, it is enriched by reselling their oil at prices well above the one negotiated with PDVSA, features their products in the Venezuelan market and additionally accomplished stealthily and cautiously political counterbalance the region that gives him an important meeting their interests.

Conceivably, Venezuela, because of oil is an important partner of China in the region. The economic and trade exchange continue to grow in the coming years. If Chavez has enough time, China's presence in Venezuela may acquire a meaning very prominent in the productive order. However, Beijing, thinking in the long term, cannot imagine this country as a lever that allows to weaken the U.S. influence as a regional power, authority and accountability to a certain extent that they recognize de facto (17). However, concerns in the State Department and mutual rivalry for the significance and importance of this presence, not only in Venezuela but throughout the region will increase.

Apart from China's strategic economic interests in commodities markets and the Venezuela market, the PRC is also interested in the survival of Venezuela as a populist regime, provided that the relationship between China and Venezuela does not undermine their relationship with the United States that is more important in strategic terms. Although China's diplomacy actively trying to suggest measures to avoid any confrontation with the U.S., the Bolivarian project of the Chavez regime, for its declared hostility to Washington, strategically benefit the PRC. From the political point of view, the attempts by Chavez to challenge the dominance of U.S., the neoliberal capitalism and the Western companies in the region create spaces in which China can improve positions and gain influence.

 

QUOTES

(1) Ministry of Popular Power for Foreign Affairs. Agreements signed between the Bolivarian Republic of Venezuela and the People´s Republic of China. http://www.venezuela.org.cn/coopera/ACUERDOS_SUS.pdf (Con acceso el 29 de octubre de 2011).
(2) Xinhua, July 5, 2009. Intervention Xaolin Li, Li Peng´s daughter, Vice President of the Association of Chinese People's Friendship with Foreign Countries at the reception to celebrate the 35th anniversary of diplomatic relations between China and Venezuela.
(3) Elnacional.com. "Petrolera PDVSA China will work with Junin blocks 1 and 8 of the Orinoco Belt." Available at: http://www.el-nacional.com/www/site/p_contenido.php?q=nodo/169393/Econom%C3%ADa/Petrolera-china-explotar%C3%A1-junto-a-PDVSA-bloques-Jun%C3%ADn-1-y-8-de-la-Faja-del-Orinoco. (Con acceso el 05 de octubre de 2011).
(4) Prensa Latina, April 6, 2009.
(5) El Universal, September 18, 2011
(6) Venezuela benefits from complementary cooperation with China, Xinhua, October 28, 2011.
(7)  Global Asia. "China and Venezuela sign agreement to port project." Available at http://www.globalasia.es/index.php?option=com_content&view=article&id=2098%3Achina-y-venezuela-firman-convenio-para-proyecto-portuario&catid=7%3Anoticias-empresa&Itemid=10&lang=es. (Con acceso el 29 de octubre de 2011).
(8) Venezuela-China, 35 years of diplomatic relations. Publication of the Embassy of Venezuela in Beijing in July 2009.
(9) Bolivarian News Agency, April 8, 2009.
(10)Xinhua, October 23, 2009.
(11) ELLIS, E. (2010). "Venezuela's relationship with China. Implications for the Chavez regime and the region. " Available at http://www.airpower.au.af.mil/apjinternational/apj-s/2010/2010-3/2010_03_03_ellis_s.pdf. (Con acceso: 22 de octubre de 2011)
(12) Prensa Latina, September 25, 2008.
(13) ElUniversal.com. "Venezuelan Air Force receives first 6 Chinese fighter aircraft K-8W." Available at http://www.eluniversal.com/2010/03/13/pol_ava_aviacion-recibe-prim_13A3578851.shtml. (Con acceso el 31 de octubre de 2011).
(14) Rada Hernandez, Silvia, Venezuela and China´s  economic relations in the regime of Hugo Chavez (1999-2011), in http://www.eumed.net/rev/china/15/shr.pdf (con acceso el 29.10.11).
(15) Wenran, Jiang, China Quest for Energy Security, en China Brief vol. 4 nº 20, 14/10/2004.
(16) China Looks to Venezuela for Energy Security, http://www.worldpress.org/Americas/3820.cfm#down, Lauren Paverman, October 11, 2011.
(17) Rios, Xulio, China, To the conquest of Latin America, Spanish-language Le Monde Diplomatique, No. 159, January 2009.

 

Xulio Ríos, is director of China Policy Observatory.

 
 
 
09/12/2011 (c) Igadi, Instituto Galego de Análise e Documentación Internacional, www.igadi.org
http://www.igadi.org/china/2011/xr_taiwan__al_ritmo_de_china.htm