Venezuelan President Nicolas Maduro has returned to Caracas Monday after a four-day visit to China pocketing a new US $5 billion loan and a dream of “taking the first steps into a new economic era”.
One of the highlights of Maduro’s visit was to bow three times to the preserved body of Mao Zedong at the massive mausoleum in the capital, calling the founder of Communist China a “giant of the homeland of humanity”.
“We are beginning this state visit in the best way because we have come to pay tribute to the great helmsman Mao Zedong,” Maduro said on Friday, “I was very moved because it really reminds of one of the great founders of a multipolar 21st century.”
While foreign leaders normally shy away from visiting the mausoleum of Mao, a tyrant responsible for the death of millions of Chinese during the Great Leap Forward and the Cultural Revolution between 1949 and 1976, Maduro acts against the law of heavens in China as a beggar hungry for an alliance with the Communist regime.
Two decades of socialist rule and mismanagement mainly by the late President Hugo Chavez who launched the socialist revolution has brought the country to the edge of collapse. The once-wealthy oil nation is now gripped by a historic crisis that is hard to turn around.
Maduro said Tuesday that new investments from China will help his country dramatically boost its oil production, as it nearly doubles its oil exports to China. “Under the deal, Venezuela will increase production and the daily export of oil to China to 1 million barrels a day,” Maduro said.
“We are on track to have a new economy, and the agreements with China will strengthen it”, he added.
However, China is taking a strong role in its new agreements. Over the last decade China has given Venezuela $65 billion in loans, cash and investment. Venezuela owes more than $20 billion, according to Financial Post.
Russ Dallen, a Miami-based partner at brokerage Caracas Capital Markets, said the influx of money appears to be investments China will control.
“The Chinese are reluctant to throw good money after bad,” Dallen said. “They do want to get paid back. The only way they can get paid back is to get Venezuela’s production back up.”
Earlier Adrian Lara, Senior Oil and Gas Analyst at GlobalData, a leading data and analytics company, commented, “Financial support to keep the Maduro regime alive will certainly come at an increasingly high cost for Venezuela in the form of loss of autonomy from Petróleos de Venezuela, S.A (PDVSA) to develop, operate and export oil and gas production from its own fields. Chinese and Russian companies, backed by their governments, have taken the lead as being the lenders of last resort but mainly for reasons that go beyond a short-term business investment rationale. However, the risk exposure in Venezuela continues to increase and Chinese and Russian governments won’t give anything for free.”
Still Maduro was happy when he and Chinese Foreign Minister Wang Yi last Friday oversaw the signing of 28 deals in energy, mining, gold, iron, technology, education, health, and culture, and that also include China’s helping Venezuela to build the newest satellite.
The new funding will provide some much-needed breathing room for the Maduro government and is due to be channeled into numerous mixed firms in the Orinoco Belt with the aim of opening or upgrading 300 oil wells specifically in the 500 sq km Ayacucho Block 6 section of the Belt containing 31.2 billion barrels of heavy crude, according to Venezuela Analysis.
Venezuela also agreed to sell 9.9 per cent of shares of the joint venture Sinovensa, giving a Chinese oil company a 49 per cent stake. The sale will expand exploitation of gas in Venezuela, Maduro said.
Now the ties between the two nations seem to be as “strong as the Great Wall”, as Chinese Foreign Minister Wang Yi put it. And Venezuela is now actively joining Beijing’s New Silk Road Initiative.
This is in tune with what Chinese Vice President Wang Qishan just said that “China is ready to work with Venezuela to safeguard the interest of developing countries and the future of humanity, “as he met with Vice President of Venezuela Delcy Rodriguez in Beijing on September 12th.
President Xi Jinping said during his meeting with Maduro, “Chinais willing to strengthen exchanges of experience in governing the country and politics with Venezuela.”
Maduro said on Tuesday he could count on China as an ally to survive an “economic war” and he accuses the United States of waging against Venezuela. U.S. President Donald Trump’s administration has levied several rounds of sanctions on Maduro’s government.
“I have had to overcome economic sanction measures by the US and Europe, who persecute Venezuelan bank accounts, kidnap billions of dollars in international accounts and block commerce,” Maduro told Chinese state CCTV.
At a time when the US government imposed sanctions on China’s tech-giant ZTE, Venezuela signed an agreement with ZTE who already has a significant market share in Latin America. Equally, the Chinese medical firm Meheco signed an agreement with Maduro’s government to sell vital medical supplies to his country, which has struggled to access crucial drugs such as insulin and anti-retroviral medication in part due to US financial sanctions.
With further agreements with application in crime fighting, Beijing does not actually have the heart to rebuild Venezuela that is projecting a massive one million percent inflation rate by the end of 2018 and still a deepening financial crisis.
Little is known about a Chinese community of more than 50 thousand residents in Venezuela. They came from a small city Enping in Southern Guangdong province and many of them have lived for over three generations as migrants pursuing a better life in the Latin American country. Last year as a result of extreme economic difficulties, most of them have fled the devastated country with “broken dreams”.
History may play again for a second round of Chinese dreamers in the harsh land under socialist rule.
By Cloudy Seagail