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China, Venezuela ties at 'highest level'

By ZHANG FAN in Sao Paulo | China Daily Latin America | Updated: 2014-09-29 06:56

The newly signed cooperation agreements between China and Venezuela concerning local infrastructure construction projects marks the "highest level" of cooperation between the two nations, Venezuelan President Nicolas Maduro said recently.

According to the agreements, signed on Sept 21 in the Venezuelan capital of Caracas, China will invest $2 billion to support Venezuela's Tricolor Neighborhood housing program. About 3 million families in Venezuela are expected to benefit from the investment.

"What we are signing here today is the start of an extraordinary and special plan for our Venezuelan nation and a big push all through 2015 to our final goal in 2019," Maduro said at the signing ceremony.

Maduro said more than 622,000 homes have already been built through the housing program and the figure is expected to reach 6 million by 2019 and provide homes for 25 million people, 80 percent of the country's labor force, local media reported.

The agreements also mapped out the installation of two special economic zones in the northeastern regions of Anzoategui and Puerto Cabello on the north coast of the country.

Earlier this month, Manuel Quevedo, president of the Tricolor Neighborhood program, visited Beijing to invite Chinese companies to participate in Venezuela's construction projects. According to a press release from the Venezuelan foreign ministry, he met with various businesses, including manufacturers of dry mortar, hand tools, windows and steel.

Chinese construction giant Sany Group intends to build a heavy machinery plant in Venezuela, according to the Venezuelan government. Sany will also build eight material factories, each with six production lines. CITIC Construction Corporation and JAC will also invest in Venezuela with factories and production lines.

"The agreements show that Venezuela is paying more attention to the infrastructure construction area, which is also one of China's advancing fields," said Zhou Xinyun, a professor of emerging economies at Beijing Foreign Studies University.

During Chinese President Xi Jinping's state visit to Venezuela in July, the two presidents signed 38 agreements, including a $4 billion loan in exchange for oil. The credit would be repaid by shipments of about 100,000 barrels per day of crude oil and products, Reuters reported.

The agreements also involve fields such as finance, the economy, science and technology and agriculture.

The relationship between China and Venezuela was also elevated to a comprehensive strategic partnership during Xi's visit. Since 2001, the two countries have signed 480 cooperation agreements.

China is now Venezuela's second-largest trading partner in the world, with a trade volume of $19.2 billion in 2013, following the US with $42 billion the same year.

China is also Venezuela's second-largest market for oil exports after the US. According to Venezuelan oil minister Rafael Ramirez, Venezuela is now supplying China with 626,000 barrels per day, after the US which purchases around 730,000 barrels.

China and Venezuela established the Joint Chinese-Venezuela Fund in 2001 which focuses on infrastructure and economic development. The Venezuelan government said in July that the fund had about $40 billion at the time. The latest figure is not available.

"I think the energy cooperation between China and Venezuela is still developing," said Zhou. "Such cooperation will deepen the mutual trust and expand to other fields such as roads and factories. The recent deals in infrastructure are a positive sign that the two countries are ready to bring their cooperation to the next level."

fanzhang@chinadailyusa.com

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