China & Venezuela Oil Deal: Nations Make Agreement to Send $4 Billion Line of Credit to Venezuela; China Gets Oil in Exchange
In a recent stop on his news-making Latin American tour, Chinese President Xi Jinping signed a number of oil and mineral deals with Venezuela, according to a BBC report.
The biggest of the deals is a $4 billion line of credit from China to Venezuela in return for oil from the South American nation. China is the second-largest market for Venezuelan crude oil after the U.S.
Most of the 38 agreements are related to the production and growth of oil and agriculture in Venezuela, along with social and cultural expansion. China also is paying $691 million to explore Venezuela's gold and copper reserves, RT reported.
Political analysts are saying that China's purpose in its tour of Latin America is to secure natural resources from the region to assist in China's long-term economic goals.
China has become a big player in Latin America in recent years and is the second-biggest trading partner in Argentina and Cuba and has been Brazil's biggest partner for five years. In 1990, China was ranked 17th on a list of Latin American export destinations.
After leaving Venezuela, Xi's itinerary takes him to Cuba, where he is set to meet with President Raul Castro. Prior to this, Xi visited Argentina and Brazil and attended a summit of the BRICS nations.
At the BRICS summit, Xi, along with the leaders of Brazil, Russia, India and South Africa, announced a $100 billion development bank. During his visit to Brazil, Xi floated the idea of funding a transcontinental railroad in South America. He also agreed an $11 billion currency swap with Argentine President Cristina Fernandez de Kirchner.
As busy as he has been, analysts don't think Xi's deals were done solely out of the goodness of his heart. News reports say that China is maneuvering to gain greater influence in Latin America, to give the region a viable alternative to the U.S.
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