The South American country of Venezuela was once one of the most successful oil industries in the world, with a thriving economy. After oil prices dropped drastically in the 1980s, Venezuela has been searching for ways to recover their largest money-maker and restore their crippling economy.
China and Venezuela have been working together for over 15 years as part of the Mixed China-Venezuela High Commission. They are energy-supply partners that have signed 480 agreements together since 2001. As Venezuela has continued struggling economically, China has contributed efforts to help save the country’s economy. There are five development projects in Venezuela underway to do just that:
- China and Venezuela have signed a total of 22 new deals worth 2.7 billion U.S. dollars in order to stimulate economic development in Venezuela and strengthen their partnership. This development will include infrastructure, import and cargo transport projects. Six of the 22 agreements are focused on energy output and the oil industry.
- China has agreed to assist in the supply and export of Venezuela’s oil production. China will build a refinery in southeast China’s Guangdong Province, Nanhai which will process around 400,000 barrels of extra-heavy crude oil from Venezuela’s land. The mission of this project is to increase the amount of oil output and exports.
- Venezuela spent 9,576 million on imports in 2015. China and Venezuela have begun to build an industrial plant in Anaco, Venezuela whose purpose will be to produce seeds, fertilizers and agrochemicals that are normally imported to help reduce the amount of money spent on imports.
- China is also a major investor in Venezuela’s new food supply distribution network Local Supply and Production Committees (CLAP). Venezuela’s food supply has taken a major hit since the economy’s decline. The decline of the country’s food supply has reached a point of crisis where basic food needs are not obtainable. The CLAP project will work to get food to Venezuelan residents. In addition, CLAP will serve as a way to regulate food distribution from house to house in order to ensure a proper amount of food for each family. CLAP representatives carry essential food and products to households. This system is meant to prioritize the needs of families and has already made deliveries to 504,000 families.
- Venezuela has launched a mining project called Arco Minero del Orinoco. Companies in China will be involved in the project. Two of the groups working with this project are China CAMC Engineering Co. and the Yankuang Group. Arco Minero is located in the northern part of Venezuela and is a prime spot for mining gold, diamonds, coltan, copper, iron and bauxite. The exploitation of these minerals will be a stepping stone in the quantification and certification of mineral reserves. As a result, mining will be a more widespread way to raise exports.
China has provided massive assistance to Venezuela over the years in an effort to help the country’s economy. With this new set of agreements, the trade partners will work together to make Venezuela’s economy more prominent. These five development projects in Venezuela are a start in the strengthening of Venezuela’s oil industry, economy and relationship with China.
– Brianna Summ