CARACAS (AFP) – China has agreed to more than $20 billion in investments in economically struggling Venezuela, the South American nation’s president Nicolas Maduro said Wednesday during a summit meeting in Beijing.
Maduro arrived on Tuesday in Beijing, where he has been meeting China’s President Xi Jinping, at a critical time for Venezuela, which is in the throes of financial crisis from falling oil prices.
“We scooped up more than $20 billion in investment,” Maduro told Venezuela’s official AVN news agency.
He did not say whether new loans from China were included in that figure, or whether it included previously announced investment deals.
Xi said that China, the world’s second-biggest economy which has been bolstering its diplomatic and economic reach in South America – had agreed to “strengthened cooperation.”
The sweeping investment deal covers a wide range of areas including technology, housing and urban planning, AVN said.
The meeting between the two leaders is their third, after talks in Beijing in September 2013 and another in Caracas last July.
China is Venezuela’s largest investor and the second-largest purchaser of its oil.
Caracas last week announced that it has entered recession, a heavy blow for an already beleaguered economy where annual inflation tops more than 60 per cent.
Plummeting global oil prices have caused additional distress for Venezuela, a member of OPEC that relies heavily on its oil revenue to keep its lumbering command economy afloat.
Oil has lost more than half its value since June 2014 owing to a glut in global supply and slowing growth in major world economies that has hurt demand.
Analysts have warned that socialist Venezuela is on the brink of a debt default, struggling to pay its bills while maintaining its lavish subsidies, oil discounts to allies and rigid system of foreign exchange controls.
Oil accounts for 96 per cent of Venezuela’s GDP, and the South American country is estimated to have the largest oil reserves in the world, but depends largely on imports for basic goods, including food and medicine.
China has been a key ally of Venezuela since Maduro’s predecessor Hugo Chavez came to power in 1999.