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China to invest $20 bn in struggling Venezuela: President Maduro

The sweeping investment deal covers a wide range of areas including technology, housing and urban planning

AFP/PTI  |  Caracas 

Nicolas Maduro
Nicolas Maduro

has agreed to more than $20 billion in investments in economically struggling Venezuela, the South American nation's president has said 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, yesterday.

He did not say whether new loans from were included in that figure, or whether it included previously announced deals.

Xi said that China, the world's second-biggest which has been bolstering its diplomatic and economic reach in South America - had agreed to "strengthened cooperation."

The sweeping 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.

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 where annual inflation tops more than 60%.

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 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 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% 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 since Maduro's predecessor Hugo Chavez came to power in 1999.

Beijing has extended $42 billion in long-term loans to Venezuela, $24 billion of which has been paid out so far, according to Venezuelan officials.

Maduro's government wants Beijing to increase its oil purchases from 640,000 barrels to one million barrels a day in the coming years and expand bilateral trade, which reached $20 billion in 2012.

First Published: Thu, January 08 2015. 03:45 IST
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