China’s Xi signs Venezuela resource deals on LatAm blitz

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Chinese President Xi Jinping signed a raft of oil and mineral deals with Venezuela on Monday (July 21), his latest stop on a Latin American tour showcasing China’s growing influence in the region.

During his four-country visit to what is often considered America’s back yard, Xi has reached out to resource-rich countries such as Venezuela and Argentina at a time when they are often shunned by the United States and Europe.

In Venezuela, he visited the mausoleum holding late president Hugo Chavez, an inveterate antagonist of the US, and signed 38 deals with Chavez’s successor, Nicolas Maduro.

The deals spanned a range of sectors from oil to infrastructure and included $4 billion for a joint development fund, US$691 million to explore Venezuela’s gold and copper reserves and an agreement to develop the countries’ third joint satellite.

“Venezuela has become one of the top countries for Chinese investment… our seventh oil supplier and fourth Latin American trade partner,” Xi said in Caracas.

The Venezuela visit comes after the Chinese leader agreed to an US$11-billion currency swap with Argentina and extended much-needed investment to President Cristina Kirchner, whose cash-strapped government, locked out of capital markets since defaulting on its debt in 2001, is staring down the threat of another default.

Xi kicked off his tour last week by proposing a new US$20-billion infrastructure fund for Latin America, underlining the fast-growing Asian giant’s increasing interest in the region.

He also launched a new US$50-billon development bank along with the other emerging powers of the so-called BRICS group – Brazil, Russia, India and South Africa – at a summit in Brazil.

The move, which creates an alternative to the Western-dominated World Bank, was hailed as contributing to “a new international order” by Cuban President Raul Castro – Xi’s host at the next and final stop on his tour.

But although Xi has spent his trip rubbing elbows with leftist leaders who tend to view the United States with a critical eye, his tour is less about ideology than business, said Venezuelan political analyst Carlos Romero.

“China’s political and economic expansion is pragmatic in character. It’s not about ideology or competition with the United States, but a Chinese policy of looking long-term for natural resources in different parts of the world,” he told AFP.

“China knows Argentina and Venezuela hold huge natural resource deposits, particularly two they are desperately searching for to fuel an economy and a society like China’s: oil and food in the case of Argentina, and oil and gas in the case of Venezuela.”

The partnership comes at a welcome time for Venezuela, which is in the midst of an inflation crisis and struggling under a pile of unpaid debts to foreign firms.

China, the second-largest market for Venezuelan oil after the United States, pays for its average 640,000 daily barrels in part by writing down the US$17-billion debt Caracas owes it.

Both countries have said they want to increase oil exports to one million barrels a day in the coming years.

Chinese trade with Latin America has grown rapidly in recent years, reaching US$261.6 billion in 2013. China is now the second-largest trading partner of many countries, including Argentina and Cuba, and has been Brazil’s largest since 2009.

In 1990, China ranked just 17th on the list of Latin American export destinations.

Beijing has also ramped up investment in Latin America to about 20 percent of its total foreign direct investment of US$90 billion last year.

This is Xi’s second visit to Latin America and the Caribbean since taking office in 2013. Last year he toured Mexico, Costa Rica and Trinidad and Tobago.

 

 

 

 

 

 

Source : Channel News Asia | July 22, 2014

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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