By Dan Calabrese ——Bio and Archives--September 14, 2018
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Venezuela was willing to “explore effective financing methods” with China and strengthen cooperation with China in the energy sector, media added, citing Maduro, without elaborating. Xi told Maduro the two countries should promote mutually beneficial cooperation to take relations to a new stage, and they should consolidate political mutual trust, state television said. China would, as before, support the Venezuelan government’s efforts to seek stability and development, Xi added.
Over a decade, China ploughed more than $50 billion into Venezuela through oil-for-loan agreements that helped China secure energy supplies for its fast-growing economy while bolstering an anti-U.S. ally in Latin America. The flow of cash halted nearly three years ago, however, when Venezuela asked for a change of payment terms amid falling oil prices and declining crude output that pushed its state-led economy into a hyperinflationary collapse. Venezuela’s finance ministry in July said it would receive $250 million from the China Development Bank to boost oil production but offered no details. Venezuela previously accepted a $5 billion loan from China for its oil sector but has yet to receive the entire amount.There comes a point where a creditor is simply out of its mind to keep floating loans to a debtor who never cleans its act up. China may like the idea of a strategic ally in this part of the world, and may have been willing to accept some losses to keep said ally in place. But you can’t keep that up forever. China is already burdened by the challenge of its increasingly insane “ally” in North Korea, and now it’s being asked to float bad loans to Venezuela even as the Maduro regimes proves itself incapable of righting its own ship.
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