by Gustavo Coronel
Added to cato.org on October 10, 2011
This article appeared in The Latin American Herald Tribune on October 10, 2011.
China is already Venezuela’s second main commercial partner and Chavez has made all efforts to tie his regime to China, what could be called the CHI-CHA connection. He has obtained from China significant amounts of cash, promises of more money to come and technical assistance, amounting to some $80 billion in the last four years.
The breakdown is as follows: $32 billion in loans, some in dollars, some in yen, not all delivered in cash; financing of $4 billion in weapons and airplanes; a promise by the Chinese to invest $40 billion in the heavy oil deposits of the Orinoco river region (not yet materialized) and some $4 billion in technical assistance in railroad, port and housing construction, as well as mining, agriculture and space technology.
Gustavo Coronel was author of the Cato Institute study “Corruption, Mismanagement and Abuse of Power in Hugo Chavez’s Venezuela.”
An excellent paper by Evan Ellis (“China’s cautious Economic and Strategic Gamble in Venezuela”, China Brief, Volume XI, September 2011), states that the association with China has given Chavez much needed money, without the need to be transparent on how he manages it.
Predictably, the Chinese have increasingly demanded that Chavez acquire their products and services. Some 300,000 Chinese made electrical appliances, iceboxes and the like have been bought. Other contracts include the construction of 26,000 houses with Chinese company CITIC, a $7.5 billion railroad construction project, some $470 million in mining projects, the acquisition of commercial and military aircraft, a $500 million artificial satellite and radar equipment. According to Ellis the number of joint projects nears 140.