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Xi reaffirms commitment of assistance for Venezuela

By Zhao Shengnan (China Daily) Updated: 2015-01-08 06:54

Xi reaffirms commitment of assistance for Venezuela

President Xi Jinping (2nd R) and his wife Peng Liyuan (1st R) pose for photo with Venezuelan President Nicolas Maduro Moros (2nd L) and his wife before their meeting in Beijing, Jan 7, 2015. [Photo/Xinhua]

Numerous agreements made before start of first Latin American ministers' forum, which opens on Thursday

President Xi Jinping voiced his resolve to back Venezuela, whose economy is reeling from tumbling oil prices, when he met with Venezuela's President Nicolas Maduro on Wednesday in Beijing.

The meeting was one of several between Xi and Latin American leaders that yielded a raft of agreements and pledges of closer ties between China and the region.

Those meetings preceded the first ministerial forum between China and the Community of Latin American and Caribbean States, which was set to open on Thursday.

China's financial support will help countries like Venezuela to overhaul their oil-dependent economies, which have been hit by a steep decline in the price of crude oil. It will also nurture markets for China, analysts said.

"China supports Venezuela's efforts in restructuring its economy and places great emphasis on manufacturing", Xi said. He called for closer cooperation in oil development, infrastructure and technological innovation.

Both countries should take better advantage of the China-Venezuela High-Level Mixed Committee and financing systems, allowing funds to target energy, mining, agriculture and industry sectors, Xi said.

The committee is a key mechanism for both governments to engage in cooperation, including the oil-for-loan agreements under which oil and fuel shipments have been used to repay debts.

China is Venezuela's second-largest trading partner and oil customer and has already agreed to billions of dollars in loans for Venezuela.

There was no immediate information about whether Beijing has promised additional loans to the country.

Venezuela, which is estimated to have the world's largest oil reserves and gets 96 percent of its foreign currency from oil exports, confirmed last week that it has entered a recession.

High inflation and shortages of basic goods have spread pessimism about the ability of Caracas to meet debt obligations as oil prices have hit five-and-a-half-year lows, shrinking government revenue.

Wu Baiyi, head of the Institution of Latin American Studies at the Chinese Academy of Social Sciences, said Beijing is likely to offer more loans to Caracas during Maduro's visit as their partnership allows China to lend support at a critical time.

"But China would like Caracas to spend the funds in the most needed areas instead of just solving today's emergency, and that means developing a more sustainable, high-quality economy," Wu said.

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