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Venezuela's Maduro says secures over $20 billion investment from China

Published 07/01/2015, 18:39
Updated 07/01/2015, 18:40
© Reuters. Venezuela's President Maduro walks with China's President Xi as they arrive for a welcome ceremony at the Great Hall of the People in Beijing

CARACAS (Reuters) - President Nicolas Maduro said on Wednesday he had secured a total of more than $20 billion (13 billion pounds) in investment from major creditor China for economic, social, and oil-related projects.

It was unclear if part of the announced investments include new loans for the cash-strapped OPEC member, or if the investments were part of an existing oil-for-loans deal between Venezuela and China.

"We have wrapped up over $20 billion in investments during the course of this day's work," Maduro said in comments from Beijing broadcast on Venezuelan state television after a meeting with Chinese President Xi Jinping.

Venezuela is desperate for hard currency in the face of a recession, the highest inflation in the Americas, and falling oil prices. China has already provided billions of dollars in loans that are repaid through oil and fuel shipments.

Maduro also said Venezuela was strengthening ties with Chinese banks and that financing for development, the Chinese-Venezuelan fund, the Large Volume fund and "other mechanisms" were set to be approved in the first half of the year, without providing further details.

He said China would also increase its stakes and investments in the Venezuela's oil sector and the Orinoco oil belt, but did not provide further information on that either.

Urging unity within OPEC and cooperation with non-OPEC nations such as Russia and Mexico, Maduro repeated earlier statements that he believed oil prices would rebound "sooner or later."

Increased funds would likely improve Venezuela's cash flow this year, when state spending is likely to increase in the run-up to parliamentary elections.

That said, economists are urging far deeper changes to end the crisis, including unifying Venezuela's Byzantine currency controls and increasing the price of what is the world's cheapest gasoline.

Maduro has so far appeared unwilling to implement the crucial but unpopular measures, as his approval ratings drop.

© Reuters. Venezuela's President Maduro walks with China's President Xi as they arrive for a welcome ceremony at the Great Hall of the People in Beijing

He promised economic announcements after the New Year's holiday but then left for a trip to Russia, China and OPEC members. Finance Minister Rodolfo Marco later said measures would be unveiled once he and Maduro return to Caracas.

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