The Venezuelan government recently confirmed that the country will further expand its oil exports to China. Venezuela President Nicolas Maduro confirmed this on Tuesday following his visit to the Asian superpower. It is said that Venezuela will bump its oil exports to one million barrels per day.
China and Venezuela both confirmed that the two countries will improve their economic outlets. It is reported that the two countries will invest "around five billion dollars" in a project which is expected to be finished by August 2019. Prior to the recent improvements in terms of trade relations between China and Venezuela, the latter exports around 700,000 barrels of oil per day.
Last week, President Maduro spent two days as an official state visit to China where he was warmly welcomed by the country's top leader, President Xi Jinping. President Maduro attended meetings which were primarily focused towards development and the oil export. He reportedly attends meetings at the China National Petroleum Corporation and the China Development Bank.
Prior to the recent developments, Venezuela has already received more than $60 billion from China in a span of the last ten year. However, the country still owes China close to $20 billion. Venezuela has been repaying this debt through oil shipments. Many analysts believe that Venezuela should be able to zero out its credit soon now that the country decided to double its oil exports to China.
China and Venezuela have had a very positive diplomatic and economic relations. In 2016, when the South American country was marred by massive economic stagnation, China eased debt repayment conditions in order to somehow offset the negative repercussions of the crisis.
Based on a post on Twitter, President Maduro said that both his country and China signed 28 agreements during his two-day trip. These agreements will add to the current development project which is estimated to be around 700 and covers several fields and industries.
In recent years, Venezuela's economy has severely suffered from massive inflation rates. According to the International Monetary Fund, this year's inflation rate will hit a historic one million percent.
As a result of this economic problem, the public has suffered from major food and medical shortages. Moreover, public services like electricity, transportation, and water have been severely affected. As of this writing, millions of Venezuelans have fled the country.
Venezuela's current economic problem started during the 2014 oil price crash. Oil export accounts for 96 percent of the country's revenue. The oil price crash caused massive shortages in foreign capital, a problem which the country tried to solve by printing more money.
