Chinese markets open on Sundays in big cities around Venezuela, including this one at the Chinese Social Club in Caracas. PHOTO: MIGUEL GUTIERREZ FOR THE WALL STREET JOURNAL
Wall Street Journal: China Rethinks Its Alliance With Reeling Venezuela
Concerns about debt repayment and safety of expatriates prompt emergency meetings between Chinese envoy and state companies
CARACAS—China spent much of the last decade building a strategic alliance with Venezuela, a country that sits atop the world’s largest oil reserves and was led by a socialist president, the late Hugo Chávez, who admired Mao Zedong and wanted to counter U.S. influence in Latin America.
These days, confronted with a pile of unpaid bills and increasing security headaches for its citizens and companies in Venezuela, China appears to be recalculating its alliance with the nation where it has made about $60 billion in loans.
As a result, Venezuela may not get meaningful fresh loans or investment from China, raising the possibility of deeper cutbacks and shortages in the oil-rich nation or a default on more than $110 billion in government and state-oil-company bonds.
China’s envoy in Caracas conveyed concerns over security and Venezuela’s debt repayment during emergency meetings held between April and June with dozens of representatives from Chinese state companies, according to four officials from Chinese companies.
“The consensus was that no new money was going to be invested,” said one of the officials. “There was a clear message from up top: Let them fall,” said the official. He said Chinese companies were moving employees to Colombia and Panama for personal-safety reasons and because many Chinese-led projects have ground to a halt.
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WNU Editor: China is one of Venezuela's remaining financial life-lines. If China goes .... the outcome all but guarantees a complete financial collapse of the country. In the meantime, the chaos in Venezuela continues .... More Anti-Government Protests Coming In Venezuela; Turning Point Can Be 'Explosive' (Forbes).