Venezuela's Debt to China Will Cripple The Country For Years To Come

Xi Jinping and Nicolás Maduro. (Venezuelan Ministry of Communications)

Christopher Balding, Foreign Policy: Venezuela’s Road to Disaster Is Littered With Chinese Cash

Politicized loans left the socialist South American country trapped under a mountain of Chinese debt — but now others want to sign up for Beijing's "generosity."

The Venezuelan and Chinese economies seem like they could hardly have less in common. The Venezuelan government of Nicolás Maduro has looted the state-run oil company Petróleos de Venezuela (PDVSA) to pay for the “Bolivarian revolution,” the socialist movement begun under the late leader Hugo Chávez. With oil prices down, the country is unable even to repair rigs or pay workers to generate income, and the government now faces the prospect of a mass uprising. Meanwhile, half a globe away, China’s gleaming malls stand in stark contrast to Venezuela’s empty shelves.

But Venezuela’s ruinous state has more to do with China than one might think — specifically, with Chinese President Xi Jinping’s plan for expanding China’s global influence through financial diplomacy. Venezuela’s collapse is about to serve as an object lesson on that plan’s high costs for China’s erstwhile partners — and ultimately for China itself.

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WNU Editor: Venezuela is not in a position to pay the interest on these debts, let alone the principle. But China wants to be paid .... so they are now picking at the carcass .... China Will No Longer Financially Support Venezuela (March 31, 2018). This is a classic example on what happens when governments borrow money with no vision on how they will pay it. Unfortunately .... as most of us know .... governments always ignore warnings when it comes to borrowing money and how it should be paid back.