Oil lubricates Beijing-Caracas relations

As its trade with Venezuela increases, China’s political influence in the Latin American country also grows, which may well serve both countries’ interests.

Venezuelan President Hugo Chavez’ visit to China this August accomplished two goals, the signing of oil and infrastructure agreements as well as getting China to support Venezuela in its bid for a United Nations Security Council seat. Although Venezuela lost that bid, Chavez’ visit showed the United States

that geopolitics and trade go hand in hand in the China-Venezuela “strategic alliance”.
Attracted by China’s investment power, many Latin American countries are seeking closer trade ties with China, which in turn seeks raw materials and new markets in which to flex its muscles. China’s trade with Latin America increased fivefold from 1994 to 2004, reaching an annual US$40 billion. A recent local news story estimated that Venezuela-China trade, having reached $2.1 billion in 2005, would hit $4 billion this year.

Yet the US remains Venezuela’s No 1 trade partner, purchasing 60% of Venezuelan oil exports. Trade with the US reached $40 billion last year, $34 billion of which was Venezuelan exports and overwhelmingly oil-based, according to the US State Department website. Venezuela wants to break that dependence and diversify its oil customers.

Asia Times