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China Talks With Venezuela Opposition to Protect Investments



CARACAS, Venezuela-China held talks with Venezuelan political opposition to safeguard its investments in the troubled Latin American nation, protecting its bets from the pressure exerted on Nicolás Maduro, the fighting leader for whom Beijing was an ally vital [19659002] "China recognizes the growing risk of regime change and does not want to be on the negative side of a new regime," said R. Evan Ellis, Chinese relations expert in Latin America at the US Army War College. "While they prefer stability, they realize they have to put eggs in the other basket."

  Venezuelan President Nicolás Maduro has resisted pressure at home and abroad to cede power to Guaido.

Venezuelan President Nicolás Maduro has resisted pressure at home and abroad to cede power to Guaido.


Photo:

stringer / Reuters

The talks are a sign of the construction of apprehension with the creditors of the Left Government of Venezuela. Over the past two decades, oil loans treated with China and Russia have provided vital support for Venezuela. Relationships flourished under the predecessor of Maduro, the late socialist Hugo Chávez, who fortified ties with those countries, Cuba, Iran and even India in an attempt to combat US power.

But the commercial and financial ties with these countries have been tense since Mr. Maduro, the successor selected by Chávez, took power in 2013 and the economy began to shrink, with oil production precipitating over half after years of rampant grafting and mismanagement.

The sanctions sanctioned by Washington last month on the Venezuelan oil industry have exacerbated Mr. Maduro's difficulties, cutting Venezuela's only significant source of income and foreshadowing further declines in oil production.

The Chinese Foreign Ministry has not responded to a request for comment on Beijing contacts with Venezuelan opposition. In recent weeks, the ministry has suggested that discussions are taking place and Beijing wants to see its interests respected.

Latin Venture

China has lent Venezuela more than $ 50 billion in exchange for oil supplies since 2007 but repayments have declined since President Maduro took office in 2013.

Imports of China from Venezuela

Exports of China to Venezuela

When asked about noisy talks during a press conference on February 1, Foreign Ministry spokesman Geng Shuang said that Beijing "is in close communication with all sides in various ways on the situation in Venezuela. "

" It does not matter how the situation evolves, "said Geng," China-Venezuela cooperation should not be compromised "

. Guaidó has publicly expanded the branches of China and Russia. The young head of the National Assembly, which the legislators chose to lead an interim presidency in a challenge to Maduro, argued that political change would be a precursor of economic reforms to restore stability.

Venezuela, which sits atop the world's largest oil reserves, should maintain ties with China, the world's largest oil importer, he said.

The fall of the Maduro government could work for the benefit of China, said Mr. Ellis. "Guaidó could help raise [U.S.] the sanctions and run oil back in. In the end, China has everything to gain from Guaidó," he said

. People familiar with debt repayment talks have said that there are significant obstacles. Venezuela has borrowed more than $ 50 billion from China in a series of oil lending agreements since 2007, and according to estimates by the Chinese trade ministry it still owes about $ 20 billion to Beijing.

China is unwilling to suffer significant losses on its loans, as some of the opposition economic advisors have suggested for creditors, including holders of the country's default bonds, according to two of the people familiar with the talks. Both sides discussed grace periods on repayment plans to make room for any potential Venezuelan transitional government, they said.

Opposition lawmakers also clamored to make the terms of China's lending agreements with Venezuela more transparent, according to Beijing to two of the people familiar with the negotiations.

  Monday Minister of Venezuela, Manuel Quevedo, center, in India, where his ministry said to look for buyers for Venezuelan oil.

The Minister of Venezuela, Manuel Quevedo, India Monday, where his ministry said he was looking for buyers for Venezuelan oil.


Photo:

anushree fadnavis / Reuters

Like China, Russia has publicly supported Maduro, but has shown little willingness to support the government with new funds. In recent years neither of the two allies has granted large loans to Venezuela. Their oil joint ventures in Venezuela have been subject to corruption and operational difficulties throughout the country's oil industry, said energy consultants.

A director of a company that supplies valves and pipes for oil fields to Chinese and Russian government companies operating in Venezuela said the company made only one sale throughout 2018. "The Chinese, the Russians, I do not really see them to give money, "said the director.

Moscow is open to dialogue with Guaidó Kremlin spokesman Dmitry Peskov suggested this month, saying that Russia expects to maintain cooperation with Caracas "regardless of political developments in the country."

Trump's sanctions are aimed at redirecting oil resources and revenues away from Mr. Maduro and in the hands of Mr. Guaidó, closing access to Venezuela's largest cash customers.

Venezuelan officials are looking for new buyers for their heavy oil, which until January could be refined in specially prepared American installations.

On Sunday, the Saudi oil company, Bahri, reported that one of its ships had traveled to Venezuela to load crude oil for one of the regular customers of Caracas in India. Bahri said the shipment would be completed before the end of a grace period set by US sanctions.

Monday, Venezuela's Venezuela Minister Manuel Quevedo was in New Delhi trying to increase sales in India, his ministry said.

But Indian officials say they have become impatient with Venezuela, which for several years has delayed the reimbursement of nearly $ 500 million due to the state oil company ONGC Videsh Ltd.

The Venezuelan government has also fallen behind with the Indian pharmaceutical companies that once thrived here, forcing many of them to move operations out of the country when the social and economic conditions have deteriorated.

"Individuals in India have little reason to do anything to increase imports in such a chaotic situation," said Smita Purushottam, former Indian ambassador to Venezuela, recently retired by the Foreign Ministry.

"My opinion is that the people of Venezuela are fighting for survival," she said. "They have suffered for too long and perhaps the only way to go is to start over, under international supervision, to minimize their suffering and rekindle hope."

Write to Kejal Vyas a kejal.vyas@wsj.com


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