Venezuelan President Nicolas Maduro (R) shakes hands with China's President Xi Jinping during a signing-of-agreements ceremony, in Caracas on July 21, 2014. (AFP Photo / Leo Ramirez)
Chinese President Xi Jinping has signed a row of oil and mineral deals with Venezuela. The Chinese leader is on a four-country tour of Latin America aimed to increasing influence in the region.
The 38 economic agreements are related to the production and development of Venezuelan oil and agriculture, as well as social and cultural expansion, says the BBC. The deals provides a credit line of $4 billion in return for Venezuelan oil and oil products, as well as allocating $691 million to explore Venezuela's gold and copper reserves, and an agreement to develop the countries' third jointly-owned satellite.
China is the second-largest market for Venezuelan oil after the United States.
The underlying purpose of the visit has been to secure more natural resources from Latin America to fuel China's long term economic expansion, BBC cites analysts. The Venezuela negotiations were preceded by visits to Brazil and Argentina.
At the BRICS summit in Brazil the Chinese leader, along with the other emerging powers Brazil, Russia, India and South Africa, launched a $100 billion BRICS Development Bank and a reserve currency pool worth over another $100 billion. Both will counter the influence of Western-based lending institutions and the dollar.
The next stop was Argentina where President Xi Jinping agreed an $11 billion currency swap and extended much-needed investment to President Cristina Kirchner. Argentina’s economy has been locked out of the international capital markets since defaulting on its debt in 2001, and is staring down the possibility of another default.
After Venezuela the Chinese leader arrived in Cuba on Tuesday where he is meeting President Raul Castro on the last stop of his four-country visit to Latin America.
Xi Jinping hopes to expand political and economic ties in the other communist nation. The island has had close political ties with China for decades, and was granted generous trade credits in the past.
Chinese trade with Latin America has grown rapidly reaching $261.6 billion in 2013. It is now the second-largest trading partner in Argentina and Cuba, and has been Brazil's largest since 2009. To compare, in 1990 China was ranked 17th on the list of Latin American export destinations.