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China Sees Opportunity As Venezuela’s Oil Industry Hits Rock Bottom

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Venezuela’s near-collapse and strict U.S. sanctions are creating an opportunity for Russia, Iran and China to strengthen their presence in Latin America, a region that for decades has been under U.S. hegemony. While Russia and Iran have, to an extent, gained a foothold in Venezuela by providing crucial support to the embattled Maduro regime, it is China that stands to benefit the most if it can secure a close relationship with the socialist authoritarian regime.

No doubt China Sees Opportunity. However, the fact that opportunity can be seen doesn't mean it can be exploited.

China would have to, in some form or another, boot out the incumbent government and install someone who knows what they're doing. The US experience with such interventions (Chile, Nicaragua, Iraq, etc.) is to end up sponsoring monsters. China would end up replacing one ghastly regime with another ghastly regime.

Realistically, Venezuela's days in the oil business are numbered. At some point all that will be left is a leaky, polluted wasteland. China might try to set up some sort of colonial viceroyalty there with a puppet, but this presumes first that the CCP can field someone with enough knowledge of how things are done in South America to be able to set up a remote control government. China's 'diplomatic' maneuvers elsewhere have tended to drive countries into the arms of the US or other western interests. The best example of this is Myanmar/Burma, and the Sri Lanka experience suggests things are evolving the same way there.

China has repeatedly promised other countries favors (usually in exchange for UN votes regarding Taiwan) without following through. Plenty of Chinese businesses need to maintain good relations with the US and the western financial system. Therefore, getting the capital goods into Venezuela is going to be an interesting trick. Pump jacks and 42" steel pipes are a real trick to conceal on the high seas.

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Any investment by Beijing in Venezuela will provide the socialist Maduro regime with a financial lifeline that will allow PDVSA to expand petroleum production thereby bolstering the Venezuelan government’s ability to resist U.S. sanctions.

About all the 'Maduro regime' will do with more money is squander it the way they squandered what they had to start out with. If they had been financially literate enough to stay out of trouble they wouldn't have needed foreign help in the first place.

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7 hours ago, Meredith Poor said:

No doubt China Sees Opportunity. However, the fact that opportunity can be seen doesn't mean it can be exploited.

China would have to, in some form or another, boot out the incumbent government and install someone who knows what they're doing. The US experience with such interventions (Chile, Nicaragua, Iraq, etc.) is to end up sponsoring monsters. China would end up replacing one ghastly regime with another ghastly regime.

Realistically, Venezuela's days in the oil business are numbered. At some point all that will be left is a leaky, polluted wasteland. China might try to set up some sort of colonial viceroyalty there with a puppet, but this presumes first that the CCP can field someone with enough knowledge of how things are done in South America to be able to set up a remote control government. China's 'diplomatic' maneuvers elsewhere have tended to drive countries into the arms of the US or other western interests. The best example of this is Myanmar/Burma, and the Sri Lanka experience suggests things are evolving the same way there.

China has repeatedly promised other countries favors (usually in exchange for UN votes regarding Taiwan) without following through. Plenty of Chinese businesses need to maintain good relations with the US and the western financial system. Therefore, getting the capital goods into Venezuela is going to be an interesting trick. Pump jacks and 42" steel pipes are a real trick to conceal on the high seas.

About all the 'Maduro regime' will do with more money is squander it the way they squandered what they had to start out with. If they had been financially literate enough to stay out of trouble they wouldn't have needed foreign help in the first place.

Communism always fails economically. See North Korea, Cuba, etc.

China is fascist, not really communist. A synonym is statist. Capitalism run by the government. 

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Uh, dummy here...  Quizzle me puzzled, but I thought China already had $40B in Venezuela... waiting... waiting... waiting to be paid back.  

Der google overlords say $20B still to be paid back...  And most of that "payback" period was China taking said Ven cargo's across the Gulf to TX and selling Ven oil to the USA while China pocketed the difference...  Of course that ended a while ago so...  

Are you saying, ANOTHER major round?.... Did not China just ~loan $400B to Iran?

At 10Mbpd imported and climbing as their northern oil fields are nearly gone, and Malyasia's oil is disappearing... China needs ~200Million tons annually and growing.  Panama canal can take new Panamax ships and its yearly tonnage just jumped to 450Million tons, pulling in $2.6B in revenue, so technically..... only another ~Billion or so in tolls + whatever you "lend" Venezuela to get the thick goey stuff home.  Uh, now what?  Who has enough light sweet crude to mix that stuff with?(USA and no one else?, what is Russia's API?  Gulf does not have it)  I suppose China could go even larger into refining thick goey stuff, but have they even started that refinery process yet?  

So, yes, the capacity through Panama exists, but then what?  It is heavy thick oil.  Buy lots and lots of USA oil is pretty much the only solution and well...

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On 9/9/2021 at 7:56 PM, footeab@yahoo.com said:

Are you saying, ANOTHER major round?.... Did not China just ~loan $400B to Iran?

That 400B figure doesn't have any basis. It was taken from an article who's author pulled it out of thin air, the media ran with it without verifying.

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(edited)

5 hours ago, Strangelovesurfing said:

That 400B figure doesn't have any basis. It was taken from an article who's author pulled it out of thin air, the media ran with it without verifying.

It wasn't a cash loan and the author was "computing" costs on open market of goods and it was over at least a decade, so yea, suspect, but still a ballpark for amount of oil required to pay it back. 

Edited by footeab@yahoo.com
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Venezuela seems like a good opportunity for China to me. It is a low cost way to have increase influence in Latin America. They are already very involved with Brazil in terms of agricultural commodities. I see no way that the U.S. can stop them getting involved in Venezuela. But it is a long way from China.

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