China's President Xi Jinping (L) and Venezuela's President Nicolas Maduro shake hands during a signing ceremony in Caracas July 21, 2014. REUTERS/Carlos Garcia Rawlins/File Photo
Nick Cunningham, OilPrice.com: Did Venezuela Just Lose A Key Ally?
Venezuela’s debt crisis is only expected to grow worse this year, and the government could be without one of its most important benefactors, raising the odds of yet another default.
China has sent around $50 billion to Venezuela over the years, loans that were repaid in oil shipments. China needed oil and Venezuela needed cash, and the relationship worked for a period of time. But as Venezuela’s economic situation took a turn for the worse, China slowly backed away. Or, more accurately, China allowed Venezuela more lenient repayment terms while at the same time slowly closing the door on new loans.
According to a new Reuters report, with an agreement expiring this year, China will likely extend a financing arrangement that has already been in place that stretches out Venezuela’s debt payments. With little to no cash on hand, China is allowing Venezuela to only pay interest on its debt.
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WNU Editor: Venezuela owes both China and Russia tens of billions of dollars .... and they can no longer repay these loans. What we are now seeing is a picking of the carcus from both Russia and China .... which was predicted by many (including yours truly) years ago.
