China says promise of more money for Venezuela part of ‘mutually beneficial cooperation’

China on Friday extended its offer of financial support to Venezuela as the South American nation’s President Nicolas Maduro arrived in Beijing for talks with Chinese President Xi Jinping and other leaders.

Developing relations with Venezuela was a strategic decision for China, Xi said during the meeting, extracts of which were shown by state broadcaster CCTV.

“China and Venezuela have to enhance friendly mutual trust and push for mutually beneficial cooperation,” he said.

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Maduro was in Beijing mainly to seek economic cooperation for his country, which is mired in debt and battling hyperinflation.

Over the past decade, China has loaned US$50 billion to Venezuela, and while Caracas has been gradually paying off that debt with oil shipments, it still owes Beijing about US$20 billion.

Earlier in the day, Maduro visited Mao Zedong’s mausoleum in Beijing’s Tiananmen Square, where he bowed three times before laying a wreath and hailing the founder of the People’s Republic of China as a “giant of the homeland of humanity”.

“We are beginning this state visit in the best way because we have come to pay tribute to the great helmsman Mao Zedong,” Maduro said in comments broadcast by Venezuela’s official VTV network.

“I was very moved because it really reminds me of one of the great founders of a multipolar 21st century,” he said, adding that Mao had been a “giant of revolutionary ideas”.

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In a separate meeting, Chinese Premier Li Keqiang said bilateral relations between Beijing and Caracas had good momentum.

“China will provide assistance to Venezuela within its capacity,” he said in the CCTV footage. “China will support Venezuela’s efforts to develop its economy and improve people’s livelihoods.”

But Li also called on Caracas to improve its policies and legal protection for Chinese businesses operating in Venezuela.

During the talks, the two nations signed a memorandum of understanding with regards to cooperation on China’s “Belt and Road Initiative” – a massive development programme Beijing initiated to boost infrastructure and trade links with more than 65 countries and regions.

Maduro also met Chinese Foreign Minister Wang Yi and National Development and Reform Commission chairman He Lifeng.

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While no information was released about the deals the two nations reached, Venezuelan consultancy Ecoanalitica said Maduro may return home with a new US$5 billion loan and a six-month extension to the grace period to service Venezuela’s existing debts.

The Venezuelan government has been desperately trying to curb soaring inflation, with a series of measures including devaluing its currency, which shaved five zeros off the value of the bolívar, and raising the minimum wage by 3,500 per cent.

The International Monetary Fund projects Venezuela’s inflation rate will reach 1 million per cent by the end of the year.

Maduro’s trip comes as China is seeking to extend its presence in Latin America, with investment pledges totalling US$500 billion. The United States has expressed its concern at Beijing’s moves, with former secretary of state Rex Tillerson warning of China’s “imperial ambitions” in the region.

But Xi told Maduro that China’s relationship with Latin America was based on the principle of equality.

Maduro’s trip to China is his first outside the country since he was allegedly targeted by exploding drones while watching a military parade in Caracas on August 4.

Additional reporting by Agence France-Presse