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China Lends Venezuela $20 Billion

21 April 2010 27 views No CommentEmail This Post Email This Post

In exchange for a promise of 400,000 barrels of oil a day by 2015, China has agreed to lend Venezuela $20 Billion that it sorely needs. This will help offset China’s dependence on Saudi Arabia for its oil needs. Venezuela produces extra-heavy oil that is high in sulphur and has specific refining needs. Most of the world’s heavy oil refineries are located in the US, however China has plans to build a heavy oil refinery in Gongdong. It seems that China is slowly removing its reliance on any one country for its energy needs.

Accordingly to the Global Times, half of this amount is in Chinese yuan. Apparently, China is trying to get other countries used to doing business with the yuan instead of the dollar, maybe in anticipation of a day when the US dollar will no longer be the world’s reserve currency!

China already has deals with other South American and African countries for various commodities. It has also been diversifying its foreign reserves and US treasuries and buying gold instead. So while the US is wasting money maintaining its empire by waging foreign wars, China is slowly building its empire through trade agreements. I don’t know about you, but it definitely seems like a good idea to start learning Mandarin!

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