Bilateral Relations: Venezuela and China officially establish $6 billion bilateral fund

Venezuela and China have established a $6 billion bilateral fund to finance projects in both nations, the Venezuelan government said in a press release.

The Chinese government will put $4 billion into the fund, while the Venezuelan government will be responsible for $2 billion. The new fund could have up to $18 billion in resources in nine years.

The fund was created between Bandes, the Venezuelan development bank, and the China Development Bank, according to the press release.
The fund will help finance infrastructure and energy projects as well as social programs.

President Hugo Chavez made the announcement during a signing ceremony in which Venezuelan and Chinese officials signed 11 bilateral agreements. Chavez has strengthened political and economic ties to China in recent years to counter U.S. influence in Latin America.

The Chinese delegation included Zhang Xiaoqiang, a deputy minister of the National Development and Reform Commission, the country's top economic planning agency, and China Development Bank Vice Governor Liu Kegu.

The two countries signed an oil transportation accord that would lower the cost of shipping oil to Asia. Venezuela plans to sell 500,000 barrels of crude a day to China next year, up from this year's 350,000 barrels a day.

State oil company Petroleos de Venezuela SA, or PdVSA, will continue to increase its oil exports to the Asian country until it reaches 1 million barrels a day of crude and related products between 2010 and 2011, the information ministry said in a press release.

Chavez has previously vowed to create a joint company to manufacture oil rigs that can help Venezuela rely even less on foreign service companies. In the interim, PdVSA struck a $198 million deal to buy 13 rigs from China, the first two of which are expected to arrive in Venezuela this month.

The China National Petroleum Corp. has also agreed to conduct a series of reserve quantification studies in Venezuela's Orinoco heavy oil region.
Both countries also created a joint telecommunications venture between China's Haier Electrical Appliances Corp. and Venezuela's Corpivensa.

Venezuela's Sociedad Mercantil CVG and China's Huawei Technologies established a joint venture to manufacture telecommunications equipment in Venezuela.