China Engages a Venezuela in Transition R. Evan Ellis Presentation to the American Enterprise Institute Washington DC April 12, 2012
China Engages
a Venezuela in Transition
R Evan Ellis
Presentation to the
American Enterprise Institute
Washington DC
April 12 2012
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull PRC financial commercial and technical support as an
indirect enabler of Chavez regime
bull Both sides pursuing self-interest hoping to avoid pitfalls
bull Venezuela Meet revenue demands of electoral in
social spending + pay current bills + infrastructure amp
investment to bring future production on linehellipbefore
debt repayment becomes unsustainable
bull PRC Reap financial benefits of loans and
construction projects access to Venezuelan markets
and commodities without
bull Project failures Loan defaults ldquoLybia IIrdquo
bull Damage to strategic partnership with US
Overview
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
China Venezuela Trade Oil for Goods amp Services
430 agreements 200+ projects with PRC in last decade
$18B in 2011
Bilateral Trade
(13 of total for
Venezuela)
20B+ for 2012
11M bd oil to China by 2014 (PdVSA est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Loans to Venezuela
Significant confusion in media reporting and official
announcements about size of line of credit openrepaid versus
funds deliveredhellipmuch double counting
bull$38 billion in Loans to date 2B+ more in the works
bull$4B to Heavy Inv Fund (1) (CDB) ndash Delivered 2007
bull$4B to Heavy Investment Fund (2)(CDB) ndash Delivered 2009
bull$88B to Long-Range Fund (CDB) ndash Delivered 2010
bull$4B to Heavy Investment Fund (3)(CDB) ndash Delivered 2011
bull$12B to Long-Range Fund (CDB) ndash Earmarked for Projects
bull$4B to Heavy Investment Fund (4)(ICBC) ndash Agreed Feb 12
bull$15B for homebuilding by CITIC
bull$05B for oil drills (CDBICBC)
bull$2B for refineries oil projects w CITIC (ICBC) ndash To Come
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
CDB Loan Flows and Terms (Est)
$12B new funds Into
BNDES account ldquooff-budgetrdquo
Elections
2007 2008 2009 2010 2011 2012 2013 2014
$4B to Heavy Inv Fund
100k bd x 3 yrs $50bbl
$4B to Heavy Inv Fund
130k bd x 3 yrs $40bbl
$88B to Large Size Fund
200k bd x 10 yrs $40-$50bbl
$4B to Heavy Inv Fund
100+k bd x 3 yrs $40-$50bbl
$12B to Large Size Fund
200+k bd x 10 yrs
Obligation
5-600k bd =
$18Byr+ lost
oil revenue
Assumes $80bbl
average price for
Venezuelan crude
$4B to Heavy Inv Fund
70+k bd x 3 yrs (est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull PRC financial commercial and technical support as an
indirect enabler of Chavez regime
bull Both sides pursuing self-interest hoping to avoid pitfalls
bull Venezuela Meet revenue demands of electoral in
social spending + pay current bills + infrastructure amp
investment to bring future production on linehellipbefore
debt repayment becomes unsustainable
bull PRC Reap financial benefits of loans and
construction projects access to Venezuelan markets
and commodities without
bull Project failures Loan defaults ldquoLybia IIrdquo
bull Damage to strategic partnership with US
Overview
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
China Venezuela Trade Oil for Goods amp Services
430 agreements 200+ projects with PRC in last decade
$18B in 2011
Bilateral Trade
(13 of total for
Venezuela)
20B+ for 2012
11M bd oil to China by 2014 (PdVSA est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Loans to Venezuela
Significant confusion in media reporting and official
announcements about size of line of credit openrepaid versus
funds deliveredhellipmuch double counting
bull$38 billion in Loans to date 2B+ more in the works
bull$4B to Heavy Inv Fund (1) (CDB) ndash Delivered 2007
bull$4B to Heavy Investment Fund (2)(CDB) ndash Delivered 2009
bull$88B to Long-Range Fund (CDB) ndash Delivered 2010
bull$4B to Heavy Investment Fund (3)(CDB) ndash Delivered 2011
bull$12B to Long-Range Fund (CDB) ndash Earmarked for Projects
bull$4B to Heavy Investment Fund (4)(ICBC) ndash Agreed Feb 12
bull$15B for homebuilding by CITIC
bull$05B for oil drills (CDBICBC)
bull$2B for refineries oil projects w CITIC (ICBC) ndash To Come
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
CDB Loan Flows and Terms (Est)
$12B new funds Into
BNDES account ldquooff-budgetrdquo
Elections
2007 2008 2009 2010 2011 2012 2013 2014
$4B to Heavy Inv Fund
100k bd x 3 yrs $50bbl
$4B to Heavy Inv Fund
130k bd x 3 yrs $40bbl
$88B to Large Size Fund
200k bd x 10 yrs $40-$50bbl
$4B to Heavy Inv Fund
100+k bd x 3 yrs $40-$50bbl
$12B to Large Size Fund
200+k bd x 10 yrs
Obligation
5-600k bd =
$18Byr+ lost
oil revenue
Assumes $80bbl
average price for
Venezuelan crude
$4B to Heavy Inv Fund
70+k bd x 3 yrs (est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
China Venezuela Trade Oil for Goods amp Services
430 agreements 200+ projects with PRC in last decade
$18B in 2011
Bilateral Trade
(13 of total for
Venezuela)
20B+ for 2012
11M bd oil to China by 2014 (PdVSA est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Loans to Venezuela
Significant confusion in media reporting and official
announcements about size of line of credit openrepaid versus
funds deliveredhellipmuch double counting
bull$38 billion in Loans to date 2B+ more in the works
bull$4B to Heavy Inv Fund (1) (CDB) ndash Delivered 2007
bull$4B to Heavy Investment Fund (2)(CDB) ndash Delivered 2009
bull$88B to Long-Range Fund (CDB) ndash Delivered 2010
bull$4B to Heavy Investment Fund (3)(CDB) ndash Delivered 2011
bull$12B to Long-Range Fund (CDB) ndash Earmarked for Projects
bull$4B to Heavy Investment Fund (4)(ICBC) ndash Agreed Feb 12
bull$15B for homebuilding by CITIC
bull$05B for oil drills (CDBICBC)
bull$2B for refineries oil projects w CITIC (ICBC) ndash To Come
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
CDB Loan Flows and Terms (Est)
$12B new funds Into
BNDES account ldquooff-budgetrdquo
Elections
2007 2008 2009 2010 2011 2012 2013 2014
$4B to Heavy Inv Fund
100k bd x 3 yrs $50bbl
$4B to Heavy Inv Fund
130k bd x 3 yrs $40bbl
$88B to Large Size Fund
200k bd x 10 yrs $40-$50bbl
$4B to Heavy Inv Fund
100+k bd x 3 yrs $40-$50bbl
$12B to Large Size Fund
200+k bd x 10 yrs
Obligation
5-600k bd =
$18Byr+ lost
oil revenue
Assumes $80bbl
average price for
Venezuelan crude
$4B to Heavy Inv Fund
70+k bd x 3 yrs (est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Loans to Venezuela
Significant confusion in media reporting and official
announcements about size of line of credit openrepaid versus
funds deliveredhellipmuch double counting
bull$38 billion in Loans to date 2B+ more in the works
bull$4B to Heavy Inv Fund (1) (CDB) ndash Delivered 2007
bull$4B to Heavy Investment Fund (2)(CDB) ndash Delivered 2009
bull$88B to Long-Range Fund (CDB) ndash Delivered 2010
bull$4B to Heavy Investment Fund (3)(CDB) ndash Delivered 2011
bull$12B to Long-Range Fund (CDB) ndash Earmarked for Projects
bull$4B to Heavy Investment Fund (4)(ICBC) ndash Agreed Feb 12
bull$15B for homebuilding by CITIC
bull$05B for oil drills (CDBICBC)
bull$2B for refineries oil projects w CITIC (ICBC) ndash To Come
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
CDB Loan Flows and Terms (Est)
$12B new funds Into
BNDES account ldquooff-budgetrdquo
Elections
2007 2008 2009 2010 2011 2012 2013 2014
$4B to Heavy Inv Fund
100k bd x 3 yrs $50bbl
$4B to Heavy Inv Fund
130k bd x 3 yrs $40bbl
$88B to Large Size Fund
200k bd x 10 yrs $40-$50bbl
$4B to Heavy Inv Fund
100+k bd x 3 yrs $40-$50bbl
$12B to Large Size Fund
200+k bd x 10 yrs
Obligation
5-600k bd =
$18Byr+ lost
oil revenue
Assumes $80bbl
average price for
Venezuelan crude
$4B to Heavy Inv Fund
70+k bd x 3 yrs (est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
CDB Loan Flows and Terms (Est)
$12B new funds Into
BNDES account ldquooff-budgetrdquo
Elections
2007 2008 2009 2010 2011 2012 2013 2014
$4B to Heavy Inv Fund
100k bd x 3 yrs $50bbl
$4B to Heavy Inv Fund
130k bd x 3 yrs $40bbl
$88B to Large Size Fund
200k bd x 10 yrs $40-$50bbl
$4B to Heavy Inv Fund
100+k bd x 3 yrs $40-$50bbl
$12B to Large Size Fund
200+k bd x 10 yrs
Obligation
5-600k bd =
$18Byr+ lost
oil revenue
Assumes $80bbl
average price for
Venezuelan crude
$4B to Heavy Inv Fund
70+k bd x 3 yrs (est)
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
PRC Non-Loan Investment Commitments to Venezuela
bullEstimated $41B+
bull$164B Junin-4 (CNPC) ndash 400k bd
bull$900M down (2010)
bull$23B more to develop
bullJunin 1 ndash Sinopec ndash 200k bd
bullJunin 8 ndash Sinopec -200k bd
bullMP3 (Sinovensa) ndash from 112k bd to 330000 bd in 2016
bullBoyaca 4
bullMariscal Sucre gas fields ndash CNOOC
bull$1B for CITIC acquisition of 10 stake in Petropiar from Chevron
bullFuture investments in mining sector following mineral survey
Loans + Promised Investments represent a $79 billion+
PRC contribution to the Chavez regime
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
Dimensions of Relationship (1)
Initially Liberating
bull Military sales at time when Chinese access to
USWestern technology was blocked
bull 18 K-8 aircraft 10 JYL-1 radars
bull C2 equipment training to DICOFAN (Huawei)
bull Interest in CH-3 UAVs L-15s IGLA missileshellip
bull 1st Heavy Investment Fund (2007) ndash w PdVSA liquidity crisis
bull PRC investment (with Russia others) as a substitute for Western
investors to develop the Orinoco tar sands
bull Investorssuppliers during nationalization of multiple sectors
bull Drilling rigs training for PdVSA personnel in PRC
bull Factories Huawei ZTE Chery etc
bull$300M for LABS regional airline ndashPurchase of Chinese Y-12 AC
bull ZTE
bull Space Telecom
bull Fiber-Optic infrastructure following nationalization ndash Work by
Huawei VENSAT-1 VRSS-1 (Oct 12) ground stations by GWIC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Second $4B to Heavy Investment Fund (2009)
bull Coincides with second in oil prices
bull $20B long-range fund at time of 2010 political crisis
bull Projects tied to covering electricity shortfalls
bull Hidroelectric PowerPlant - Sinohydro
bull 8 Thermoelectric plants ndash China Harbour others
bull Also covering impact of inflation associated with currency
re-evaluation
bull 300000 Haier appliances from loan funds (May 10)
bull $15B loans for CITIC-built housing (Feb 12) misiones
bull Covering PdVSA investment capital shortfalls
bull $15B in guarantees for PdVSA to get loan from
BNDES for Pernambuco refinery
Dimensions of Relationship (2)
Then Rescuing
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Loaning $$ to build infrastructure to get the oil and minerals out
while keeping a collaborative Venezuelan government in power
bull Railroads connecting NW coast to interior (eg Tinaco-Anaco)
bull Port Expansion - Pto Cabello Palua
bull Refineries and Mixing Facilities (eg Cabruto)
bull Oil platforms $500M for CITIC project w ICBC funds-Feb 12
bull Aluminum Aid to ALCASA to pdn ndash Mar 12
bull Mining $300M to map area for later exploitation (Feb 12)
bull $500M in negotiation to develop Las Cristinas goldmine
bull Mgt of loans and projects through bi-national committee
bull Last at ministerial level 21-23 Nov 2011
bull Loans increasingly directly tied to projects
bull Project review and technical visits by CDB from April 2010 to
present (incl meetings with CDB head Chen Yuan)
Dimensions of Relationship (3)
Collaboration w Oversight
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Critical Political Moment
bull Chavez-Capriles Even in some polls + health question
bull Election year spending 20 Jan-Feb + 3 new misiones funded
by debt (Saber y Trabajo Hijos de Venezuela Amor Mayorhellip)
bull Indirectly enabled by Chinese funds
bull Incentive not to undercut Chavez in election year
bull Questioning of constitutionality of debts incurred by Chavez to
PRChellip
bull ldquoPresident Caprilesrdquo ndash
bull Likely to proceed cautiously because of social risk
bull PRC companies less favored but hellip
bull Venezuela a more reliable partner
bull Mixed precedents Peru Libya
China and the Venezuelan Election
PRC posture toward Capriles not predetermined
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
Questions amp
Comments
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC
For more information contact Dr R Evan Ellis Tel 202-685-4195 Email ellisr9nduedu
bull Overlapping initiatives by PRC banks and construction cos
bull CITIC wants 900 MW plant in Junin with ICBC loanhellipbut
CMEC already plans to build it with CDB funds
bull Occasionally hurt frustrated by Chavez Government
bull 2005 CNPC tax dispute with SENIAT
bull 2006 - Stopped Ormulsion pdn after plant to use it built in PRC
bull Impact of currency controls on Chinese factories
bull CDB guarantees 75 of loan from BNDES for Abreu-e-Lima
Refinery ($15B)hellipbut PdVSA still canrsquot get loan (Feb 12)
bull Protection of Chinese nationals and operations
bull Eg Kidnappingmurders of Chinese railroad workers on
Tinaco-Anaco line
bull 2004 violence against Chinese Venezuelan community in
Valencia Maracay
Dilemmas for PRC