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  • China and Venezuela have been historic economic allies. Venezuelan President Maduro (L) meets with President Xi Jinping (R) of China are seen meeting in 2015.

    China and Venezuela have been historic economic allies. Venezuelan President Maduro (L) meets with President Xi Jinping (R) of China are seen meeting in 2015. | Photo: Reuters

Published 10 June 2017

The Venezuelan Vice President of Planning has said the agreements are representative of the "geopolitics of the economic future."

Representatives from the Bolivarian Republic of Venezuela and the People's Republic of China have met this week to discuss and revise bilateral agreements on cooperative economic development, with a focus on working with China to improve Venezuela's economic productivity and diversity through investment in agriculture and automotive production.

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Venezuelan Vice President of Planning, Ricardo Menendez said on his twitter account that “Venezuela and China have deep ties of strategic brotherhood,” adding that the agreements represent the “geopolitics of the economic future.”

Resulting from the talks were plans to expand bilateral investment in the agricultural and industrial sectors in Venezuela, as the nation looks to diversify its economy to reduce its historic dependency on oil, which currently accounts for over 90% of its exports.

Menendez was enthusiastic about the opportunities provided by Chinese investment and optimistic regarding the potential benefits it could bring to the Venezuelan people and economy.

“The most important thing,” he said on twitter, “is the new productive capacity that Chinese companies want to install in our country.”

The two countries discussed the possibility of automotive production in Venezuela, and Menendez said that a working group was established to initiate the planning process for installing a truck factory, and an engine production line there.

Chinese companies have also been engaged in ongoing talks with the Venezuelan Minister for Agricultural Production and Land, Wilmar Castro Soteldo, in order to figure out ways to bring in Chinese investment and technology to improve the historically small Venezuelan agricultural sector.

Agriculture has been a historically small component of Venezuela's economy for nearly a century, when oil prospecting became the most profitable sector and crowded out most other areas of production in the country with the world's largest petrol reserves.

Plans were made to expand domestic cotton and textile production, with a ginning factory set to be constructed.

"It is a matter of vital importance to meet the growing textile demand within our country and to recompose the productive capacity of this sector," Menendez said

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The meetings also resulted in agreements to increase joint oil production.

Strengthening international trade is increasingly essential for the South American nation, where the right-wing opposition has called for foreign sanctions to be imposed, and has pressured global investment firms to cut off financial ties with the economically struggling country.

Venezuela has been a vocal supporter of China's efforts toward constructing alternative networks of global trade, dubbed the Belt and Road Initiative.

The initiative, which seeks to establish stronger economic relations between China and much of the Middle East, Africa, and Asia, has been supported by Venezuela who would benefit from increased trade relations with the participating countries. Both highly criticized and highly praised, the initiative has been viewed by some as contributing toward a new wave of globalization that shifts the traditional centers of power in the world economy, possibly opening up the space for new power blocs to form.

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