Chinese Media Eye Venezuela Debt

˙ Asia & Latin America

The Inter-American Dialogue’s China and Latin America program is pleased to provide monthly reports on China’s media coverage of Latin America. Though still relatively limited, Chinese media reporting on Latin America has expanded in recent years. Coverage generally highlights economic opportunities in the region, high-level visits, and security and other challenges evident in certain Latin American nations.

Changes to the China-Venezuela Joint Fund Agreement were reported by Chinese media in October. The fund channels contributions from both governments to support social and economic programs in Venezuela. Chinese loans to the joint fund are repaid through oil shipments at market prices. According to Venezuela’s Official Gazette, the two governments agreed to remove the minimum for loan-related oil shipments (previously 330 thousand barrels per day), allow Venezuela’s government to make contributions in local currency rather than US dollars, and alter the maturity of one of three loan tranches.

Some Chinese media indicated concern over China’s financial links with Venezuela. Echoing several prominent Western publications, a report in Phoenix Media (凤凰网) interpreted the renegotiation as a “default” on the part of Caracas (委内瑞拉对华500亿美元贷款违约:不还钱 也不给油) and argued that Chinese banks will be less likely extend credit to Venezuela in the  future. [After subsequent analysis suggested that changes to the agreement are likely not the result of Venezuela’s inability to honor its oil-related commitments, most English-language sources retracted the “default” language.] Another article noted that Venezuela has begun to import crude oil, reportedly in response to declining oil prices (全球第五大石油出口国委内瑞拉开始进口原油).

The re-election of Brazilian president Dilma Rousseff was also covered by Chinese papers. State media outlet Xinhua viewed the outcome as an important step toward improving ties with China and other BRICS nations (罗塞夫为何能‘梅开二度). Other media, however, expressed concern over the implications of a Rousseff win for Chinese trade and investment. A Huanqiu article suggested that the president will face challenges in her second term, noting that Dilma’s victory precipitated a plunge in stock values (巴西市场忧罗塞夫连任会令改革停滞 股市猛跌). An op-ed in China’s The Paper (澎湃) argued that China’s exports of manufactured products could come under greater pressure during Rousseff’s second term  (巴西大选后,中国应关注的两个动向).

Outside of Brazil and Venezuela, Chinese reporting from October featured numerous pieces assessing the economic outlook for Latin American markets. Phoenix Media (凤凰网) noted an optimistic forecast for Bolivia, which is expected to grow at high rates through the remainder of 2014 (玻利维亚有望成为拉美地区经济增速最快国家). Another article suggested that a weakening currency and slowing commodity exports will likely increase Argentina’s dependence on China, which has become a major source of investment in the Latin American nation (拉美学者:阿根廷经济对中国依赖性将增强). Chinese news also cited a new UN report (报告称拉美国家基础设施投资滞后 资金严重不足), noting concerns about  the  shortage of investment in Latin America’s infrastructure.

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