Wednesday, May 15, 2013

Venezuela: As the US Exchanges Barbs with Caracas, China Invests on a Large Scale in Latin America

According to EFE, Chinese Vice President Li Yuanchao visited Caracas yesterday (May 14) and asked the Maduro government for assistance in managing a US$52 million agro-industrial plant it is building.

“We have to take care that these projects are effective and efficient, in the sense that they can play a positive role in employment and economic and social effects,” Li told Venezuelan Foreign Minister Elias Jaua while touring the site.

The plant will pasteurize milk and produce other dairy products and is being constructed in Valles del Tuy, not far from the Venezuelan capital.

COMMENT: Jaua told Li on Monday (May 13) that he wants Chinese support for other direct foreign investment as well.  

VP Li arrived in Venezuela over the weekend and on Monday met with Maduro, with whom he signed accords for the financing of other works, among them the construction of a port for state petrochemical company, Pequiven. 

Washington's on-going political discourse with Hugo Chávez, and now the Maduro government, is giving the PRC a golden opportunity to continue with its investment initiatives in Latin America, as the cash-strapped US plays second fiddle to Beijing, the latter of which has virtually unlimited investment resources. 

At the same time, the US must be mindful that MERCOSUR, the South American trade bloc, is made up of  Argentina, Brazil, Paraguay, Uruguay, and Venezuela, with Bolivia being an associate member. Needless to say, MERCOSUR relationships are also politically linked and tend to vote together.