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No one is targeted by Sino-Venezuelan energy co-op
Latest Updated by 2006-08-23 08:38:16
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Venezuelan President Hugo Chavez will visit China by invitation between August 22 and 27. It is President Chavez's fourth visit; he also came to China in 1999, 2001 and 2004. Chavez's visit will strengthen the "future-oriented, strategic partnership" between the two countries and promote Sino-Venezuelan relations.

Most of the Western media believe Chavez is seeking a new energy market so that Venezuela is not so dependent on the US market. Members of the US Congress have warned that Sino-Venezuelan energy cooperation might eventually affect the US oil market.

No-one denies that China and Venezuela have made significant progress in energy cooperation in recent years as their relationship has developed. Both sides have a great interest in strategic energy cooperation. Venezuela is the largest producer of oil in Latin America, and it has the largest oil reserves. To safeguard its economic security and in search of a solution to its increasing production, Venezuela has been seeking oil market diversification. As the world's second largest oil consumer (after the US), China came to the attention Venezuela because of its rising status in the world economy and unlimited business opportunities. Simultaneously, China has been looking around the world for more energy resources so as to reduce its dependence on the volatile oil market of the Middle East. In these circumstances, it is natural that Venezuela, a country with high oil production and friendly relations with China, has become its partner in developing the overseas energy market. It is for strategic reasons that China and Venezuela have strengthened economic and trade ties and cooperated on energy.

Beginning quite late and at a low starting point, Sino-Venezuelan energy cooperation is actually a weak area in the two countries' economic and trade relations. In 2004 Venezuela provided China with just 12,300 barrels of oil each day. Compared to the 1.5 million barrels that Venezuela provides to the United States on a daily basis, the figure is simply not worth mentioning. Even if Hugo Chavez increase his country's supply of oil to China to 200,000 barrels daily, the volume still pales into insignificance compared to what the US buys.

The volume of oil imported from Venezuela only accounts for a small proportion of China's total crude oil imports. In the first seven months of 2004, China imported 6100 tons of crude oil from Venezuela, accounting for just 0.1 percent of its total crude oil imports in that period. Sino-Venezuelan energy cooperation is likely to be affected by a variety of factors, such as geographical distance, high transportation and processing costs, and uncertainty about security. Venezuela has been making an effort to strengthen its economic and trade relations with other South American countries, Caribbean countries, Russia, and countries in the Middle East and Central Asia. Clearly, China is only a part of Venezuela's expanding overseas market, although of course a very important part. Regardless, the economic, trade and energy relationship between China and Venezuela does not pose any threat to the United States.

The Sino-Venezuelan strategic partnership is closer than ever. Officials from the two countries have met frequently, strengthening political trust and expanding cooperation in various fields. The volume of bilateral trade has grown since diplomatic ties were established. In 2005, the volume of Sino-Venezuelan trade reached US$2.1 billion. Venezuela has become one of China's most important trading partners and one of the countries in which China invests most heavily in Latin America. China has also become one of Venezuela's most important trading partners in Asia. From the perspective of strategic demand, China is the largest developing country with the fastest growing demand for energy in the world. Venezuela is the most influential country in Latin America and the world's fifth largest oil exporter. Both sides play increasingly important roles in maintaining regional stability, promoting regional integration, and safeguarding the interests of developing countries, particularly in the area of complementary economic benefits. To ensure sustainable development of the "future-oriented strategic partnership," the two countries need to support each other politically, depend on each other in trade, and learn from each other's civilizations.

Editor: Yan

By: Source: People's Daily website
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