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As Hugo Chávez battles cancer and prepares to run in the upcoming Venezuelan presidential election, a group of experts gathered at AEI on Thursday to discuss the implications of this tenuous situation on Venezuela’s oil deals with China.
Roger Noriega of AEI initiated the discussion by outlining the deepening economic relationship between the two countries, which coincides with a weakening economic bond between Venezuela and the United States. Evan Ellis of the Strategic Studies Institute then presented a history of the “delicate dance of mutual interest” between China and Venezuela — how China has come to lock in oil prices at the lowest possible rates — and how Venezuela has used its financial support to maintain its current political system.
Ellis also elaborated on the complicated situation China faces as Venezuela approaches a possible change in administration. If Chávez’s rival candidate Henrique Capriles Radonski can prove a more stable trading partner, it may be in China’s best interests to rally for his election.
Vanessa Neumann of the Foreign Policy Research Institute gave a broader overview of the China-Venezuela agreements and offered a Venezuelan’s perspective on the relationship. She claimed that, for the Venezuelan people, it is “galling and ironic” that Chavez is “privatizing” the Venezuelan state-owned oil company, Petróleos de Venezuela. Nonetheless, she believes China’s investments in Venezuela have improved the country’s infrastructure, which is imperative to its continued economic growth.
In the last six years, under the cloak of Washington's indifference, the People's Republic of China has dramatically increased its participation in Venezuela's oil sector, stepping in as President Hugo Chávez displaces U.S., European and even local investors. Chinese imports of Venezuelan oil have increased tenfold in five years, while U.S. imports of Venezuela’s traditional source of petroleum is one-third what it was 10 years ago. China has contributed $24 billion to Chávez’s secretive slush fund over the past year and half, satisfying Caracas’s desperate need for cash in exchange for oil at artificially low prices. What does China stand to lose when Chávez dies, and what will Beijing do to preserve its sweetheart deals with Venezuela? Join a panel discussion on this timely and significant topic.
Evan Ellis, Center for Hemispheric Defense Studies
Vanessa Neumann, Foreign Policy Research Institute
Roger F. Noriega, AEI
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Evan Ellis is a professor of national security studies, modeling, gaming and simulation with the Center for Hemispheric Defense Studies, with a research focus on Latin America’s relationships with external actors, including China, Russia and Iran. His work includes the 2009 book “China in Latin America: The Whats and Wherefores” as well as 46 articles in English and Spanish, published over the past seven years in magazines and journals from Joint Forces Quarterly to Air and Space Power Journal en Espanol to the Revista de Dinámica de Sistemas. Ellis has presented his work in a broad range of business and government forums in North America, Latin America, Central America, the Caribbean, Mexico and Europe, and is a regular guest lecturer at the U.S. Air Force Special Operations School and Joint Special Operations.
Vanessa Neumann is a senior fellow at the Foreign Policy Research Institute, where she specializes in Latin America and terrorism and is also an associate of the University Seminar on Latin America at the School of International and Public Affairs (SIPA) at Columbia University. She is a regular contributor to The Weekly Standard on Latin American politics, and has also written for The (London) Sunday Times, The Guardian, The Daily Telegraph and Standpoint. A native Venezuelan, Neumann has worked as a journalist in Caracas, London and the United States. She is editor-at-large of Diplomat, a London-based magazine to the diplomatic community. She has also worked in corporate planning and corporate finance in Caracas and, in diplomacy, as assistant to the commercial attaché and the minister counselor for Petroleum and Economic Affairs at the Venezuelan Embassy in Washington, D.C.
Roger F. Noriega is a visiting fellow at AEI and the founder and managing director of Visión Américas LLC, which advises U.S. and foreign clients on international business issues. He served as the assistant secretary of state for Western Hemisphere Affairs (Canada, Latin America and the Caribbean) from July 2003 to October 2005 and as the U.S. ambassador to the Organization of American States from August 2001 to July 2003. Ambassador Noriega currently serves as vice chairman of the board of directors of the Congressional Award Foundation and is a member of the advisory boards of the Canadian American Border Trade Partnership and The Americano, an online forum reaching out to Latino voters.