Introduction to International Politics
Foreign Event Analysis
| Locale | ![[]](http://www.kvasaheim.com/flags/flag15-cn.png "Flag of China") | China |
|---|---|---|
| Title |
Oil Trade Agreement Established between China and Venezuela
| |
| Summary |
President Hugo Chavez of Venezuela and President Hu Jintao of China signed an agreement on Wednesday in Beijing that may raise Chinese imports of Venezuelan oil to one million barrels a day by 2010. The agreement also provides for a joint investment fund of $12 billion and the construction of several refineries in China for Venezuela’s crude oil.
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| Analysis |
The agreements by Presidents Hugo Chavez and Hu Jintao on September 24 laid the foundations for a stronger relationship between their nations. Venezuela’s oil production capabilities match well with China’s demand as a huge industrial force with ever-expanding needs for energy. By aiming to increase oil trade threefold by 2012, each of these countries can receive large absolute gains. From a Chinese point of view, the deal will provide a fairly reliable and friendly energy source to fuel the growing Chinese industry. Venezuela will gain by procuring a huge consumer for its oil. By investing in an economically interdependent relationship with China, Venezuela will gain a strong ally.
The talks between Hu and Chavez touched on a wide variety of non-oil related issues as well, including education, telecommunications, and infrastructure construction. Cooperative efforts in these areas will further profit Venezuela and China. The increased oil trade will create a strong tie between the two countries and create a firm foundation for interdependence on other matters as well.
The United States claims to be unconcerned about this developing relationship between Venezuela and China. While China may be stepping further into Washington’s back yard, the trade agreement will guarantee pleasant relations between China and Venezuela. This cooperation may serve United States interests as well by insuring peace and bringing increased prosperity to two nations with whom American financial institutions interact heavily. | |
| Perspective |  | Liberal |
| In-Region URL | ||
| Out-of-Region URL | ||
| Submitted | September 26, 2008 at 01:35 am | |
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