Land-for-debt swap called ‘ground­less’

China Daily (Canada) - - CHINA - By ZHANG YUNBI zhangyunbi@chi­

Bei­jingdis­missed­me­di­aspec­u­la­tion thatVenezuela would giveChina a fa­mous re­sort is­land to de­fray debt in­curred by fall­ing oil prices, call­ing the re­ports “ground­less”.

The steep fall in global oil prices — nearly 40 per­cent since midJune — led to in­creased spec­u­la­tion that Venezuela, a ma­jor oil ex­porter, would have dif­fi­culty ser­vic­ing its debt.

Cap­i­ta­land­in­ter­est re­pay­ments by Venezuela on loans given by China are “go­ing on nor­mally”, China con­firmed on Thurs­day.

Hong Kong-based news­pa­per Takung­pao, with­out nam­ing sources, said Venezuela was con­sid­er­ing giv­ing China Blan­quilla Is­land in the south­ern Caribbean as pay­ment to cover debt of ap­prox­i­mately $50 bil­lion.

For­eignMin­istry spokes­woman Hua Chun­y­ing told re­porters in Beijing that “as far as I know, the re­port is ground­less’’.

The is­land ru­mors made head­lines as Venezue­lan Fi­nance Min­is­ter Rodol­foMarco Tor­res started a visit to China on Tues­day.

China and Venezuela have es­tab­lished a fi­nanc­ing ve­hi­cle whereby oil and fuel ship­ments have been used to re­pay loans.

Fi­nan­cial in­sti­tu­tions in China planned to ex­change views with Venezue­lan of­fi­cials re­gard­ing a prag­matic agenda be­tween the coun­tries, Hua said.

XuShicheng, a re­search fel­low of Latin Amer­i­can stud­ies at the Chi­nese Academy of So­cial Sciences, saidChina has a long-stand­ing and ma­ture re­la­tion­ship with Venezuela that has been built up over time.

China isVenezuela’s sec­ond-largest trad­ing part­ner with an­nual trade close to $20 bil­lion last year.

Dur­ing Pres­i­dent Xi Jin­ping’s visit to the coun­try in July, China and Venezuela signed 16 agree­ments cov­er­ing a num­ber of sec­tors, in­clud­ing en­ergy, min­ing, fi­nance, in­fra­struc­ture, agri­cul­ture and high-tech.

“The past year has seen both coun­tries har­vest fruit­ful re­sults in prag­matic co­op­er­a­tion in var­i­ous fields. Cur­rently, all the re­pay­ment of cap­i­tal and in­ter­est re­gard­ing the loans bor­rowed from China is go­ing on nor­mally,” Hua said.

Venezuela earns 96 per­cent of its ex­port rev­enue from oil, but the oil price on global mar­kets hit a five-year low this week.

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