(CARIBBEAN NEWS NOW) — China has agreed to extend a $5 billion credit line to cash-strapped Venezuela, as President Nicolas Maduro headed to Beijing, Bloomberg News reported.
Venezuelan finance minister, Simon Zerpa, told Bloomberg that Venezuela would repay the loan with either cash or oil. The two countries were also expected to sign what Zerpa described as a strategic alliance on gold mining.
Maduro is seeking additional Chinese support to weather an economic meltdown since oil prices collapsed nearly four years ago that has led to civil unrest and the collapse of the country’s currency. Maduro has halted most payments on Venezuela’s foreign debt and owes more than $6 billion to bondholders, cutting off most sources of new financing.
China has been a key lender to Venezuela since 2008, when it first provided funds for infrastructure and oil projects in the country, Bloomberg noted.
China has lent an estimated $70 billion in several installments, most to be paid back in oil, according to Asdrubal Oliveros, director of Ecoanalitica, a consulting firm in Caracas.