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China ‘confident Caracas can handle own debts’

Beijing won’t restructure loan payments despite Russia agreeing new relief deal

CHINA will not restructure loans owed by Venezuela, despite Russia agreeing a change on Wednesday.

China’s Foreign Ministry said that it was confident Venezuela “have the ability to appropriately handle their affairs, including the debt issue.”

Venezuela owes China $23 billion (£17.5bn), out of a total of about $140bn, primarily as a result of oil-for-loans deals.

Chinese spokesman Geng Shuang said on Wednesday that his country’s co-operation with Venezuela was “proceeding normally.”

The restructuring Caracas agreed with Russia is for a smaller amount, $3bn, which will allow Venezuela to meet obligations to other foreign creditors.

Repayments will be “minimal” for the first six years of the 10-year deal.

Ratings agencies have this week declared Venezuela to be in default on several international bonds, worth roughly $60bn. Venezuela is trying to restructure that debt.

However, that is complicated by extreme financial sanctions levied by the United States which bar the country’s banks from being involved in such deals.

While the country’s economy has bounced back recently in large part due to increased oil prices, it has been hampered by US and now EU sanctions, as well as a rampant black market for US dollars that has fuelled inflation.

Venezuelan Foreign Minister Jorge Arreaza convened a meeting on Wednesday of ministries and other institutions to debate their response to EU sanctions announced on Monday.

On Tuesday Mr Arreaza met ambassadors from EU member states to demand an end to the unilateral economic measures, saying they adversely affected the Venezuelan people and were a setback to talks with the Western-backed opposition.

“How does this help dialogue?” he asked. “How does this help Venezuela? How does this help the people?”

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