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Renita Jablonski: Venezuela’s Hugo Chavez is in Beijing today. The two countries have been talking tough against the U.S. and its lead role in the global economy. But as Marketplace’s Scott Tong reports, what they’ll really be talking about is oil.
Scott Tong: Chavez is cultivating a growing partnership with China. Beijing just agreed to put $8 billion into oil exploration and other projects in Venezuela, which in return will triple its oil exports to China.
David Zweig of the Hong Kong University for Science and Technology says Chavez is diversifying away from his chief oil customer, the U.S.
David Zweig: So he’s a firm believer that China’s rise is a terrific thing for the world.
China right now is the top market for new cars. So its leaders are shopping for oil everywhere.
Zweig: One of the things the party is using to cement is political survivability is to buy off the middle class by letting them buy cars.
So, does this alliance cut off Venezuela’s oil for everyone else? Maybe not: Beijings’s investment in oil exploration there may turn up more crude for the world. And the more China buys from Caracas, the more that’s left elsewhere for someone else.
In Shanghai, I’m Scott Tong for Marketplace.
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