Venezuela’s President Nicolas Maduro is meeting with the top Chinese officials, including President Xi Jinping, as the socialist leader of the troubled Latin American oil producer is looking to convince China to provide new loans to plug some of the widening gaps in Venezuelan finances.

In one of many tweets on Thursday praising China and its communist founder Mao Zedong, Maduro said that the two countries will boost economic, trade, energy, financial, political, and cultural ties.

Over the past decade, China has reportedly lent around US$60 billion to Venezuela, most of which constitutes loans up front in exchange for future Venezuelan oil deliveries.

But Venezuela’s economic and oil industry demise was expected to result in its crude oil exports to China plummeting this summer to their lowest level in almost eight years.

In July, China’s Development Bank was said to have approved a US$5-billion loan for Venezuela’s oil industry, Bloomberg reported, quoting the troubled South American country’s Finance Minister Simon Zerpa.

“We’ve received the authorization for a direct investment of more than $250 million from China Development Bank to increase PDVSA production, and we’re already putting together financing for a special loan that China’s government is granting Venezuela for $5 billion for direct investments in production,” the official said.

The loan was a lifeline for PDVSA, which has been unable to stop an accelerating production decline resulting from years of mismanagement and a cash crunch brought about by the tightening grip of U.S. sanctions.

Over the past month, Maduro has been touting a new plan for economic recovery, which includes a new policy on gasoline pricing that would raise Venezuela’s ultra-cheap gas prices for the first time in two decades. The plan to ease the severe economic crisis also featured a devaluation of the currency and pegging the new bolivars to the government’s cryptocurrency El Petro, which Venezuela claims is backed by its oil reserves and which analysts think is just a scam.

By Tsvetana Paraskova for Oilprice.com

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