Princess of China


El Nacional continues with its reporting on the push to get China to provide new financing for the Bolivarian Revolution. In a rambling article by Andrés Rojas, we learn, among other things, that:

  1. Hugo Chávez originally wanted a whopping US$120 billion, but got $20 billion instead.
  2. Aside from the usual suspects (Giordani, Ramírez, etc.), the point person for the day-to-day handling of the China deal is an obscure chavista bureacrat, BANDES President Edmeé Betancourt. So many billions of dollars flying around with no transparency – must be good to be Edmeé.
  3. The Chinese are livid because oil production in the Orinoco has not ramped up as promised. PDVSA was simply too busy handing out shoddy apartments.
  4. Rafael Ramírez denies that a new loan was even on the table, but even if it was, it would be “for the benefit of the people.”
  5. Oh, and to top it all off, CITGO renewed its contract to give low-cost heating oil to 1.7 million people in New England, thanks to the haggling of a Kennedy.

So let me get this straight. The Venezuelan government basically:

  • asks people for money, and gives the fabulous returns to their investments;
  • needs increasing amounts of people to lend them ever-growing amounts of money just to continue its operations;
  • has no transparency; and
  • its investors know this can’t last, which is why the risk premiums for our debt are so high.

En dos platos, the Chávez government is a Ponzi scheme.

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  1. What scares me about the piece is that it shows that China is the final remaining source of “accountability” for the government: the Chinese can’t be bullshitted, can’t be cowed and can’t be snowed under a torrent of Sunday talk show bla bla bla. They’re just not going to throw good money after bad – and so they’ve become the last restraint we have!

    • Not doubting that it’s tempting to ask big of a wealthy client who wants as much product as you can make, and is willing to front you generous amounts of capital in advance of future production.

      Let’s factor in a few more points. Venezuela is pretty unique in that it can supply increasing shiploads of oil to China over the next few decades. We’ll see clearly how valuable this relationship is to China once global production starts to decline.

      So, although China might have a limit on the advance payments it is willing to make, it’s still arguably the most important investment China have on the table. All Venezuela needs to do is hurry up and ramp up, and they can have their extra $100bn.

      • One minor issue with this notion. Venezuela discounts the oil it “sells” to China as a means of payment for its loans. Call the difference interest if you will, or a future value mark, but either way, it is below market value. In other words, Venezuela is tossing away its future revenues for money today at a significant cost.

        So, why do they need their extra $100 billion if they can generate those revenues through the nominal oil market at a lower opportunity cost? Why not invest heavily in the production and expansion of the oil industry so they don’t have to rely on extra-market financing?

        As more and more of your revenue is obligated, your ability to utilize discretionary spending shrinks. You become caught in a trap of diminishing real returns on your revenues (such as infrastructure and economic growth) because you desired to spend today. Congratulations and welcome to the same trap as the developed world with none of the benefits.

        Why justify the benefits of the deals with China when, all things considered, Venezuela shouldn’t need the deals with China? That’s shysterism at its finest.

        • Industrialised nations will need to transition to renewables long before Venezuela peaks.

          Basically, the more advance cash Venezuela can get, the faster it will develop infrastructure, the more it will be able to produce besides oil, and the sooner we can start talking about capitalism in the past tense.

          • So, you are basing that assumption on the long term price of oil falling to such an extreme that production isn’t viable/profitable?

            Aside from issues as various as peak oil theory to Hotelling’s rule which would seem to indicate otherwise over the long-term, let alone the short-term…do you honestly believe that the market will subside so much that throwing away revenues now as opposed to future revenues down the road (look at the statistics for renewables and see just how far out they really are) is justifiable? I hadn’t realized socialism’s discount was so astoundingly high that this would make sense. Though that discount rate would explain the interest rates that socialism in the guise of Chavismo is willing to borrow at…

            I’ll grant you there may be a short term lull in oil prices (12-24 months) related to business and economic cycles, but your notion that oil (or any other non-renewable resource, for that matter) prices will drop consistently and permanently over the next few decades flies in the face of pretty much every economist, financier, government policy analyst or other mathematical modelers.

          • No, I grant that oil prices are going up in the long term. But Venezuela has far too much oil to be worrying about losing money while their production is a quarter of what it could potentially be.

          • Fair enough. But the lapse in production is solely the fault of those doing the borrowing. Instead of developing and maintaining existing infrastructure, they are spending it on giveaways (Wansui Haier!) and imports. Thus production decreases which requires more expenditure and less revenue and we end up with a vicious feedback loop.

            As the production facilities deteriorate, rationally, they might borrow in the short term to solve the problems and increase production, but they don’t which is confounding. Its no different than having a mountain of solid gold, but ignoring it to prospect for copper, which by all indications only exist in trace amounts in the mountain next door..

          • “Basically, the more advance cash Venezuela can get, the faster it will develop infrastructure, the more it will be able to produce besides oil…”

            Given the deterioration of infrastructure in Venezuela under the rule of Chavismo- both within PDVSA- and in the non-oil part of the Venezuelan economy, such as roads and bridges, it would appear that the “advance cash” that Venezuela has thus far gotten has gone for anything but infrastructure. Which shows your statement is but stand-up comedy.

          • What does renewable energy have to do with oil consumption? A switch to electric cars and coal energy is the more likely way that most of the world will move away from oil, since nuclear energy has seen limited investment outside of China (and even they are only catching up with the rest of the world on nuclear energy). Renewable energy is neither here nor there when it comes to oil consumption, just look at Germany.

          • “Basically, the more advance cash Venezuela can get, the faster it will develop infrastructure”

            Really? Um, really? Do you honestly believe infrastructure has been ‘developed’ during the last 13 years, let alone developed at a rate remotely on scale to the tons of petrodollars that have been pouring in?

            Discounting future oil at such a level and on a regular basis, short of a war or national emergency, is foolish and sacrificing long term resource wealth for short term benefit. The oil belongs to the Venezeula people, not the PSUV. Luckily for the leaders of the Revolution, most Chavistas have no clue that this is happening (or even care as long as they get their handouts), so there is no pushback other than the impotent rage of those who can’t fathom a government resorting ever more often to such measures to pay their bills.

        • ” Venezuela discounts the oil it “sells” to China as a means of payment for its loans. Call the difference interest if you will, or a future value mark, but either way, it is below market value”

          It is not true. Please refer to Miguel Angel Santos (

          “Ahora bien, una proporción de la factura petrolera de los envíos a China se destina a servir la deuda de Venezuela con ese país. En principio, se estableció que por cada barril de petróleo, cuarenta dólares vayan a amortizar capital y pagar intereses, y la diferencia queda disponible para Venezuela en la cuenta de la ONT en el Banco de Desarrollo de China. De allí surgió la idea equivocada de que “esos barriles nos los compraron a cuarenta”, en lugar de a precios de mercado. Los efectos sobre nuestro bienestar no van por ahí. “

          • While the article is accurate, the net cash flows are actually different and Mr. Santos notes that by having to exclude some numbers that can’t be rectified. The shipments are listed at market value solely for risk mitigation and legal purposes.

            The takeaway from the article should be this: The oil is purchased, but the funds, for all intents and purposes are cycled in China and ultimately what comes out is, in effect, not what went in to the accounts. This is where the discount applies…or call it whatever you wish.

            How? Well, beyond the interest alone, imagine that the Chinese have creatively added administrative fees, transfer fees, cross-border surcharges, maintenance fees, go along at every step, every day, on the way. I’m not talking a paltry $3.00 ATM charge either. It is billions that are effectively leeched away resulting in a substantial real discount before Venezuela ever receives its funds. These fees are the equity kickers that the Chinese receive for making these loans.

            To bring it to a more microeconomic level… Imagine if you made a contract with your employer to use them as a bank for all intents and purposes because you want to make a large purchase like a mortgage and you don’t want to freak out your other creditors, so they agree to “loan” you the funds and this gives you cash and a bit of off-the-books borrowing. So they set up parallel accounts and give you a reasonable interest rate of 3%. However, as part of the agreement, you have to give them 3% of each paycheck as a “handling” fee at the “bank”, then a 3% fee to transfer that money to pay the loan, oh, and lets not forget the capitalization of the 5% maintenance charge on the outstanding loan amount every year. Did I mention that there’s the .5% surcharge for transferring your check to a currency, because your employer’s headquarters is in another country, and then another .5% when they transfer it back? Oh, and lets not forget the origination fee for the loan to cover all those pesky legal fees and valuations and market analysis, that should be, what 3%? It goes on and on. And in the end, after its all said and done, the deal doesn’t seem quite as good as it originally sounded. What is your real cost of capital in this scenario?

            Fun thing about finance: There’s about a million ways to skin a cat, all are legal and all can be masked from an accounting perspective by creatively naming them one way or another.

            And that’s not attacking the other side of the equation. Namely, the funds must largely be spent on Chinese contracts, goods and companies at rather inflated prices (the analogy continues with the “Company Store” motif). Ever wonder why Haier has become so ubiquitous? How’s that high speed rail going? Ask the workers…they might not respond to “hola chamo”, but I bet they will to “nihau!”

          • Well said. The Chinese are not fools, they will not throw the fruits of literally billions of hours of labor away. Chinese officials might do it to enrich themselves, but the government is not going to sign off on a bad deal to benefit some hapless Venezuelans. You can bet China is winning either way in Venezuela, both in securing a market for Chinese goods and locking in oil supplies for future years.

          • The strictly financial part of the transaction may be all right ( we really dont know enough to judge ) , Our doubts have to do with the following kind of issues :
            1.- how is the price of the oil set to ensure that it is at least equal to the price which Venezuela would get from selling it to other markets closer to home ( its a long expensive trip from Venezuela to china , who pays for that? ) .
            2.- if the purchase price is put on hold in some chinese bank until it become disbursed , how long is that money on hold , is venezuela adequately remmunerated for keeping that money in a chinese bank , what if that money is needed in Venezuela at the time its on hold , does Venezuela then have to go out and get an expensive loan to cover the resulting deficit?
            3.- are the moneys in the chinese bank used to fund projects that really benefit Venezuela or rather the Chinese interest in these Projects. ( projects can be structured to benefit one partner more than the other)
            4.- If china conditions the disbursement of these loans to the hiring of chinese contractors or suppliers ( as is the case) are the terms under which these contractors hired as good as Venezuela would have been able to obtain from hiring it under competitive bid conditions to other contractors or suppliers , is chinese technology always the best suited to our interests.? are Chinese Contractor fair in their prices or do they extravagantly overcharge the Venezuelan Projects??
            5.- How much of the funds are used to build projects in china (just because the oil used in them comes from Venezuela) ??, who controls the operation of these projects operationally commercially managerially , chinese or venezuelan interests. Who benefits the most from these projects ?
            Minister Ramirez said that the balance of Venezuelan oil sale revenues on hold in Chineses banks was 26 Billion USD favourable to Venezuela ( after paying the current loans) , is this situation in the best interests of Venezuela ?? He recently asked for a 500 million USD advance on this money and was rebuffed . does this say something about what these arrangements mean for Venezuela .
            I am rather concerned that looking at the overall picture , Mr Chavez infantile infatuation with the Picture BooK Memory of the former Red China might have forced his minions to pleasure him by entering into deals which where much more favourable to China than to Venezuela . Perhaps someday Ill stand corrected , but I doubt it!!

          • I’m sure the deal Venezuela got from China for any infrastructure was at inflated prices. Chinese construction firms don’t underbid each other since they all work together in a China Inc. model, just as the Japanese used to. Only when competing with foreign competitors do they offer their most cut rate prices:


            The road in Poland didn’t end up getting finished (more due to Chinese confusion about local regulations), but it shows how low Chinese construction firms are willing to go when pressed. I haven’t heard about any such competitive bidding process happening in Venezuela.

  2. Very nice thing to say, Sara Zervos: “Chavez hasn’t done a lot of good for his country, but he has the objective to service the bonds. Our interests are aligned.”

    Don’t know what to think….

          • That was a great comment of yours above. I asked an old friend of mine once how china became so adept at corrupting its overseas partners. Having grown up a Brit in shanghai prior to the communist takeover his answer was simple: they learned from us!

          • yes, yes, the sun never sets on the British Empire … pass the port.
            As a civilization, the Chinese were way older, more developed than the Brits, even long before the Roman conquest of Britain. Doubt the Chinese had much to learn from the Brits, who in turn, had nothing of substance to offer after withdrawal of the Roman occupation, nor 1000 years later, when Marco Polo canvassed trade routes in the medieval era.

            #squashing delusions, even in jest

          • Actually, I would argue you are both correct.

            Wait, what? Two mildly opposing views both being accurate on Caracas Chronicles? The devil you say!

            Chinese bureaucracy and systemic corruption go back centuries, however, “modern” finance via banking systems (which, admittedly, were pretty much developed in their current form by the British after learning from the Italians) is relatively new to them and still not widely adopted within China.

            I say this insomuch through my recent experiences mentoring and teaching a number of Chinese nationals that were sent locally for that express purpose at a local private college…and they are just one group of many that I am aware of at the local universities. Some were funded by family, but the majority were on state scholarships not so different from the Venezuelan programs designed to bring back lacking skill sets.

            These kids are bright. They struggled initially with minor things, like double entry bookkeeping, non-cash expenses like depreciation, and modeling pro forma statements, but once they had the concepts down, they rocked the American students. Most of the gringos opt for soft business degrees, marketing, management, international business, but the Chinese were pretty focused almost exclusively on accounting, economics (numerical analysis rather than just theory) and finance to such an extent that they made up about 50% of the majors. And they had better GPA despite not being extremely fluent in English.

            In some long, and often late night conversations, most of them had low-level jobs lined up at home when they finished school. When I asked why they would travel so far for an education only to go back and take a peon job in the bureaucracy, almost without exception they stated that with a Western education in business, they would be fast-tracked within whichever governmental apparatus they worked for because it was considered a sizeable advantage (along with English) in dealing with outsiders and managing money, and developing the next stage in the needs of their nation, which was a serious financial structure.

            I gather, from their discussions, that the laborers you are seeing in Venezuela are typically surplus extremely low-skill laborers with family at home that are essentially part of the external cashflow generation machines that send resources back to China and spend next to nothing in the host countries. This minimizes the costs of the projects for China and has little “leakage” with the money all flowing back to China.

          • Interesting first-hand experience, piti. Thank you for that credible account. The only student from China I ever met was around 1972. He was studying sciences at McGill and living in my brother’s dormitory. Well fed, rosy cheeked, wearing the Mao suit, day in, day out, the young man was sweet. I imagined he might be the son of some apparatchik, for lack of a Chinese label. And yes, he went back to China, after his studies.

          • Funny thing and kind of off-topic:

            Those who are family-funded typically want to go back, primarily because they come from wealthy backgrounds. The others generally want to stay here because they see greater personal opportunities, but given stupid Norte Americano immigration laws, once they acquire skills that would make them valuable contributors to the society, they still have to leave once the F1 visas expire. A few do get picked up on work visas; I can think of a half-dozen that have been picked up by financial firms with most going to Goldman.

            I like working with them by and large. Their interpersonal skills are noticeably lacking, at least as far as Western standards go…and presentations tend to be by-rote-horror-shows, even counting for their ESL handicaps. However, their quantitative skills are pretty impressive once they get the rules and parameters down. The only real downside is that they have a hard time innovating or coming up with something completely out of the box and are prone to groupthink; in this case, the family-funded kids generally excel beyond the state-funded kids at escaping the pitfalls. The first can be taught, the second requires a bit of innate brainpower and a lot of effort; the last might be tied to the wealthier kids being a bit more free from cultural constraints of norms.

            In any event, I’ve been pretty astonished by what I’ve seen from them even though I find it a bit disquieting that I’m helping train future international competitors. Meh…not like we haven’t been doing that for years anyway.

  3. Quico, I’m surprised you didn’t make a comment about how the Rojas article is written up. El Nacional does it again, y eso que te la puse de bombita!

  4. What is the total amount of debt owed to the chinese? Is it 36 billion? or 20 billion? I’ve also seen a 42 billion number being tossed around…

  5. FYI, Edmee Betancourt is Ministra de Comercio.
    And I think she was also a minister at some point en la cuarta (maybe with Lusinchi).

      • I’m sure its a negotiating tactic along the lines of “I will gladly pay you Tuesday for a hamburger today” variety.

        The ironic part of this is that it is exactly the same ploy in reverse that the Chinese use to extort better terms in Africa according to a colleague of mine who specializes in the AME markets.

      • Because PDVSA hasn’t fucked up the environment enough, let’s add Chinese to the picture. I can’t even imagine the environmental repercussions of this.

  6. In your pathetic infructuous efforts to contribute to the destablilization and discredit the Venezuelan government, you always resort to manipulation and lies. If your arguments were correct or had any basis in trith you would not need to lie and manipulate.

    Last night Ramirez gave an extensive interview about the Chinese deal. What you state about Chavez wanting $120 billion is fantasy on your part – in other words lies invented for whatever obscure reason. The two Chinese funds have a total of $36 billion. These are for infrastructure of all types. The fund is continually topped up as it gets used and as it is paid off by oil shipments, which by the way are at international prices. So the $6 billion of “new financing” that has been mentioned in the local fascist media is no more than a top up – as this is a revolving credit with China.

    The allefed complaints about the orinoco oil belt are more fantasy. No Chinese offical has made any comlaint as Venezuela is delivering the oil to China it was contracted to do. In any case – the longer the oil stays in the ground, the better for future generations.

    The deal for Chuina is excellent as it is for Venezuela and has allowed China to displace the US as the main trading partner with South Amewrica which is no bad thing as we want the war mongering killer gringos out of here.

    And yes – Cort Greene is 100% correct. All this is a Ponzi scheme as is the cpaitalist system which is based on debt and as such is a Ponzi scheme as not enough money is generated out of thin air to cover the interest. Hence, China and Venezuela are just foloiowing the rules of the game as are ther abil outs in the US and Europe.

    And stop dreaming – Venezuela will not go bankrupt as will Spain. Italy, UK, Greece and Portugal in the eurozone. Our debt is far too low as a percentage of GDP.

    • I heard directly from Chinese involved in the first deal that Venezuela requested $120 billion. Rojas apparently heard the same. You are there, without doing any reporting, trying to make out like this never happened, trusting the word of a government minister. Whose sources are really more credible here?

      Second, the money is not for “infrastructure of whatever type.” Half of the most recent loan was exclusively in Chinese currency, meaning it was destined to buy from Chinese manufacturers. This is very much like the abusive loan practices of the 1970s by the US and others, rightly denounced by the international Left. Now that Hugo Chávez says it’s cool, the Left is suddenly enamored of it. Makes sense to me, I mean, why would a president of a country or his oil minister ever lead anyone astray?

      • The abusive loan practices you refer to are stuff like conditions requiring the quicker, cheaper and more streamlined exploitation of the (barely)developing country in question. Not to mention the perpetually unpayable debt which mires said country in dictatorship, corruption and poverty. Usually with US-built armaments to deal with communists.

        So yeah, it helps to read about imperial capitalist exploitation if you want to pretend to be concerned about it.

        Now, this China deal might involve lots of loaned money which can only be cashed in at Chinese state enterprises. Not so much of a problem, since you have more or less infinite choice: satellites, ships, buses, trains, whatever. Even thousands of hardworking Chinese labourers to build whatever you want.

        • China is requiring quicker cheaper and more streamlined exploitation of African nations in return for large development loans, it hasn’t done so yet in Venezuela as it didn’t think it needed to. Judging by Chinese frustration in Faja, it’s clear that will not continue.

          You also amusingly defend loan stipulations that development loans must be spent in the originating country. Precisely that was a traditional complaint about US development loans, and the US produces the same range of goods as China.

          “Perpetually unpayable debt” – Another canard, US development loans are offered at a lower rate than Venezuela is paying on its bonds. Some became unplayable because the recipients took too many loans and spent them on non-productive handouts instead of long term investment (wait, that sounds familiar!).

          • So which African country is China exploiting the hardest? I’ll do the research that you probably haven’t done.

            As for unpayable debt, see Ecuador and the dozens of other countries who are more in debt to the IMF/WB than when they took out the first loan.

          • And? Venezuela is more in debt now than when it got its first loan from China.

            As to China in Africa, every African nation where China has mining projects qualifies as “exploited” in a Marxist world view. China imports skilled labor and finished goods in exchange for minerals, in one tragic case even killing demonstrating workers (the managers were then sent back to China without charges). When the US did that it was called neo-colonialism.

            I’m not saying China is evil by the way, which you seem to be trying to goad me into. just asking for some logic on your part.

    • I’m really confused about ‘wanting the war mongering killer gringos out of here’ which I guess translates into not wanting to do any business with US companies and yet Chevron and other US Service Companies have a very sattisfactory and luchrative relationship with PDVSA , on the other hand if Venezuela wants no business with US companies how come Cuba is desperate to have them , for what else is meant when Cuba raises such a fuzz in atempting the US stop its blockade of Cuba , doesnt that imply doing business with US companies ??

    • Wrong, the longer the oil stays in the ground, the greater the bargaining power of investors. Eventually Venezuela will be forced to back off on ownership requirements as well as royalty requirements for oil projects, just as it did during past Crisis. Chavez is simply steering Venezuela into the same iceberg it has already encountered in the past.

    • And you believe anything Ramirez says? Really? How many oil plans has he announced? How many completed? How many times has he said no more PDVSA bonds? How many times he has issued again? Didn’t he say he did not know about Maletagate but the money was carried to the plane by his assistant? What has Venezuela gained by changing partners? I see no benefit, oil delivered there has to have the same price, we pay part of the shipping. Why borrow money to buy Chinese shit, when you can buy anyone’s shit? Chinese officials DO complain, like not one Fja project has gotten off the ground because PDVSA has to provide infrastructure and 60% of the money. And they cimplined the best way, they refused to advance the money for these projects to pay for PDVSA’s financing. So, there is only one dreamer here: You

  7. I have lived and worked in several countries in West Africa and hve seen first hand Chinese investments, whole areas where total control has been given to Chinese companies to pay back debts incurred. Areas of countires where no African is allowed to enter or work except for those who are paid to clean toilets and sweep the dormitories of the Chinese workers.

    I assume that this is what the Chaverment wants for Venezuela, true soverignty!

    On another topic, two articles that have appeared recently that no one has picked-up on yet. One in today’s Toronto Star about an Iranian that was stopped in Germany and found with a cheque for BsF 300 million. Something sure to make Roger Noriega and gang go crazy. And also the latest article to Rory Carrol in the New Statesmen

    • Venezuela has in fact stood up to Chinese demands to allow more Chinese workers into the country. This is one of the reasons the Chinese were pissed back around 2010. The Venezuelan policy may have changed since then, I don’t know.

      • This is a silly way to frame it, Setty – if they’d delivered on the projects needed to allow production in the faja to rise, neither the Chinese nor anyone else would give a shit if the workers who did the work were Venezuelan, Chinese, Martian or anything else. The point is that they both obstructed Chinese contractors’ plans to actually get things done and then failed to do the work needed themselves.

        • I think there are different eras in this. CNPC originally showed up and wanted to bring in a huge Chinese workforce. Venezuela insisted on the usual labor law in which you can only have about 1 expat per 9 local workers. CNPC sent 2/3 of its workforce home, freeing up lots of space in its building. This all happened early in the post-Paro period, before my time, and I have it on the word of a high-up Venezuelan manager. Then over time, up to at least 2010, China kept wanting to bring more Chinese workers but couldn’t. I think that with the ongoing development failures you mention, China probably did get fed up and started bringing workers regardless (perhaps including those you found in the rail line), plus making those yuan-denominated loans.

          In any event yes, it makes no sense to insist on Made in Venezuela while crippling Venezuelan Makers.

    • That’s how they want it in British Columbia. It is pretty interesting how transparency has become something of an issue for the government of Canada in the HD Mining case. Who are our elected leaders accountable to again?

  8. This blog is really about three things , one, how come Venezuela despite its huge oil revenue has become so dependent on Chinese loans to cover its expenses, two: , what are the merits and disavantages of the kind of loan arrangements which Venezuela has made with China , three how come the Chinese have become suddenly reluctant to continue the open funding of the regimes expenses . The answer to each of this question is an indictment of the regimes ability to manage the country’s resources in Venezuela’s interests , one , we need Chinese loans because the government is so wasteful and inept and spendrift in the handling of Venezuela’s oil wealth that it huge revenues are never enough , second , there is evidence that Chinese loan arrangements are very likely deleterious to Venezuelas interests and very profitable to Chinese interests, three. the incapacity of Pdvsa to deliver on the commitments it made to allow the advance of chinese sponsored investments is so flagrant that the chinese are having second thoughts about continued their open ended funding of the regime .
    There is one added factor that no one has mentioned in these discussions and which might deserve more attention . Chinese capitalism is the most primitive of all capitalism , they are known to be utterly unscrupulous and ruthless in advancing practices which decent business people frown upon , they normally have no qualms at greasing palms , paying bribes and making corrupt deals with local (boliburgesian ?) interests ( through subcontracts or project alliances) in return for favours that give them priviledged access to a projects ‘cookie jar’. The regime keeps a tight lid on any detailed information about Chinese funded projects so as to discourage any investigation of how they are structured or whom they favour . Nowithstanding that, people that for whatever reason get close to these projects notice things that don’t seem quite right . This is a source of concern and yet for lack of enough hard public data never gets any attention . Maybe its time it should !!.

    • I recently had an Asia Pacific-based oil broker tell me that Chinese state oil companies will not sign any deal that doesn’t include commissions to the executives on the Chinese side (aka kickbacks). He knows that because he dealt with them before moving on to other Chinese state industries that also require commissions.


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