CARACAS, Venezuela, March 25 (UPI) -- A Chinese pledge to build and finance 20,000 homes in Venezuela has dismayed Venezuelans because the deal demonstrates the country's dependence on foreign expertise for simple technologies and President Hugo Chavez's continued borrowing spree.
Critics of the Chinese deal say they aren't against the Chinese arriving in large numbers to build and deliver the housing units, part of the president's overall plan to secure re-election, but they do oppose heavy borrowing and lack of substantial technology transfer arrangements.
Venezuela has a chronic housing shortage with up to 2 million of its 26 million people population in need of shelter or improved housing.
Venezuela signed an agreement with Chinese companies Citic Group and Industrial and Commercial Bank of China Ltd. to negotiate a $4 billion loan to finance housing and construction projects.
Citic International Contracting Inc., a unit of China's state-owned Citic Group, will build the 20,000 housing units and start a joint venture with Petroleos de Venezuela S.A. to operate mature crude fields, Chavez announced on state television.
Chavez has boosted oil shipments to China to repay billions of dollars in loans destined to finance infrastructure projects in the country.
Critics say the government should do more to strengthen Venezuela's manufacturing infrastructure, build industries relevant to the construction industry, such as cement and steel, and train more Venezuelans into jobs that will have to be performed by the Chinese.
Venezuela is in recession for a third consecutive year, although officials insist the economy is going to move out of a low-growth cycle. The recession gave the oil-rich nation the odd distinction of having a shrinking economy and declining crude oil production.
Venezuela expects to increase oil exports to China as part of multiple deals with Beijing.
"We have all the oil that China needs for years to come right here," Chavez said during a meeting with members of a delegation of Chinese companies.
Venezuela's Oil Ministry says the country has 296.5 billion barrels of crude oil reserves, citing figures at the end of 2010. Several new projects under negotiation could increase that estimate of reserves, industry sources said.
State oil company PDVSA said it was considering collaboration with Citic to pump oil out of mature fields that have current production of about 50,000 barrels a day in the northeastern Anzoategui state. PDVSA Vice President Eulogio Del Pino said in a state television broadcast that talks with the Chinese were continuing.
Bilateral trade between China and Venezuela rose to $8.85 billion in 2009 from $250.4 million in 2000, state-run trade bank Banco de Comercio Exterior said. Figures suggested the trade balance was heavily in favor of China but there was little evidence of Venezuela trying to revive industries hit by the recession, the 2009-10 drought and power shortages and several years of neglect that followed a wave of privatizations.