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Chavez Says China Bank Agrees to Loan Venezuela $4 Billion

Venezuela’s President Hugo Chavez said a Chinese bank agreed to loan Venezuela $4 billion that will be used for housing construction.

Oil Minister Rafael Ramirez signed the agreement during a recent trip to Beijing, Chavez said today on state television. Chavez, who in June underwent surgery to remove a cancerous tumor, last week cited needing to attend to an emergency caused by heavy rains for canceling visits to Argentina and Brazil in what would have been his first official trip since announcing he had cancer.

“Yesterday in Beijing an agreement was reached for a new loan of $4 billion from another Chinese bank for Venezuela, mostly to build housing,” Chavez said in comments broadcast on state television. The president has made solving Venezuela’s housing deficit of more than 2 million homes a cornerstone of his campaign for re-election next year.

Venezuela currently sends China about 400,000 barrels of oil a day to repay about $32 billion in loans negotiated through the China Development Bank. Chavez has said that forming strategic alliances with countries such as China and Russia is critical to his attempts to foil what he calls U.S. hegemony in the region.

Heavy transport aircraft purchased from China will arrive in Venezuela soon, Chavez said today. The former paratrooper said he was obliged to turn to China after the U.S. blocked him from obtaining spare parts for the country’s fleet of Hercules planes.

The U.S. in May 2006 ended all commercial arms sales to Venezuela, saying the country hadn’t done enough to fight terrorism, and has urged other countries to do the same.

To contact the editor responsible for this story: Charlie Devereux at cdevereux3@bloomberg.net

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