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China Plays Wildcard in Bets on Venezuela Bond Default

Updated on

For debt investors betting Venezuela will default this year as oil slumps, there is one big wildcard that threatens to sink the trade: China.

The Asian nation, whose $3.9 trillion in foreign reserves are the world’s largest, has a history of lending out money to Venezuela, having doled out $45 billion over the past decade. And it has a strong incentive to provide more -- Venezuela sits on the world’s biggest oil reserves while China is the top crude importer.