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China has agreed to give $20 billion as loan to Venezuela in exchange of oil supply.
According to President Hugo Chávez, the exchange between the two countries is an effort to make the ties between them stronger.
Extending of loan and other financing agreements with China, along with $12 billion bilateral investment fund, has improved the economic condition of Venezuela.
The export between China and Venezuela includes, Venezuelan oil exports to China, the Chinese launching of a satellite for Venezuela and the sale of Chinese military aircraft to Venezuela.
According to some financial analysts, the loan will solve the cash problem Venezuela as Venezuela could soon face cash crises as it deals with low oil revenues and a lack of foreign investment.
China National Petroleum Corporation (C. N. P. C.) agrees to form a venture with Venezuela's national oil company to explore oil in southern Venezuela. The companies could produce 400,000 barrels of oil a day in that area.
According to Venezuela's energy minister, Rafael Ramirez, C. N. P. C. will have to pay $1 billion to carry forward this venture to next step.
China is emerging as a new market, while United States is the top buyer of Venezuela's oil.