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China, the Fierce Partner

In two countries of "Bolivarian" regimes, Ecuador and Venezuela, Chinese investment has found avid business partners over the last ten years. The Asian giant has injected vast financial resources and resources for infrastructure works into both nations, many of them unfinished. But the other side of the coin is the conditions imposed on the partners in draconian contracts that the Chinese entities and companies have subscribed by their local counterparts. In the height of the 21st Century, the foreseeable power of the future imposes terms and conditions of the 19th Century, like the suspension of labor laws, importation of labor, exclusive use rights, more expensive financing, payments in foreign currency, among other nineteenth-century privileges.

10/22/2017 11:07:22 AM

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The aggressive expansion of China in Latin America has marked the last decade. Ecuador and Venezuela have been two of the main destinations for Chinese financing, technology and labor in the region. The alliance took shape in Venezuela with the creation of the Venezuelan Chinese Fund, from which the government of the self-styled Bolivarian Revolution awarded millionaire contracts to Chinese companies for the execution of infrastructure works, housing construction or constructions for the electrical system, among other areas. Meanwhile in Ecuador, the close relationship with China marked the ten-year management of Rafael Correa, who has just left power. Seven out of ten works in that period were performed by a Chinese company, almost always tied to financing by a Chinese bank. Some of these projects, both in Ecuador and in Venezuela, are today failed projects. The review of some of these agreements shows the "fine print" and the requirements imposed by the Chinese when doing business with these countries.