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Exclusive: Venezuela in talks with China over support amid pandemic, oil price drop – sources

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Venezuela has opened talks with China over possible financial support to cope with a sharp drop in oil prices and the arrival of the novel coronavirus, four sources familiar with the negotiations said.

FILE PHOTO: China's President Xi Jinping (R) speaks with Venezuela's President Nicolas Maduro in front of a statue of Venezuela's late president Hugo Chavez during a ceremony in Caracas July 21, 2014. REUTERS/Carlos Garcia Rawlins/File Photo

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CARACAS: Venezuela has opened talks with China over possible financial support to cope with a sharp drop in oil prices and the arrival of the novel coronavirus, four sources familiar with the negotiations said.

The government of President Nicolas Maduro is hoping to renegotiate oil-for-loan deals agreed nearly 15 years ago under late socialist leader Hugo Chavez, when the two nations developed an economic alliance built around oil shipments.

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China halted new loans several years ago as Venezuela's economy descended into a hyperinflationary collapse, but Beijing has maintained diplomatic ties with Caracas and openly opposes Washington's oil sanctions against Maduro.

The talks were initiated by Maduro's government and are ongoing, the sources said.

"Without (China), we are left helpless," said one of the sources, who asked not to be identified because they are not allowed to speak publicly about the issue.

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Venezuela's information ministry and China's embassy in Caracas did not respond to emails seeking comment.

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Venezuela is considered to be highly vulnerable to coronavirus due to constant blackouts in many parts of the country as well as the lack of running water and medical supplies in public hospitals.

Maduro has called for U.S. sanctions to be lifted to improve the country's health system.

Last week, his government asked the International Monetary Fund (IMF) for US$5 billion in financing to confront the virus – a request that was flatly rejected, as several member governments including the United States, recognize opposition leader Juan Guaido as Venezuela's rightful leader.

Maduro's government is instead counting on significant support from China, said the sources, adding that Maduro had already begun talks with Beijing when he made the request to the International Monetary Fund. Caracas has no official channel of communication with the multilateral lender, the sources said.

The IMF did not respond to a request for comment.

Maduro's government is seeking a grace period on loan payments, one of the sources said, possibly one that is similar to an arrangement created in 2016 under which Venezuela for over a year made interest-only payments on the loans.

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