Venezuela: Her journey till now and China ties.

The Bolivarian Republic of Venezuela, more commonly referred to

as Venezuela, stands proudly along South Americas Caribbean
Coast, bordered by Brazil, Guyana and Colombia, with a
population of about 29.52 million. Her chief export commodity is
crude oil, which accounts for 93% of their total exports. For this
small country, whose livelihood is basically dependent on its oil
reserves, the rise and fall of the oil prices had to affect her
economy. Unfortunately, this indeed did make the country see
though some very difficult times, whose aftermath is still seen
today.
Venezuela was primarily an exporter of agricultural commodities
such as coffee and cocoa. When her vast oil reserves were
discovered in the early 20th century, Venezuela quickly took over
the market and dominated in oil exports. These happy days didnt
last for her as the 1980 Oil Glut affected the whole world,
including this nation.(This oil glut in world markets was the result
of at three mutually dependent dominant forces: high oil prices,
increase in production, and reduction in demand.) This lead to an
economic crisis, which saw an inflation peak of 100% in 1996, as
well as poverty rates going up to 66% in 1995 in the country. It
also saw Venezuela experience a major banking crisis in 1994.
Thankfully, the recovery of oil prices after 2001 boosted the
Venezuelan economy and facilitated social spending which
significantly reduced inequality and poverty. Post this, the country
did see many more hurdles, like the 2008 global financial crisis.
Currently, Venezuelas inflation is at 62% (as of 2014), which is
the primary cause of the 2014 Venezuelan protests.

The Peoples Republic of China is making progress in huge strides.

In September 2013, China became the largest importer of crude
oil. Her oil needs were met by countries like Iraq, Iran and Africa.
Chinas demand for black gold is only set to increase, predicted to

spend a whooping $500 billion a year on imports by 2020,

according to Wood Mackenzie. On one hand we have Venezuela, a
country gifted with the worlds second largest reserves, but a
chaotic situation at hand, whereas on the other hand we have
China, with all the need for this reserve and more than
empowered with the money to get it.
On 22nd July, 2014 Chinese President Xi Jinping signed a raft of oil
and mineral deals with Venezuela. The deals spanned a range of
sectors from oil to infrastructure and included $4 billion for a joint
development fund, $691 million to explore Venezuelas gold and
copper reserves and an agreement to develop the countries third
joint satellite. Conclusively, the cash-for-oil swap that Venezuela
made with China, will definitely benefit both countries as it meets
with their current demands of funds and crude respectively.

NOTE: Venezuela has the least expensive petrol in the world

because the consumer price of petrol is heavily subsidized.