Research About Economic And Trade Cooperation Between Venezuela And China And It's Effect On Venezuela's Economic Growth

Since the establishment of diplomatic relations in 1974,Venezuela and the People's Republic of China have maintained good bilateral relations.Thanks to the joint efforts of the governments and social organizations of the two countries,economic and trade cooperation between the two countries has been steadily advanced,and exchanges in the fields of energy,investment,science and technology,culture and education are increasing.After Chavez took office,in order to get rid of the control of the United States,he implemented a diversification strategy for oil exports and actively sought new partners.At the same time,China is in the golden age of rapid development,with huge demand for energy and raw materials.The two countries took this opportunity to conduct in-depth cooperation in oil and gas development,science and technology and finance in the principle of mutual benefit and win-win cooperation,and the bilateral economic and trade cooperation entered a new chapter.Especially since the beginning of the new century,the economic and trade cooperation between the two countries has been a qualitative leap.At present,China has become Venezuela's second largest trading partner and the second largest oil exporter in Venezuela.By the end of 2016,China had issued more than 60 billion U.S.dollars in loans to Venezuela.The cumulative investment in Venezuela exceeded US$4 billion.In recent years,the economic and trade cooperation between Venezuela and China has been developing rapidly,which has exerted a huge impact on the economic development of Venezuela.However,few scholars have studied the economic and trade cooperation between Venezuela and China.The study of economic and trade cooperation between Venezuela and China can not only fill the academic gap,but also has great practical significance for Venezuela.Firstly,the promote and influence mechanism of Venezuela's economic development can be clarified.Secondly,it can clarify the achievements and existing problems of bilateral economic and trade cooperation,and put forward reasonable Suggestions on the existing problems,so as to achieve long-term and stable development of bilateral economic and trade cooperation.Finally,we can refer to the experience of China's economic development to provide reference for Venezuela's economic development,in order to help Venezuela to revitalize its economy.The paper's ideas are as follows:firstly,review and sort out the research literature related to the theme;then it introduces the current economic and trade situation between Venezuela and China,including the current domestic economic situation of Venezuela,the current import and export trade between the two countries and China's direct investment in Venezuela.The paper analyzes the problems existing in the economic and trade cooperation between the two countries.There are five main points:the simplification of the trade structure,political risk restricting development in Venezuela,the deterioration of the domestic macroeconomic situation,macroeconomic conditions continuing to deteriorate,the strict exchange rate control leading to the difficulty of foreign exchange settlement,and the poor hardware investment environment.Then it theoretically analyzes the positive and negative impacts of the economic and trade cooperation between the two countries on the Venezuelan economy,and uses Venezuela's time series data from 1976 to 2014 to conduct empirical analysis of OLS regression and VAR impulse response functions.The conclusions show that the development of economic and trade cooperation between the two countries has a significant role in promoting the economic development of Venezuela.Finally,this research provides conclusions and policy recommendations.The innovation of this paper mainly includes two points:(1)The perspective of the topic and the research content are innovative.At present,the trade activities between Venezuela and China are increasing,but there is still a certain academic gap in the field of analyzing the influence of Venezuela's economy from the perspective of bilateral economic and trade cooperation.Therefore,this paper selects the latest data and facts of Venezuela to study this issue,and its conclusions are of great practical significance for promoting economic and trade cooperation between Venezuela and China and alleviating Venezuela's domestic economic difficulties.(2)Whether in Venezuela or in China,there is little research on this subject.In this paper,comparative analysis method,data analysis method and empirical analysis method are adopted to analyze the economic situation of China and Venezuela and their complementary advantages in economic and trade cooperation,so as to find out the conjunction point of bilateral economic and trade cooperation.This research is also of great value to China's future trade and investment in Venezuela.