Donald Trump’s Venezuela risks pose risks to China’s plans

It only took It took just a few hours for Donald Trump to upend a relationship China had cultivated for decades.

Just hours before his arrest in an overnight raid, Venezuelan President Nicolas Maduro praised Chinese President Xi Jinping as “an older brother” who “sends a strong message as a leader to the world” during a meeting with top diplomats in Beijing.

China has invested heavily in oil-rich Venezuela, one of its closest South American partners. Its state media showed footage of that meeting to prove the point: smiling men in suits reviewing some of the 600 agreements currently in place between the two countries — except that the next photo of Maduro was taken aboard a U.S. warship, blindfolded, handcuffed and wearing a gray undershirt.

China joins many countries around the world in condemning Washington’s shocking move against a sovereign country. It accused the United States of acting as “the world’s judge” and insisted that “the sovereignty and security of all countries should be fully protected by international law.”

The harsh rhetoric aside, Beijing will be making careful calculations not only to secure its foothold in South America but also to manage its already fraught relationship with Trump and chart its next steps as the great power competition between China and the United States takes a new and completely unexpected turn.

Many see this as an opportunity for China’s authoritarian Communist rulers. But there are risks, uncertainties and frustrations as Beijing tries to figure out what to do after Trump tore up the international rulebook it tried to abide by for decades.

Beijing, which likes to fight a protracted war, does not like chaos. This will certainly be a recurring problem for Trump during his second term. It planned ahead and weathered the on-again, off-again trade war. Xi Jinping believes he has shown the United States and the world how dependent they are on Chinese manufacturing and technology.

But now Beijing faces new challenges.

Trump’s investment in Venezuelan oil may be fueling China’s deepest suspicions about U.S. intentions — how far will the United States go to curb China’s influence?

“This is the Western Hemisphere. This is where we live, and we will not allow the Western Hemisphere to become a base of operations for America’s adversaries, competitors, and rivals,” U.S. Secretary of State Marco Rubio declared in an interview with NBC on Sunday.

The not-so-hidden message is aimed at Beijing: Get out of our backyard.

Beijing is unlikely to listen. But it will be waiting to see what happens next.

Beijing on Wednesday strongly condemned a U.S. report suggesting Washington would order Venezuela’s acting president to cut economic ties with China and Russia.

Chinese Foreign Ministry spokesman Mao Ning told reporters that this was “a typical act of bullying, a serious violation of international law, a serious infringement of Venezuela’s sovereignty, and will seriously damage the rights of the Venezuelan people.”

Some wonder whether China is waiting to see if it can do the same on Taiwan, a self-governing island it considers a breakaway province.

Xi Jinping has vowed that Taiwan will one day be “unified” with China and has not ruled out using force to achieve that goal. Some nationalists on Chinese social media asked: If the United States can act unilaterally in Caracas, what’s stopping Beijing from seizing Taiwan’s president?

First, Beijing may not see these similarities because it views Taiwan as an internal matter rather than a problem for the international order. But more importantly, David Sachs of the Council on Foreign Relations said that if Xi Jinping decides to invade the island, it won’t be because of the precedent set by the United States. He wrote that China did not have “the confidence to succeed at an acceptable cost.”

“Until that day comes, however, China will continue its strategy of using coercion to weaken the people of Taiwan with the goal of forcing Taiwan to come to the negotiating table. The U.S. attack on Venezuela does not change this dynamic.”

Rather, they are challenges that China does not need or want, and they would jeopardize its long-term plans to win over the Global South.

The relationship between Beijing and Caracas is fairly simple. China needs oil. Venezuela needs cash. From around 2000 to 2023, Beijing provided more than $100 billion to Venezuela to finance railways, power plants and other infrastructure projects. In exchange, Caracas provides Beijing with the oil its booming economy needs.

About 80% of Venezuelan oil was shipped to China last year. This still accounts for only 4% of the country’s oil imports. So when it comes to China’s financial risks in Caracas, “it’s important to keep some perspective,” said Eric Olander, editor-in-chief of the China-Global South Project.

“Chinese companies such as PetroChina and Sinopec are among the largest companies there, and there is a risk that these assets will be nationalized by Venezuela under the guidance of the United States, or marginalized in the chaos.”

Venezuela also owes Chinese creditors about $10 billion in outstanding loans, but Olander again urged caution as it was unclear whether any investments in the country were at risk.

But it could be a warning to future investors. “Chinese companies need to fully assess the risks and extent of potential U.S. interference before investing in relevant projects,” Cui Shoujun of the School of International Relations at Renmin University of China told Chinese state media.

Beijing does not want to jeopardize the fragile trade truce it just signed with the United States, but it also does not want to lose its foothold in Latin America. Striking that balance will be difficult, especially with someone as unpredictable as Trump.

Hollande said the concern about China is that other countries in South America are beginning to worry about China’s large investments “because they are worried about attracting unnecessary attention from the United States.” “The region is an important source of food, energy and natural resources for China, and bilateral trade volume has now exceeded US$5 trillion.”

The United States has also made it clear it wants the Panamanian government to cancel all Chinese port holdings and investments related to the Panama Canal, which he added “is certainly concerning to China.”

So Beijing may have to find other ways to win the battle in Washington’s backyard.

China has shown patience and persistence in wooing South America. The countries of the Global South are the group of countries that have signed up to the “Community of Destiny” and urged opposition to “unilateral bullying”.

The message resonates with governments increasingly wary of the West, especially Washington under Trump. China has typically made its demands on partners clear from the outset – that they recognize the “one China” principle and view Taiwan as an “integral part” of China.

Beijing has had considerable success in persuading Latin American countries to cut ties with Taiwan in favor of China, with Costa Rica, Panama, the Dominican Republic, El Salvador, Nicaragua and Honduras all backing the $19 trillion economy’s rhetoric about a strategic partnership over the past two decades.

Trump, by contrast, has shown that relations with Washington can be rocky. This could work to China’s advantage, as the country now more than ever wants to establish Xi Jinping as a stable leader.

“This is important because the situation in Venezuela could easily descend into chaos,” Olander said. “In addition, don’t forget the lessons of Iraq. The United States also said that the country’s oil reserves would be used for economic reconstruction. But that did not happen, and China is now the largest buyer of Iraqi crude oil. A similar situation could easily happen in Venezuela.”

For years, China hawks in Congress have urged the United States to counter Beijing’s influence in South America. It has taken action, but no one seems sure what will happen next.

It’s all a gamble—and by all accounts, Beijing hates gambles.