Donald Trump’s Venezuela risk brings risk to China’s plans

It just took Just a few hours for Donald Trump to upend the relationship China has cultivated for decades.

Just hours before he was captured in an overnight raid, Venezuelan President Nicolás Maduro was praising his Chinese counterpart Xi Jinping as a “big brother” who “sends a strong message to the world as a leader” in a meeting with top diplomats from Beijing.

China has invested heavily in oil-rich Venezuela, one of its closest South American partners. State media also showed footage of that meeting to prove the point: smiling men in suits reviewing some of the 600 existing agreements between the two countries — except for a subsequent photo of Maduro, blindfolded and handcuffed, in gray sweats, on a U.S. warship.

China joins many countries around the world in condemning Washington’s surprising move against a sovereign state. He accused the United States of acting as a “judge of the world” and insisted that “the sovereignty and security of all countries must be fully protected under international law.”

These harsh words aside, Beijing will make careful calculations not only to secure its place in South America, but also to manage an already rocky relationship with Trump and plan its next steps as the great power rivalry between the US and China takes a new, completely unexpected direction.

Many see this as an opportunity for China’s authoritarian Communist Party rulers. But there is also risk, uncertainty and disappointment as Beijing tries to figure out what to do after Trump tore up the international rulebook it tried to enforce for decades.

Beijing, which likes to play the long game, does not like chaos very much. This certainly looks like it will come up again and again in Trump’s second term. He had planned ahead and weathered repeated trade wars. Xi will believe he has shown the US and the world how dependent they are on Chinese manufacturing and technology.

But now Beijing faces a new challenge.

Trump’s play on Venezuelan oil has likely reinforced China’s deepest suspicions about America’s intentions; How far can the United States go to contain Chinese influence?

Speaking to NBC on Sunday, US Secretary of State Marco Rubio said: “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 the enemies, rivals and rivals of the United States.”

The not-so-secret message to Beijing was: get out of our backyard.

Beijing is unlikely to listen. But will wait to see what happens next.

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

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

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

Xi has promised that Taiwan will one day be “reunified” with the mainland, and has not ruled out the use of force to achieve this. And some nationalists on Chinese social media ask: If the United States can act unilaterally in Caracas, what’s stopping Beijing from kidnapping Taiwan’s president?

First, Beijing may not see these parallels because it views Taiwan as a domestic issue, not a concern of the international order. But more importantly, if Xi decides to invade the island, it won’t be because the United States is setting a precedent, according to David Sacks of the Council on Foreign Relations. China, he writes, lacks “confidence that it can succeed at an acceptable cost.”

“However, until that day comes, China will continue its pressure strategy to wear down the Taiwanese people in order to force Taiwan to the negotiating table. The US attack on Venezuela does not change this dynamic.”

On the contrary, they are a challenge that China does not need or want, and they jeopardize its long-term plan to win the Global South.

The relationship between Beijing and Caracas was quite simple. China needed oil. Venezuela needed cash. Beijing provided more than $100 billion to Venezuela from 2000 to 2023 to finance railways, power plants and other infrastructure projects. In return, Caracas gave Beijing the oil it needed to fuel its booming economy.

Last year, about 80 percent of Venezuela’s oil was sent to China. This is still only 4% of the country’s oil imports. So “it’s important to keep some perspective” when it comes to China’s financial risks in Caracas, says Eric Olander, editor-in-chief of the China-Global South Project.

“Chinese firms such as CNPC and Sinopec are among the largest players here, and there is a risk that these assets will either be expropriated by Venezuelans under US direction or be marginalized amid the chaos.”

Additionally, Venezuela has approximately $10 billion in outstanding loans to Chinese creditors, but Olander again urges caution as it is unclear whether any investments in the country are currently at risk.

But it may warn future investors. “Chinese enterprises need to fully evaluate the risks and scope of potential US intervention before investing in relevant projects,” Cui Shoujun, from Renmin University’s School of International Relations, told Chinese state media. he said.

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

China’s concern, Olander says, is that other countries in South America are starting to worry about significant Chinese investments “due to concerns about attracting unwanted attention from the United States.” “This region is a critical source of food, energy and natural resources for China, and two-way trade now exceeds half a trillion dollars.”

The United States also made clear that it wanted the Panamanian government to cancel all Chinese port assets and investments related to the Panama Canal, adding that this was “undeniable for China.”

So Beijing may need to win the war in Washington’s backyard by other means.

China has shown patience and determination in influencing South America. The Global South consists of a group of countries that have signed up to a “community with a shared future” and called for opposing “unilateral tyranny”.

This message resonates with governments wary of the West, and especially Washington under Trump. China generally makes clear from the beginning what it wants from its partners; They accept the “One China” principle and Taiwan is treated as an “integral part” of China.

Beijing has had significant success in persuading Latin American states to switch diplomatic recognition from Taiwan to China; Costa Rica, Panama, the Dominican Republic, El Salvador, Nicaragua and Honduras have all been in favor of strategic partnership talk for the $19 trillion economy over the past 20 years.

In contrast, Trump has shown that the relationship with Washington can be volatile. And this could benefit China more than ever as it tries to portray Xi as a stable leader.

“This is important because the situation in Venezuela could easily devolve into chaos,” says Olander. “Also remember the lesson from Iraq, where the United States said the country’s oil reserves would pay for rebuilding the economy. This did not happen, and China is now the largest buyer of Iraqi crude. Something similar could easily happen in Venezuela.”

For years, the United States has been encouraged by China hawks in Congress to counter Beijing’s influence in South America. He took action, but no one seems sure what will happen next.

Everything about it is a gamble, and Beijing abhors gambling in every aspect.