Maduro's ouster leaves China holding the bag on oil investments, political support
The developments mark a rapid change in fortunes for Beijing, which had a senior delegation of officials visiting Caracas and who met with Maduro only hours before he was seized in a strike by U.S. special forces. China had invested billions into energy projects under the Maduro regime.
For years, China propped up the Venezuelan regime and pumped billions into energy projects. But, now, after President Donald Trump ousted its dictator, it is left holding the bag. Just days after authorizing the operation to strike Venezuela and capture its dictator, Nicolás Maduro, Trump reportedly demanded that Maduro’s successors cut economic ties with their three major partners: Iran, Russia and China.
These developments mark a rapid change in fortunes for Beijing, which had a senior delegation of officials visiting Caracas who met with Maduro just hours before he was seized in a strike by U.S. special forces.
“Beijing got humiliated in Venezuela," expert says
For China, Venezuela was a significant partner in the Western Hemisphere, and the recipient of Beijing’s sizable investments in the country’s oil industry. In return, Beijing imported cheap oil from Caracas, which had difficulty selling elsewhere under U.S. sanctions.
Though Venezuela’s oil production has steadily declined due to years of mismanagement, infrastructure decay, and U.S. sanctions, Beijing and its refineries have remained consistent customers for Caracas’ crude. Despite oil from Venezuela only making up a small portion of China’s total imports, the incident is an “embarrassment” for Beijing, Michael Sobolik, a Senior Fellow specializing in U.S.-China relations at the Hudson Institute, told Just the News.
“Beijing got humiliated in Venezuela in multiple ways. Its air defenses didn't work properly. Their delegation had just finished meeting with Maduro hours before the US military snagged him. To top it off, the United States is blocking sanctioned oil exports,” said Sobolik.
“Venezuela makes up a small percentage of China's oil imports, so it's mainly a point of public embarrassment for them. They can't stop America because they can't project power beyond their own near-abroad,” he added.
Chinese relationship dates back to the Chavez regime
China’s close relationship with Venezuela began under the rule of Maduro’s predecessor, Hugo Chávez. In 2002, the two countries entered a strategic development partnership, primarily consisting of loans-for-oil deals, according to the Atlantic Council. From 2007 to 2017, China made available more than $60 billion in financing to Venezuela, accounting for 40% of its total lending in South America during that period.
China’s oil-for-loans programs have left Beijing exposed now that the Trump administration wants Venezuela’s new leadership to cut those economic ties. According to The South China Morning Post, Caracas still has about $10 billion in outstanding loans with China.
It is possible that the new regime, which is being led by Maduro’s former vice president, Delcy Rodriguez, may choose to challenge the legitimacy of these loans in order to avoid repayments.
More than $2 billion from Chinese investors put into Venezuela's oil business
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https://justthenews.com/world/latin-america/maduro-ouster-leaves-china-holding-bag-oil-investments-political-support