Some interesting commentary from Beijing moves to cut losses in Venezuela after Maduro’s capture Asia Times:
China has drawn up plans to minimize losses in Venezuela and fine-tune its broader overseas investment strategy after the United States captured the Latin American country’s leader, Nicolás Maduro, on January 3.
Since the US military operation in Venezuela, the Chinese government has been busily assessing the situation and calculating potential losses to its economic interests.
On Wednesday and Thursday, Chinese officials, media and commentators started expressing their views, showing that Beijing has finished its assessment.
In general, Beijing regrets having put too many eggs in one basket and having been too ready to believe that its investments in Venezuela would face minimal risks under international law. It also admits that it had underestimated the Trump administration’s ambition in the Western Hemisphere.
Some commentators are saying that, in the short run, China wants to ensure it can continue receiving crude oil from Venezuela, which still owes it about US$10 billion to US$20 billion. In the middle and long term, China may seek to sell certain fixed assets in Venezuela to Western firms or form partnerships with them to limit losses.
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‘Law of the jungle’
When the Trump administration said in its National Security Strategy on December 4 that the US would strategically refocus on the Western Hemisphere, many Chinese commentators initially responded with mockery, arguing that the US was no longer wealthy or capable enough to sustain military dominance simultaneously in the Indo-Pacific, Europe and its own backyard.
That assessment has since shifted sharply, with commentators now acknowledging that Maduro’s capture has had a significant negative impact on Chinese investments in Venezuela and across Latin America.
A Beijing-based columnist surnamed Xu says in his article that China’s long-running oil-for-loans arrangements with Venezuela have left Beijing heavily exposed.
“Since 2007, China has provided Venezuela with US$60 billion in loans. At the end of 2025, more than US$10 billion was still outstanding,” Xu says. “The debt is repaid with crude oil, requiring Venezuela to ship about 610,000 barrels a day to China.”
Xu says that with Maduro’s arrest, China could face substantial losses. He warns that Chinese firms have invested billions of US dollars in Venezuela’s energy sector, including large-scale drilling platforms and upstream oil projects, many of which could be forced to halt, while daily crude oil shipments used for debt repayment could be disrupted.
Such disruptions, he adds, would force refineries in eastern China to seek alternative supplies, potentially driving up oil prices and fuel costs. Besides, a range of Chinese-invested infrastructure, manufacturing and telecommunications projects in Venezuela would face heightened default risks.
We already know that China already switched to Canadian crude since last November, right after the Trump-Xi meeting:
So it’s quite possible that the US gave China some “grace period” to reroute their oil supply before the actual operation in Venezuela. China has also built up a massive amount of strategic petroleum reserves so the oil stock in China should be quite safe for now.
Obviously it’s still early days and much of this kind of commentary is still speculative, but if the US goal in Venezuela is indeed to replicate what they did in Iran with the bombing of nuclear facilities, which is to scare off Chinese investors, then it’s going to have a broader impact to Latin America as a whole, as it did to the ME/NA region where both Russia and China are pulling away their strategic interests from.
China is going to be fine. The CPC leadership is not stupid, obviously. China has been intensely building up self-sufficiency in the last few years, the strategic petroleum reserves and food stocks are at an all time high, as well as the push for technological breakthroughs and especially in clean renewable energy.
The problem, as I have said, is internal and ideological in nature.
I think the biggest surprise for everyone was how China’s domestic consumption has failed to pick up since abandoning Zero Covid in early 2023. I remember even Western financial presses during 2021-2022 were like: “just wait until China opens up its economy, then global demand will soar and we’ll all be making money”.
We’re now in 2026 and China’s domestic consumption is unlikely to return to the pre-Covid 2019 level anytime soon, and at least not in the next few years (the most optimistic analysis I’ve seen say at least wait until 2030).
I’ve written a lot about the deflationary economy so won’t be repeating here. Property market is imploding and the local government debt crisis being the major factors, and this translates into a slump in domestic consumption which also means that China is now even more dependent on its export sector (which is also under attack by Trump’s tariffs, and the EU unable to substitute the US as a consumer market since the Ukraine war) as well as making profitable investments overseas (which is being undone by Trump’s B-2 stunt in Iran and the Maduro capture stunt in Venezuela - note that both endeavors required only minimal effort from the US without being dragged into a long war that many predicted).
And it’s not that the Chinese leadership doesn’t know the importance of domestic market. The Dual Circulation strategy has been implemented since April 2020, it simply did not produce the result even after 5 years. If anything, the opposite has happened where trade surplus is now at a record high while the domestic consumption plunged.
So China is in a very weird spot right now when it comes to its international relations:
Militarily, China has been building up its military but still inadequate to protect its overseas investments, as other users have pointed out. This demonstrates an overly optimistic view of the Washington-led international order, which has greatly benefited China’s fast growth in economy but the lagging military expenditure also means China cannot project its power like the USSR did, which I still see as the superior foreign policy compared to China’s win-win cooperation model.
(NOTE: this is not to say that China cannot put up a fight if it wants to. Warfare is an extension of politics, and with hybrid warfare the goal is to exert enough costs - political, economic and social costs - to force your opponents into backing down and mitigate the damage. So it’s not always black and white, like the only victory can only come from complete neutralization of your enemy)
Economically, China has amassed great influence all over the world. See that even Argentina, who is now effectively US colony, still continues to trade with China, because nobody can really decouple from China. So, China does indeed have a lot of economic levers if it wants to assert its interests. However, China continues to adhere to neoliberal ideology that makes them very difficult to abandon their export sector, and as a result of needing to run trade surpluses, finds themselves continue to be dependent on the global free market. The failure to build a strong consumer market (which is really the result of over-reliance on export and supply-side investment) also made China unable to absorb global export surpluses and replace the US consumer market. It keeps them in a competitive state with the rest of the exporter economies in the Global South instead.
Finally, I want to point out that the US is not “invincible” either. The 2022 Ukraine war and the sanctions that ensued caused global energy supply disruption and the high inflation in the US resulted in the Biden administration hiking the interest rates. This placed the US dollar at an unprecedented perilous situation, and with Russia calling for global de-dollarization and many Global South countries looking to abandon the dollar because they started to run into dollar liquidity crises, China’s reluctance to go with it (because China is still too dependent on and benefited greatly from the dollar hegemony) has caused this opportunity to be missed.
So, it is very important to understand that while the US has given China the room to grow into a global economic superpower, it also tied China to become highly dependent on the US consumer market. China has become addicted to the neoliberal free trade and the dollar hegemony that made them wealthy. Remember that 70% of Belt and Road investments were made in US dollars - this is as clear a signal of the intention behind China’s foreign investment strategy.
It’s unlikely that China will lose anything substantial, but it makes the relationship with the Global South a very distinct one from the USSR, where the latter was ideologically driven. This is why I said the problem with China is internal and ideological.