The future of China-Venezuela relations as Venezuelans head to the polls
“We have the support of countries with cutting-edge technology in drone and anti-drone combat, our sister countries Russia, China and Iran, so make no mistake about Venezuela”, Nicolás Maduro, Venezuela’s autocratic leader, called out during a military parade to celebrate the country’s Independence Day this past July 5th. The same words have been echoed throughout his presidential campaign. Given a potential government change in the Caribbean petro-state on July 28, it’s worth asking ourselves how these influential countries, in particular the People’s Republic of China (PRC), would react to a new tenant in the Presidential Palace of Miraflores.
The Venezuelan government’s laudatory rhetoric toward the PRC is nothing new. Over the last 25 years, first under Hugo Chavez and now Maduro, the PRC has been lavished with praise by the entire Chavista establishment. This includes academics, government and military high-ranking officials, and the heads of state themselves. Common talking points feature anti-U.S. and anti-Western rhetoric, multipolarity, South-South cooperation, and portrayals of China as a technological and military power.
Maduro depicting China as a defender of Venezuelan sovereignty is the latest manifestation of this trend. Over time, the PRC has responded in kind, both by supporting and defending Maduro’s government in international fora as well as providing financial backing through vast loans-for-oil.
It is understandable to interpret this level of cooperation as a staunch partnership based on shared interests, with challenging U.S. hegemony in Latin America and promoting autocratic rule in Venezuela being key among them. However, this would be a mistake. As Jessica Chen has argued, China’s activities overseas have offered alternatives to U.S.-led international institutions and created a more favorable environment for other authoritarian governments, including Venezuela. These actions, though, are primarily driven by the Chinese leadership’s desire to secure its own stability and influence both domestically and internationally, rather than a deliberate attempt to undermine democracy and spread autocracy.
The PRC does pose a challenge to the democratization of Venezuela, but it does not provide the unequivocal support for autocratic rule that it is often portrayed to offer. If Maduro’s grip on power is broken on July 28, China will surely move quickly to engage the new leadership. For a new government in Miraflores to effectively interact with China, it will require a thorough understanding of China’s strategic objectives and knowledge on how Beijing will act to protect its interests in Venezuela.
Where we are today
During Maduro’s state visit to Beijing in September 2023, China elevated Sino-Venezuelan relations to the status of “all-weather strategic partnership.” China does not adhere to rigid or explicit criteria for establishing the types of diplomatic relationships they term as “partnerships.”
These designations are primarily determined through mutual consultation, emphasizing flexibility and the preferences of both parties. Consequently, China’s “partnerships” are extensive and varied, encompassing over 20 different kinds. Among these, the strategic partnerships prefixed with “all-weather” and “permanent” represent the highest degree of diplomatic relations China offers. These exclusive partnerships, shared only by Pakistan, Belarus, Venezuela, and most recently, Hungary, represent diplomatic ties based on a high degree of political trust, where the partners support each other in international and regional affairs.
In Venezuela’s case, the partnership has been in full display this year, as China and Venezuela mark the 50th anniversary of the establishment of diplomatic relations between them. “Through the ages, China and Venezuela’s unbreakable bond shines anew,” wrote Ambassador Lan for CGTN. His article explicitly details the core drivers of current Sino-Venezuelan relations: “Venezuela stands firmly with China on issues related to Taiwan, Hong Kong, Xinjiang, and Xizang, echoing calls for justice. China strongly opposes the unilateral sanctions imposed by the U.S. on Venezuela and supports Venezuela in upholding sovereignty, national dignity, and social stability.” From China’s perspective, Maduro serves a clear purpose: defending the Chinese Communist Party (CCP) and its policies in the international arena. Conversely, from Maduro’s perspective, China acts as a shield to ward off criticism and external pressure and gain international legitimacy.
The echoing between China’s and Venezuela’s diplomatic narratives shows a high degree of political alignment. Nonetheless, diplomatic coordination in international fora and media alignment, as important as they are, represent but a fraction of former Sino-Venezuelan relations, marking a change in China’s foreign policy towards Venezuela.
As I’ve argued in the past, over the last 25 years, bilateral relations between Caracas and Beijing have experienced significant deterioration, largely due to Venezuela’s self-inflicted economic implosion. Initially, under Hugo Chavez, the relationship was marked by strong economic ties and substantial Chinese participation in the country, particularly in the oil sector.
However, the massive $65 billion loan portfolio provided by China yielded scant results, as corruption and inefficiency plagued most projects. The last loan China extended to Venezuela was in 2016 for $2.2 billion, while investments have come to a grinding halt.
China’s frustration with Venezuela is evidenced by its diplomatic maneuvers, including outreach to the Venezuelan opposition. In 2016, following legislative elections in Venezuela that saw the opposition gain a majority, China’s concerns about Maduro losing his grip on power became evident. To navigate this new political landscape, China invited a high-level delegation of opposition lawmakers to Beijing. This visit aimed to assess the new legislative leadership and ensure the continuation of Chinese projects and debt commitments.
Similarly, in 2019, China and the interim government of Venezuela led by Juan Guaidó established an unofficial backchannel, signaling China’s willingness to adapt to new political realities in Venezuela. These actions reflect China’s strategic approach to safeguard its interests by preparing for various political outcomes in Venezuela. They are not the calculations of an “all-weather strategic” partner.
While the united diplomatic front between China and Venezuela poses a challenge to a democratic transition in the country, China will not intervene to ensure Maduro remains in power. There is a clear distinction between enabling Maduro’s government and actively supporting the continuation of autocratic rule.
Adapting to a new reality
Maduro had little to show for after his state visit to China last year. Despite the grand rhetoric and ceremonial agreements, Maduro returned home with little more than promises and memorandums of understanding, underscoring the lack of tangible financial commitments from China.
What truly caught the eye, however, were Xi Jinping’s remarks at the end of the visit, specifically his focus on Special Economic Zones (SEZs). This emphasis on SEZs is a notable shift and suggests a new strategic interest for China, indicating that Beijing sees these zones as a viable way to continue its economic engagement with Venezuela amidst the country’s broader turmoil.
Venezuela ceased to be an affluent and influential petro-state a long time ago, taking China’s loans and investments with it. This prompted China to reconsider its strategy, moving away from direct financial commitments that carried high risks of failure and towards a more controlled and insulated approach.
The establishment of SEZs allows Chinese companies to operate with greater autonomy and reduced financial exposure, ensuring that their investments are insulated from the broader economic mismanagement plaguing the country.
A focus on SEZs, will create pockets of economic stability and productivity that can function independently of the Venezuelan government’s inefficiencies. This approach not only minimizes financial risks for Chinese enterprises but also maintains China’s economic presence and influence in Venezuela, reflecting a pragmatic adaptation to the challenging realities on the ground.
We are already seeing China’s shift in strategy play out in 2024, with Venezuela eagerly engaging. In the last six months, a parade of Venezuelan government officials has travelled to China with the sole purpose of learning about SEZs. Between April and May alone, the Minister of Agriculture Wilmar Castro Soteldo, governors Luis José Marcano of Anzoátegui, Ernesto Luna of Monagas, José Alejandro Terán of La Guaira, Rafael Lacava of Carabobo, and the Vice President of Science, Technology, Health, and Education, Gabriela Jiménez, all visited several cities in China. Nicolás Maduro Guerra, son of Maduro and head of the China-Venezuela Interparliamentary Friendship Group, also went together with a group of deputies.
Every single one of them talked and touted Chinas’ SEZs as a way for Venezuela to emulate China’s economic success. This has been compounded by visits to Venezuela by PRC officials, including China’s International Trade Representative and Vice Minister of Commerce Wang Shouwen, Secretary of the Tai An Municipal Committee Yang Hongtao, and Vice Minister of the International Department of the CCP Central Committee Chen Zhou, to name a few.
What could happen after July 28?
China will remain an influential actor in Venezuela, regardless of who wins this weekend. If Maduro retains power, the status quo in Sino-Venezuelan relations is likely to persist. Beijing’s strategy will likely emphasize controlled engagement, leveraging SEZs to create pockets of economic productivity independent of Venezuela’s governmental inefficiencies. This will allow China to maintain its economic presence and influence in a crucial country with Caribbean projections without further large-scale financial commitments.
If Venezuelans rid themselves of Maduro’s autocratic rule, then things will get interesting. First, we can expect China’s response to be swift and adaptive. If China’s previous outreach to the Venezuelan opposition serves as a guide, odds are Beijing has already laid out a specific strategy to deal with a new government. Lan Hu, China’s Ambassador in Caracas, would likely be one of the first to congratulate opposition leader Edmundo González, signaling China’s readiness to build a constructive relationship with the new government. China’s focus will probably remain on SEZs and other pragmatic economic engagements, but there will be an increased emphasis on reassessing and potentially renegotiating existing agreements to ensure continuity and stability in Sino-Venezuelan relations.
China will also maintain open channels with Maduro loyalists. Despite potential changes in the presidency, Venezuela’s National Assembly and a significant number of governorships, which will not be up for reelection for the next two years, will remain under the control of Maduro supporters.
Therefore, China is likely to diversify its approach. On the one hand, it will engage with the central government to ensure it remains an active player in the country. On the other hand, China will establish direct contact with Chavista governors, especially those in coastal states where SEZs are planned.
One thing is certain, with Maduro out of the picture, China will lose one of the pillars of current Sino-Venezuelan ties: unquestionable backing in regional and international institutions. However, China stands to gain something it has not enjoyed in the past: a pathway to a competent government that seeks to restore the rule of law and stabilize the economy.
While a González administration will not exhibit the same blind loyalty as Maduro, which China will undoubtedly miss, the potential for political and economic stability is highly valued by Beijing in its foreign engagements, regardless of the type of government that ensures it.
As for a Gonzalez government, engaging with China will be inevitable. The point of departure must be devising a well-structured policy agenda to deal with China. A new government cannot afford not to have one.
It would be helpful to seek out advice and expertise from other Latin American countries like Chile that have managed to have a proactive relationship with China that truly benefits the country. This will have to go hand-in-hand with a thorough review of all existing agreements with China to ensure they align with Venezuela’s national interests and economic recovery plans, beginning with the outstanding debt, a number that has been a state secret for the last decade. Negotiations will begin on day one—China will make sure of it. González and his team better be ready.
Related sources:
https://www.foreignaffairs.com/articles/china/2019-06-11/world-safe-autocracy
https://www.vtv.gob.ve/cuatro-delegaciones-venezolanas-china-inversiones