USIP.ORG SPECIAL REPORT 484 1

SPECIAL REPORT

NO. 484 | SEPTEMBER 2020 UNITED STATES INSTITUTE OF PEACE www.usip.org

China-Venezuela Relations in the Twenty-First 

Century: From Overconfidence to Uncertainty

By Matt Ferchen

Summary 

• China’s industrialization boom in 

the early 2000s created new opportunities for its resource-rich 

trade partners in Latin America 

and Africa. Venezuelan president 

Hugo Chávez, seeking new diplomatic and oil collaborations with 

China and Russia, was enthusiastic 

about advances from China.

• Both sides miscalculated the risks 

and rewards of a partnership focused on oil and diplomatic ties. By 

the time of Chávez’s death, the relationship was already experiencing 

growing frictions. Rather than admit 

to difficulties or mistakes, Chinese 

and Venezuelan leaders have stubbornly stuck with the status quo.

• China has attempted to balance lowkey support for Nicolás Maduro’s 

government—thereby helping prolong Chavista economic and political 

misrule—with efforts to minimize the 

financial and reputational damage 

resulting from its long-term support 

for Chávez and Maduro. 

• The Venezuelan opposition has 

pointed to the lose-lose outcomes 

of the relationship while emphasizing that China still has an opportunity to make a positive contribution 

to Venezuelan development and 

peace if it changes course. 

• The Trump administration’s support for Juan Guaidó over Maduro, 

however, means that Venezuela will 

remain a key site for the rapidly expanding strategic rivalry between 

the United States and China.

Venezuela’s foreign minister, Jorge Arreaza, (left) meets with Chinese foreign minister 

Wang Yi in Beijing on January 16, 2020. (Photo by Ng Han Guan/AP)

Contents

Introduction ...................................3

Boom and Bust in China–Latin 

America Relations.........................4

Sowing the Seeds

of Dysfunction .............................. 5

Venezuelan and

Chinese Calculations ...................7

After Chávez, Chronic Crisis..... 10

Stalemate, Opposition Strategy, 

and the US-China Rivalry............ 12

Conclusions: Learning from 

China’s Mistakes ........................ 17
2 SPECIAL REPORT 484 USIP.ORG

The views expressed in this report are those of the author alone. They do not necessarily reflect the views of 

the United States Institute of Peace. An online edition of this and related reports can be found on our website 

(www.usip.org), together with additional information on the subject.

© 2020 by the United States Institute of Peace

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Special Report No. 484. First published 2020.

ISBN: 978-1-60127-830-2 

NO. 484 | SEPTEMBER 2020

SPECIAL REPORT

ABOUT THE REPORT

This report examines China’s relationship with Venezuela during the Chávez 

and Maduro regimes and the consequences for both countries. The report is 

based on more than eight years of research and interviews with government 

officials, businesspeople, sector analysts, and academic researchers from 

China, Venezuela, and the United States. It was funded by the China program 

at the United States Institute of Peace.

ABOUT THE AUTHOR

Matt Ferchen is Head of Global China Research at the Mercator Institute for 

China Studies, Berlin. Previously he was a scholar with the Carnegie-Tsinghua 

Center for Global Policy and an associate professor in the Department of 

International Relations at Tsinghua University, both in Beijing.

CONFLICT 

ANALYSIS & 

PREVENTION
USIP.ORG SPECIAL REPORT 484 3

Introduction

Relations between China and Venezuela have been marked from the outset by superlatives. China 

is the world’s largest oil importer, while Venezuela has the world’s largest proven oil reserves. The 

China Development Bank (CDB), dubbed by some “China’s Superbank,” is arguably the world’s biggest development finance institution, and its lending to Venezuela still constitutes China’s largest 

outlay of loans anywhere in the world.1 Venezuela’s national oil company, Petróleos de Venezuela 

S.A. (PDVSA), once seen as the best-run oil company in Latin America, has been the key institution 

in Venezuela’s South American and Caribbean oil diplomacy. The China-Venezuela relationship 

stands out geopolitically as well. China has characterized its relationship with Venezuela as part 

of an effort to be a leader and engine of international development, while Chavista leaders in 

Venezuela have cast themselves as twenty-first-century Bolivarian socialist revolutionaries. 

However, the outsized ambitions and scale of the China-Venezuela political and financial relationship have meant that its failures and disappointments have also been correspondingly 

large. It has also become a case study in how China’s claims that its foreign policy is focused 

on development can be highly misleading. Venezuela’s long, slow-motion descent into economic, social, and political crisis has exposed the underlying miscalculations and weak points of 

China’s financial and diplomatic position in Venezuela and in Latin America more generally. The 

relationship has also become a focal point for critics, including many in the Trump administration, 

Chinese foreign minister Wang Yi, right, gestures during a meeting with Venezuela’s foreign minister, Jorge Arreaza, left, at the Diaoyutai 

State Guest House in Beijing on January 16, 2020. (Photo by Ng Han Guan/AP)
4 SPECIAL REPORT 484 USIP.ORG

of China’s unsustainable lending practices in Latin America and Africa. Ultimately, while China 

did not use its new oil and lending relationship with Venezuela to push the country in directions 

it would not otherwise have gone, China’s financial and diplomatic support for the Chávez and 

Maduro governments has facilitated and prolonged destabilizing misrule by Chavista leaders.2

This report explores how China and Venezuela came to be involved in such a dysfunctional 

economic and diplomatic relationship, how each side has responded to Venezuela’s extended 

economic and political crisis, and the implications for the future of the bilateral relationship and for 

China’s aspirations to be a leader and agent of international development. When China’s developing country diplomacy in the early 2000s met Venezuela’s interest in increasing oil exports to 

non-Western countries, the situation seemed ripe for closer economic and financial ties between 

the two countries. Economic, political, and diplomatic calculations and miscalculations on both 

sides over the last decade and more, however, combined to produce a perfect storm in ChinaVenezuela relations, with Venezuela currently in significant oil debt arrears to China and China 

facing both financial and reputational losses as other countries begin to question the effects of its 

development finance and win-win posture. With China publicly supporting Nicolás Maduro and the 

United States supporting the interim government under Juan Guaidó, in question now is whether 

China will take responsibility amid the growing US-China geostrategic rivalry to participate in multilateral efforts to help Venezuela restructure its finances and get back on its feet economically.

Boom and Bust in 

China–Latin America Relations

The China-Venezuela relationship of today is best understood against the backdrop of China’s 

renewed economic and diplomatic engagement with Latin America and other resource-rich 

developing country regions such as Africa.3 The rebirth of China’s developing country diplomacy 

and the rapid takeoff in trade, investment, and financial ties to these regions began in earnest in 

the early 2000s. The brisk growth of commodity-based trade ties between South America and 

China beginning around 2003–2004 in turn provided the foundation for a wave of high-level diplomacy as Chinese leaders began to make state visits to Latin America at around the same time. 

Driving the rapidly expanding commercial relationship with Latin America was a growing and 

changing Chinese economy in which demand for scarce mineral, energy, and agricultural resources was increasingly met by supplies of iron ore, copper, oil, and soy shipped from South 

America. At geostrategic and diplomatic levels, China was keen to build on its legacy of “third 

world” diplomacy from the 1950s and 1960s and to include regions like Latin America and Africa in 

its newly invigorated developing country diplomacy.4 For their part, political and business leaders 

in many countries in South America expressed a high degree of enthusiasm for deeper economic 

and diplomatic engagement with China. Emblematic of such commercial and diplomatic ties was 

the China-Brazil relationship around 2010, characterized by booming soy and oil exports from 

Brazil, cooperation in the BRICS (Brazil, Russia, India, China, South Africa) group, and a notable 

effort to align critiques of the United States in the wake of the global financial crisis.
USIP.ORG SPECIAL REPORT 484 5

It was also during these boom years in China–Latin 

America relations that Chinese foreign policy, under 

President Hu Jintao, came to focus on the concept and 

framework of peaceful development as the core logic underpinning China’s commercial and diplomatic engagement with resource-rich developing countries in particular.5

Working within the frame of peaceful development, Chinese foreign policy officials laid out the 

logic of their proposed virtuous circle: China’s own continued economic development required 

deepened international trade, investment, and financial ties, which in turn would drive economic 

development for all those countries engaged in ever deeper commercial relations with China.

Importantly, the policy of peaceful development was touted as offering more than economic 

benefits. Drawing on the Chinese Communist Party’s own domestic governance logic and rhetoric since the early 1980s, Chinese foreign policy officials argued that economic development 

would also boost political stability and peace.6 It was on the basis of such logic that China 

promoted the rhetoric of win-win, mutually beneficial, and complementary relations, especially 

with developing countries, including some in Latin America. China’s emphasis on the importance of economic development as a condition for stability, peace, and security is summed up 

by President Xi Jinping’s 2014 assertion that “development is the greatest form of security,” a 

message that has broad resonance in many developing countries.7 Yet the China-Venezuela 

relationship serves as a sobering reminder that the slogan “development is the master key to 

solving all problems,” as Foreign Minister Wang Yi said recently, can be a poor guide to practical 

policymaking, especially in conditions of poor governance and crisis.8

Nevertheless, in South America, and during the commodity boom from 2003 to 2013, the 

China-Venezuela relationship provided both Chinese and Venezuelan political and business 

leaders the opportunity to highlight the supposed benefits of a natural resource complementarity based on oil. At the same time, the relationship epitomized an elective affinity between 

South America’s ascendant New Left leadership, headed by Venezuela’s Hugo Chávez, and 

China as a new, alternative diplomatic and commercial partner in the region. Variations of such 

alliances emerged in other parts of South America as well, especially in Brazil and Argentina, 

but none developed to the same political and economic degree. Ultimately, the commercial and 

political extremes that typified the roots of China-Venezuela relations are also at the heart of the 

relationship’s current dysfunctionality.

Sowing the Seeds of Dysfunction

The China-Venezuela relationship first truly took off in the early 2000s. Oil- and lending-based 

commercial and diplomatic relations were built up just as Hugo Chávez was entrenching his 

experiment in twenty-first-century Latin American populism.9 Within a very short period of time, 

Chinese oil, financial, and diplomatic interests in Venezuela achieved a form, scale, and importance unmatched by China’s energy and state-to-state relations elsewhere in Latin America—or 

indeed, anywhere else in the world. 

Ultimately, the commercial and political 

extremes that typified the roots of ChinaVenezuela relations are also at the heart of 

the relationship’s current dysfunctionality.
6 SPECIAL REPORT 484 USIP.ORG

Between 2007 and the time of Chávez’s death in early 2013, the CDB lent Venezuela just shy 

of $40 billion, a figure far surpassing Chinese official energy finance to any other country in the 

world at that time, let alone elsewhere in Latin America, and establishing China as Venezuela’s 

number one source of sovereign debt. 10 At the same time, the nations set up a special state-tostate coordinating body, the China-Venezuela Joint High Level Committee, to manage the new 

loans-for-oil deals, and by 2014 they had elevated diplomatic ties to the level of a “comprehensive strategic partnership,” the second highest among China’s diplomatic partnership types.11

Yet signs that not all was well in Venezuela or in the China-Venezuela relationship had begun 

to appear well before Chávez’s death. Even before the global financial crisis, when Chávez was 

at the height of his power, politicization and mismanagement of the state oil company PDVSA was 

already putting strains on the country’s oil production. At the same time, even as Sino-Venezuelan 

diplomatic amity flourished, China’s state bankers and national oil firms had become impatient at 

the lack of privileged access to more upstream petroleum sources, which they believed should 

have been the natural outcome of such close, high-level political ties.12 Looming in the background were increasingly obvious signs of Venezuela’s economic distress and social and political 

Oil workers from PDVSA contractor Tucker Energy Services take a break from moving equipment to an oil field near El Tigre, a town located 

within Venezuela’s Hugo Chávez oil belt, formally known as the Orinoco Belt. (Photo by Fernando Llano/AP)
USIP.ORG SPECIAL REPORT 484 7

polarization, not to mention growing tensions and acrimony inside and outside the country about 

the effects of Chavismo on Venezuela’s democratic institutions and governance. 

By 2012, as concern grew over Chávez’s health and his grip on that year’s presidential elections, Chinese analysts began to exhibit increasing unease about the stability of their Chávezbased partnerships.13 After Chávez’s death, and against a backdrop of plunging and volatile 

global oil prices starting in 2014, his successor, Nicolás Maduro, quickly proved to be capable of offering only a pale simulacrum of Chávez’s dynamic if highly polarizing and destructive 

political and diplomatic leadership. Among the signs of growing economic incompetence on 

Maduro’s watch were decreasing crude output and exports as a result of mismanagement at the 

PDVSA, destabilizing and corruption-enhancing exchange rate policies, and rising poverty rates. 

Eventually, Venezuela’s economic, political, and humanitarian crisis spilled over into a regional 

refugee and democratic governance crisis. Yet even in the early years after Chávez’s death, 

when signs of Maduro’s ineffectual economic management were unmissable, China continued 

to lend to Venezuela, to the tune of an additional $20 billion between 2013 and 2017.14

Venezuelan and Chinese Calculations

Venezuela’s descent and the way this ensnared China financially and diplomatically left Chinese 

policymakers and business officials trying to understand Venezuela’s deepening crisis and how 

to manage their exposure to it. How did Chinese analysts and officials get their assessments of 

Venezuelan political risk so wrong, and what does the Chinese government’s response, or lack 

thereof, say about who is learning what from China’s troubled ties to the nation? 

The emergence of this dysfunctional China-Venezuela relationship is a result of the confluence of specific factors. Venezuela under Hugo Chávez was looking for new oil and diplomatic 

partners just as China was seeking to expand its sources of overseas oil supplies while also 

working to build new diplomatic partnerships in the Americas (and in other parts of the Global 

South, such as Africa). On the Venezuelan side, Hugo Chávez was the key figure who made the 

relationship possible; on the Chinese side, the key actor was the country’s biggest and most 

powerful bank, the CDB. If Hugo Chávez aspired to be the twenty-first century’s Fidel Castro, 

then China’s CDB was looking to build on its massive domestic urban debt and development 

portfolio to become China’s premier state financier of overseas energy deals.15

THE VENEZUELAN SIDE

Venezuela’s eagerness to build a new oil and diplomatic relationship with China is explained 

in large part by Hugo Chávez’s petroleum-driven domestic and foreign policies in the first decade of the 2000s. After his 1999 election, Chávez announced his ambitions for a “Bolivarian 

revolution”—a set of policies that would entrench a populist authoritarian government, give the 

military a greater role in domestic politics, and oppose US-led globalization.16 Domestically, the 

Bolivarian revolution became increasingly linked to his management of the oil sector and to control of PDVSA in particular.17 Not only did Chávez radically restructure PDVSA in the early 2000s 

to ensure its political loyalty, he also set out to have Venezuela officially declared the most oilrich nation in the world, an effort in which Chinese firms played a role.18
8 SPECIAL REPORT 484 USIP.ORG

As part of his strategy to turn PDVSA and the country’s oil sector into a political tool and source 

of revenue, Chávez also used the country’s oil resources to fuel his new, more provocative foreign 

policy. Especially in the Andes and the Caribbean, Chávez used two structures, ALBA (Bolivarian 

Alliance for the Peoples of Our America) and the PetroCaribe program, an oil-lending scheme he 

signed in 2005, to provide oil at preferential rates as a way to strengthen regional political alliances.19

Key factors in putting together these petroleum-based alliances were dilution of US influence 

and interest in Latin America and the Caribbean, and a related effort to wean Venezuela and its 

regional allies off dependence on crude exports to the United States. China, along with Russia and 

India, was to become central to Venezuelan efforts to diversify the country’s oil export markets and 

diplomatic partnerships. Thus, as part of Chávez’s oil-based domestic and foreign policies, by the 

midway point of the first decade of the 2000s, China came to be seen as an increasingly important 

commercial and diplomatic partner. Yet even as Venezuela sought to decrease its energy export 

dependence on the US market, the US shale revolution took off, with the result that US demand 

for Venezuelan crude played an increasingly marginal role in the US oil market and in US calculations about Venezuela’s leverage in their bilateral relationship. By 2014 it was clear that the United 

States had become markedly less dependent on Venezuelan oil, while China was increasingly 

entangled in burdensome state-backed lending, oil, and diplomatic ties to Venezuela.20

THE CHINESE SIDE

If Chávez sought closer ties with China as a key element of his petroleum-based domestic and foreign policy agendas, Chinese business and foreign policy officials were also eager to jump headfirst into a renewed commercial and diplomatic partnership. China’s deepening ties to Chávez’s 

Venezuela seem to fit squarely into the pattern and rhetoric of the country’s foreign policy with 

Latin America in the new millennium. Starting in the early 2000s, China’s demand for mineral, energy, and agricultural products drove a rapid increase in trade and diplomatic ties to commodityrich South American countries.21 In the nation’s first 2008 white paper and in new high-level 

diplomatic visits, Chinese officials claimed that these burgeoning relationships were the product 

of complementarities based on natural comparative advantage and were therefore “win-win.”22

Insofar as China had become a net oil importer as early as 1994 and was intent on increasing 

and diversifying its sources of oil import partners, China’s interest in Venezuela as a petroleum 

partner fit logically into the country’s energy security aims. Whatever concerns Chinese firms, 

banks, and foreign policy officials may have had about Chávez’s radical domestic and foreign 

policies, they forged ahead, insisting that Chinese demand for, and Venezuelan supplies of, oil 

would provide the necessary stability in the relationship.23

Yet the way China chose to engage with Venezuela, in particular through unprecedentedly 

large state-to-state loans-for-oil deals, not only highlights the particularities of the relationship 

but also sheds light on miscalculations that were made in specific efforts to manage risk. Starting 

around 2007, the CDB signed a series of loan agreements with Chávez and the PDVSA according to which the loans would be repaid through oil sales to China. While on the surface, this 

loan structure accords with the Angola model of commodity-backed loans in Africa, it differed in 

terms of the size of the loans to Venezuela (lending to Venezuela surpassed all Chinese loans 

to Africa) and because the CDB, rather than the China Export-Import Bank, was the key Chinese 
USIP.ORG SPECIAL REPORT 484 9

financial institution involved.24 In the years after the global financial crisis of 2008–09, the CDB 

was just emerging on the global stage as a major financier of Chinese energy deals. It was in 

South America, and Venezuela in particular, that the CDB took the biggest plunge. 

To put the situation in perspective, from 2005 to 2011 alone, the CDB was responsible for 

more than 80 percent of Chinese loans to Latin America and the Caribbean, with Venezuela 

being the largest recipient by far.25 At that time, the CDB’s loans-for-oil deals constituted close 

to 60 percent of its overall loan exposure to Latin America and the Caribbean. Indeed, the 

CDB’s outsized exposure to Venezuela, with over $60 billion lent since 2007, still constitutes the 

bank’s, and China’s, largest exposure anywhere in the world. (China’s lending to Venezuela and 

other countries of the region is shown in figure 1.) In other words, the CDB, acting in the name of 

the Chinese government, placed a $60 billion bet, the largest it would place anywhere, on the 

riskiest country not just in Latin America but arguably in the world.26 And while bank officials and 

FIGURE 1. 

Source: Kevin P. Gallagher and Margaret Myers, “China-Latin America Finance Database,” Inter-American Dialogue, www.thedialogue.org/map_list.

Chinese Lending to Latin America 

and the Caribbean, 2007–19

The China Development Bank and China Export-Import Bank have provided $138 billion

in loans to governments and state-owned enterprises throughout Latin America and the

Caribbean since 2007. About 45 percent has gone to Venezuela.

Venezuela

Brazil

Ecuador

Argentina

Trinidad and Tobago

Bolivia

Jamaica

Mexico

Bahamas

Dominican Republic

Suriname

Costa Rica

Cuba

Guyana

Barbados

Peru

$0 $10 billion $20 billion $30 billion $40 billion $50 billion

● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 17 loans / $62.2 billion

● ● ● ● ● ● ● ● ● ● ● 11 loans / $28.9 billion

● ● ● ● ● ● ● ● ● ● ● ● ● ● ●  15 loans / $18.4 billion

● ● ● ● ● ● ● ● ● ● ● ●  12 loans / $17.1 billion

● ● ● 3 loans / $2.7 billion

● ● ● ● ● ● ● ● ● 9 loans / $2.4 billion

● ● ● ● ● ● ● ● ● ● ● 11 loans / $2.1 billion

● 1 loan / $1 billion

● ● 2 loans / $0.99 billion

● 1 loan / $0.6 billion

● ● ● ● 4 loans / $0.58 billion

● 1 loan / $0.395 billion

● ● ● 3 loans / $0.24 billion

● ● 2 loans / $0.175 billion

● 1 loan / $0.17 billion

● 1 loan / $0.05 billion
1 0 SPECIAL REPORT 484 USIP.ORG

some Western analysts had previously argued that the loans-for-oil structure of the deals was 

meant to ensure that as long as Venezuela had oil in the ground, it would eventually be able 

to repay the loans, the post-Chávez realities of Venezuela have upended these expectations. 

After Chávez, Chronic Crisis

Since Chávez’s death in 2013 and the dramatic drop in global oil prices that began in 2014 (followed recently by an even more dramatic plunge), Venezuela has been in a steady downward 

spiral. It has one of the highest inflation rates in the world. Its oil production and exports have 

plummeted to levels not seen in decades. Nicolás Maduro, still tenaciously clinging to power, 

has long proven himself a much less adept politician than Hugo Chávez and has come to rely on 

draconian economic, security, and political measures to ensure that he and his Chavista support 

coalition remain in power. For China, Venezuela’s post-Chávez descent into crisis and chaos has 

meant that few if any of the promised benefits of the relationship have been borne out.27 Rather, 

China’s economic and geostrategic interests in Venezuela, and potentially its reputation among 

Venezuela’s neighbors, have all been threatened. 

Even before Chávez’s death, China had hoped to have preferential access to Venezuela’s 

vast Orinoco Belt petroleum reserves, yet because of the chaotic state of Venezuela’s oil sector 

and of PDVSA in particular, Chinese firms have not been able to pump significant new flows of 

upstream Venezuelan crude.28 Challenges to more upstream Chinese investment have long 

included restrictive PDVSA joint venture rules and the high costs of accessing and processing 

Orinoco crude. But at least since 2014, as a result of PDVSA’s own mismanagement and investment shortfalls and the difficulty of accessing dollars for necessary equipment imports because 

of the byzantine exchange-rate policies, all exacerbated by US sanctions on Venezuela’s oil exports, Venezuelan crude production and exports have fallen to historic lows.29 In fact, the actual 

flow from Venezuela into Chinese hands has always underperformed the claimed promises of 

up to one million barrels per day, rarely achieving even half that amount (equating to less than 

5 percent of China’s oil imports in any given year). 

Moreover, many of the petroleum resources that come to Chinese firms and banks through 

the deals have ended up being resold in the US market, potentially exposing China to existing 

or future US sanctions.30 In the wake of the dramatic drop in global oil prices in 2014, Venezuela 

was forced to ask for renegotiated terms for its debts to China, essentially entering into a form of 

de facto default. In consequence of all these challenges, Chinese lending has since slowed to a 

trickle, with no new loans to Venezuela issued since 2016 and only one loan tranche refreshed.31

Though maintaining accurate and updated figures on China’s oil-related loans to Venezuela has 

long been a challenge owing to the opacity and secretive, high-level dealmaking on both sides, it 

is estimated that Venezuela still owes around $20 billion in crude-linked debt payments to China.32

And yet, since 2014, China has not completely cut off flows of financial or diplomatic support to Venezuela.33 China has steadfastly refused to publicly criticize or abandon diplomatic 

support for the Maduro government or even to admit that any problems exist in Venezuela or 

in the Chinese-Venezuelan relationship. When pressed, Chinese foreign policy officials have 
USIP.ORG SPECIAL REPORT 484 11

consistently said they stand by their commercial and diplomatic commitments to Venezuela, will 

not interfere in Venezuela’s internal affairs, and hope for stability there. A typical press release 

from China’s official Xinhua press agency stated that China “voiced support for Venezuela’s efforts in safeguarding its sovereignty, independence and stability as well as opposition to foreign 

interference in the South American country’s internal affairs.”34

Some less official voices have long been more critical. There are reports of meetings at which 

Chinese oil-sector leaders argued for letting the current Venezuelan leadership sink under its 

own weight.35 And various Chinese media outlets, including the financial paper Caixin, have been 

keen to explore the reasons behind Venezuela’s crisis and to explain China’s exposure to, and 

role in, facilitating it.36 While attracting less attention than the diplomatic or financial components 

of the relationship, other Chinese-linked projects related to the special funding vehicles have 

been co-opted as part of Chavista political campaigns or have simply failed to materialize. For 

example, Chávez and Maduro have used fungible Chinese financing in overt displays of political 

largesse, giving away Chinese-branded appliances and building Chinese-contracted housing projects, while a high-profile Chinese-backed railway project was derailed by poor planning and corruption.37 By 2017, because of the already-dire economic situation and threats to physical safety, 

Government supporters hold up posters featuring, from left, the late Venezuelan leader Hugo Chávez, President Nicolás Maduro, and 

independence hero José Félix Ribas, during an event at the Miraflores Presidential Palace on February 12, 2020. (Photo by Matias Delacroix/AP)
1 2 SPECIAL REPORT 484 USIP.ORG

hundreds of thousands of Chinese citizens and members of ethnic Chinese communities that 

had settled and worked in Venezuela for generations had begun to flee Venezuela and return to 

China.38 Yet despite the broad array of setbacks in China’s ties to Venezuela, the Chinese government has never officially veered from its official support of either Chávez or Maduro.

Stalemate, Opposition Strategy,

and the US-China Rivalry

Even as Venezuela’s crisis has plunged to ever greater depths, China has sat on the diplomatic 

sidelines by continuing to maintain its status quo support of Maduro while rejecting calls to recognize his opponent, Juan Guaidó. China’s conservative, head-in-the-sand diplomatic stance, 

however, belies an effort to maximize leverage over an increasingly desperate and friendless 

Maduro regime while also attempting not to alienate the Guaidó interim government, with which 

China may one day have to officially work. Thus, on the surface, Chinese-Venezuelan relations 

appear frozen in time, while beneath the surface, Chinese officials and firms maneuver in a 

high-risk game. China, however, is not the only outside actor, as both Russia and Cuba have continued to provide diplomatic, economic, and military support to Venezuela even as the United 

States has taken a much more critical and punitive approach to the Maduro regime and its 

supporters, including China. Ultimately, Venezuela’s complex internal power struggles and the 

behavior of outside actors, including both its neighbors and international financial institutions, 

will constrain and shape China’s strategic calculations about the nation. 

MADURO’S SYMBOLIC DEALMAKING WITH RUSSIA AND CHINA

Since early 2019, when Nicolás Maduro was sworn in for a second term after having crippled the opposition-led National Assembly in 2017, the Maduro administration has seen its regional and broader 

international legitimacy and support dwindle. More than fifty countries have recognized the interim 

Venezuelan government and Juan Guaidó as the country’s legitimate president.39 In the face of 

these trends, Maduro has been keen to demonstrate that his government has commercial and diplomatic alternatives, especially with Russia and China but also with its longtime ally Cuba. To do so, 

Maduro has actively sought new loan and oil deals with both the Chinese and Russian governments. 

Initially, Russian politicians and oil companies showed greater willingness than their Chinese 

counterparts to support a range of dealmaking with the Maduro government. In fact, just as the 

United States was beginning to take a more active approach in favor of the Guaidó administration, 

the Russian government and Russian oil firms, led by Igor Sechin and Rosneft, began to openly 

double down on their support for the Maduro regime.40 But Russia’s, and Rosneft’s, gamble took a 

dramatic turn in March 2020 when Rosneft sold its Venezuelan assets to the Russian government.41

Russia has not completely folded on its Venezuelan gamble—it has continued diplomatic support 

and military aid—but China clearly remains the Maduro government’s primary economic lifeline.42

Even while continuing to officially support Maduro, Chinese diplomats have been more 

muted in their support than their Russian counterparts. Chinese diplomats have consistently, if 
USIP.ORG SPECIAL REPORT 484 13

predictably, criticized outside interference in Venezuelan 

politics, called for a negotiated solution to Venezuela’s political crisis, and fallen back on hopes for their version of 

Venezuelan stability and development. Behind the scenes, 

however, Chinese officials and businesses have been active in attempts to shore up the relationship. Though new 

flows of official finance from the CDB have been cut off 

since 2016, a wide range of other dealmaking has taken 

place. Only some of that, for instance a 2019 agreement for greater Chinese participation in 

expansion of the oil-processing joint venture Sinovensa, has focused on energy cooperation.43

Other sectors are attracting attention: for example, on a 2018 visit to China, Maduro signed 

twenty-eight deals, including some for satellite cooperation and ZTE telecommunications equipment. Yet as Venezuela’s economic crisis and diplomatic isolation have worsened, big-ticket 

deals have been more difficult to bring to fruition. The core element of the relationship, the oil 

trade, has been increasingly forced into contortions to avoid US sanctions, while Chinese investments in Venezuela’s energy grid have failed to ensure stable power supplies.44 Moreover, 

Russia, not China, has been behind efforts to provide Venezuela with a new cryptocurrency.45

Even Venezuela’s key communications satellite, built by a Chinese firm, has ceased to function 

properly.46 China has supplied medical equipment to Venezuela amid the coronavirus crisis, 

yet such assistance cannot compensate for the crisis in Venezuela’s health care system.47 To 

further underscore continued political cooperation, as part of the 2018 visit, Maduro also signed 

a memorandum of understanding to participate in China’s Belt and Road Initiative (BRI). Yet 

every element of this dealmaking has been controversial: the Sinovensa agreement has been 

undermined by corruption scandals, ZTE has provided the Maduro government with digital surveillance technology, and Venezuela signing on to the BRI is a further provocation at a time of 

heightened US concern about the initiative.48

Even as China maintains its support for the political status quo in Venezuela through its diplomatic backing of Maduro, and its firms attempt to capitalize on opportunities opened up by 

Venezuela’s economic wreckage, there exists a range of additional forces and actors that will 

further complicate China’s calculations. These include the Venezuelan opposition’s China strategy, the ongoing US pushback against Maduro’s efforts to prolong his authoritarian grip on 

Venezuelan politics and against China’s role in Latin America more generally, and events within 

Venezuela itself. 

GUAIDÓ’S CHINA STRATEGY

The Venezuelan opposition, led by Juan Guaidó, has not only actively and successfully courted 

international diplomatic support from many of Venezuela’s neighbors, as well as the United States 

and the EU, it has also sought to convince China of the wisdom of recognizing the Guaidó administration and to dissuade it from maintaining its support for the Maduro regime. The most direct 

and open of such appeals came in April 2019, when Guaidó called for China to recognize his 

interim government in an editorial published on the Bloomberg website. In “Why China Should 

Switch Sides in Venezuela,” Guaidó argued that his administration would be able to provide the 

The core element of the relationship, 

the oil trade, has been increasingly 

forced into contortions to avoid US 

sanctions, while Chinese investments 

in Venezuela’s energy grid have failed 

to ensure stable power supplies.
1 4 SPECIAL REPORT 484 USIP.ORG

kind of effective governance necessary to sustain the stability and economic prosperity China 

says it hopes for in Venezuela.49 In a clear allusion to China’s long insistence on commodity complementarity as the basis for the relationship, Guaidó began the editorial by noting that “China is 

the world’s largest oil importer and Venezuela has the largest proven oil reserves in the world.” 

Looking beyond oil, Guaidó left the door open for China to play a cooperative role in the broader 

rebuilding effort that would be needed if and when the interim government comes to power.

Even as Guaidó and his colleagues have advanced positive arguments for why recognizing 

the interim government would be in China’s interest, they have also made clear that China faces 

economic and reputational risks if it continues to support Maduro. To this end, a dedicated team 

within the interim government in Bogotá has been actively seeking to convince China that its 

long-term interests are not best served by continuing on that path. In a document titled “A Role for 

China in Venezuela’s Transition Process,” this China-focused team emphasized that “among the 

several countries that help keep [Maduro] afloat ... the one with the greatest political and economic 

influence is the People’s Republic of China.”50 The report notes that China’s reputation as a trusted 

development partner in Latin America and the Caribbean, manifested by, among other things, the 

recent extension of its signature BRI project to the region, is imperiled by the legacy of “corrupt 

Opposition leader Juan Guaidó speaks during a press conference in Caracas, Venezuela, on March 9, 2020. (Photo by Matias Delacroix/AP)
USIP.ORG SPECIAL REPORT 484 15

and ruined” Chinese projects in Venezuela.51 One prominent example of a reputational cost that 

had to be paid was when the Inter-American Development Bank annual meeting, scheduled to 

take place in Chengdu, China, in late March 2019, was canceled when China refused to allow 

Guaidó’s representative to attend on behalf of the Venezuelan delegation.52

Economically, the interim government’s China policy advisers argue that the result of China’s 

dealmaking with the Chávez and Maduro governments, including the over $60 billion in 

loans, was that “not a single significant project has been carried to completion,” and instead, 

Chinese economic interests have been systematically undermined by the close association 

with Chavistas. Left unspoken is the long-standing possibility that a Guaidó-led government 

might declare Chinese loans “odious” or “illegitimate,” thereby paving the way for debt restructuring or outright repudiation.53 Ultimately, though, the interim government is keen to appeal to 

China’s often-stated desire for stability, which, it believes, has been systematically undermined 

by Chavista misrule and would be rebuilt under a Guaidó administration. The opposition is keen 

to emphasize that China playing a role in helping Venezuela move from chaos to stability would 

also redound positively to China’s reputation in Venezuela and in the broader Latin America and 

Caribbean neighborhood. 

EFFECTS OF US-CHINA GEOSTRATEGIC RIVALRY

At the same time, the opposition interim government is also clearly associated with the Trump 

administration’s efforts to promote a change in the status quo in Venezuela. Under the Bush 

and Obama administrations, there were serious and rising concerns about the direction of 

Venezuelan domestic and foreign policies, but under the Trump administration Venezuela has 

attracted much greater public policy attention from the United States. This has entailed not only 

a ratcheting up of sanctions against individual Venezuelans and the export of Venezuelan oil but 

also more direct support for the Guaidó-led opposition. A high-profile signal of such continued 

support was President Trump’s invitation to Guaidó to sit in the president’s box during the State 

of the Union speech in February of 2020. 

The Trump administration’s continued criticisms of the Maduro regime, its bilateral and multilateral efforts to pressure Maduro to step aside or allow for new elections, and its support for 

the interim Guaidó government all stand in contrast to China’s public positions and policies in 

support of Maduro. As part of a broader pushback against China’s role in developing regions 

such as Latin America, Africa, and Southeast Asia, the Trump administration has targeted the 

China-Venezuela relationship as the key concern in the Americas. Since at least early 2018, 

Trump administration officials have been clear in pointing to differences in US and Chinese 

policy positions with regard to Venezuela. In early 2018, on the eve of a trip to Latin America in 

which Venezuela was to feature prominently, then secretary of state Rex Tillerson observed that 

“China’s offers always come at a price.”54 US secretary of state Mike Pompeo has been even 

more direct in his criticism of China’s role in Venezuela, arguing in a speech in Chile in April 

2019 that “China’s bankrolling of the Maduro regime helped precipitate and prolong the crisis 

in that country.”55 Then national security adviser John Bolton underlined the consequences for 

continued Chinese (and Russian) support for the Maduro regime when in August 2019 he said 

that an executive order authorizing new US sanctions against Venezuelan assets and business 
1 6 SPECIAL REPORT 484 USIP.ORG

transactions could also be extended to “foreign persons 

who provide support or goods or services to any designated person, including the government of Venezuela.”56

Prior to Rosneft’s recent decision to sell its Venezuelan 

oil assets to the Russian government out of concern it 

might get caught up in US sanctions, Russia had seemed 

to be more willing than China to openly flaunt its continued oil and other deals with Venezuela.57

While Chinese firms may have been less willing to publicly defy the new US sanctions, there is 

evidence that they have used loopholes and the cover of Russian-flagged vessels to transport 

and sell Venezuelan crude. The Trump administration’s continued support for the opposition 

interim government under Juan Guaidó, the US pushback against China’s role in Latin America, 

and the broader scaling up of the US-China strategic rivalry all mean that the possibility of 

Chinese firms becoming more entangled in US sanctions of Venezuela is real.

China’s official responses to pressure from the more assertive US position on Venezuela under 

the Trump administration have so far been highly defensive and critical. China has characterized 

its role in Venezuela as that of an apolitical development partner while criticizing the United States’ 

history of interference in the domestic affairs of countries in Latin America and the Caribbean. 

Even during the Obama administration, some Chinese think tank analysts and officials entertained 

conspiratorial theories about US intentions to undermine China’s position in Venezuela and elsewhere in the Americas, mentioning efforts to work with the Venezuelan diaspora in Colombia and 

the United States. Almost all such theories sidestepped the difficult realities of China’s commercial 

and diplomatic relations with Venezuela under both Chávez and Maduro.58

Yet as Chinese government ministries, state-owned enterprises, and policy banks have become more aware of political and economic risk in regions such as Latin America where China’s 

financial and investment ties have expanded in recent decades, Venezuela has come to feature more prominently in Chinese internal debates as an example of a country where risk was 

misdiagnosed.59 Such analyses tend to focus on the risks associated with China’s loans-foroil arrangements with Venezuela, yet from the outset it was clear that China’s dalliance with 

Venezuela included calculations about the benefits of close ties to a country that was at the 

very least a thorn in the side of the United States. China has long viewed expanded ties to 

Latin America and the Caribbean as a counterweight to US influence in East Asia (especially 

Southeast Asia), and thus its relations with Chavista Venezuela have always been conducted at 

least partly as a conscious provocation. 

Now that the US-China strategic rivalry has blown open, and China’s ties to Venezuela are 

at the center of that rivalry in the Americas, it is unclear whether Chinese officials have an exit 

strategy. After years of “poking the (US) bear,” China’s supposed proclivity for making long-run 

calculations looks more like indecision. As Venezuela’s financial crisis deepens, its role as an 

example of unsustainable Chinese lending is likely to reemerge as Latin America and the international community grapple with multilateral efforts at debt forgiveness and loan restructuring. 

In a setting of tense US-China rivalry, it is increasingly unlikely that China will participate in political transition and economy recovery packages if such efforts are primarily led by the United 

States.60 Venezuela thus stands out both for its potential to be an even greater focal point in 

China’s dalliance with Venezuela included 

calculations about the benefits of close 

ties to a country that was at the very least 

a thorn in the side of the United States.
USIP.ORG SPECIAL REPORT 484 17

US-China tensions and for the increasing likelihood that multilateral efforts to get Venezuela 

back on its feet will be slowed or will fail as a result of Sino-American friction.

Considerations of unilateral US pressure for China to change its stance aside, any calculations about what might alter the status quo of stalemated China-Venezuela relations must also 

include the direction of domestic Venezuelan politics and the role of the nation’s neighbors and 

the broader international community in helping broker a negotiated political resolution to its 

political crisis. For example, the Lima Group has been active in seeking regional solutions to the 

Venezuelan crisis, while Norway has sponsored negotiations between the Maduro government 

and the interim Guaidó government. Though such regional and international efforts have yet 

to achieve a breakthrough on the political front, it is far likelier that China would at least voice 

support for a settlement resulting from multilateral talks. Yet as China attempts to understand 

the political winds in Venezuela and influence outcomes to its advantage, a more unilateral or 

behind-the-scenes form of intervention can’t be completely counted out. 

Here, looking to the example of Zimbabwe might prove prescient. In the case of Robert 

Mugabe’s drawn-out political downfall, which finally came to a head in 2017, China persisted 

in its official public support, despite long-simmering dissatisfaction, while waiting for Mugabe’s 

eventual demise.61 In some ways, China’s close relationship with Mugabe, however, soured; 

Zimbabwe’s long-term economic and political crisis, which undercut Chinese interests in the 

country; and a complex array of domestic and regional actors with an interest in the outcome all 

are mirrored in China’s predicament in Venezuela.62 The differences, however, include Venezuela 

as the most dysfunctional of all of China’s partners in Latin America and the Caribbean and the 

fact that the drama playing out in the Americas is doing so in the context of a growing US-China 

rivalry. Though China was able to emerge from the end of the Mugabe era as a key economic 

player in Zimbabwe, with plans in hand to construct the country’s new parliament building, it is 

far from obvious that China will emerge as unscathed from its troubled ties with Venezuela.63

Conclusions: Learning from 

China’s Mistakes 

The China-Venezuela relationship is important, largely as a cautionary tale, at a number of 

levels. On its own terms, the relationship between the two countries has failed to live up to the 

economic potential that political and business leaders on both sides envisioned. And though 

Chávez and Maduro were able to secure valued financial resources and diplomatic cover from 

China, China has been exposed to the vicissitudes and widespread impacts of Chavista misrule 

that its economic and political support helped enable in the first place. Regionally, the floundering China-Venezuela relationship underscores how far China’s win-win rhetoric and promises, based on commodity complementarity with South America, have turned into something far 

closer to lose-lose patterns associated with historical Latin American commodity dependence 

and resource curses. Chinese foreign policy and policy bank officials entered into their outsize economic and political relationship with China with a combination of hubris, ambition, and 
1 8 SPECIAL REPORT 484 USIP.ORG

naïveté about the country and the region that has contributed to the region’s worst economic, 

humanitarian, and political crisis in decades. 

The China-Venezuela relationship is also an indictment of China’s diplomacy with other developing regions such as Africa and parts of Southeast Asia. China promised to be a different kind 

of development partner and ally, but as Venezuela descended into crisis, China stood on the 

sidelines. Rather than offering to cooperate in regional or other multilateral solutions to the economic, humanitarian, and political crisis, China instead resorted to platitudes about its support for 

Venezuelan stability and sovereignty. Moreover, difficulties in the nations’ loans-for-oil relationship 

long predated concerns about China’s unsustainable development finance. Such problems are 

both a result of opaque, state-to-state, unaccountable dealmaking and an ongoing example of 

how such dealings can work against both parties’ interests, undermining economic and political 

stability and contributing to broader patterns of political and potentially violent conflict. 

China-Venezuela relations are, therefore, an active case study for other countries whose leaders 

have entered into troubled and unsustainable lending and investment ties with China. In Southeast 

and South Asia, countries such as Malaysia, Myanmar, Thailand, and Sri Lanka, among others, have 

all been involved in renegotiating infrastructure and energy deals with China that went awry in 

one way or another. In many of those cases, as in Venezuela, politicized, corrupt, or simply poor 

dealmaking was to blame for deals that were financially, environmentally, socially, or politically disruptive or unsustainable. In this comparative context, and at a time of growing anxiety and debates 

over what China will do in places where it has become a key lender, those concerned about its 

unsustainable development finance will be watching to see whether China again chooses opaque, 

bilateral debt restructuring with Venezuela, or whether it instead changes course to participate in 

regional or other multilateral efforts to restructure Venezuela’s debt burden.64 China’s recent agreement to participate in a multilateral debt restructuring deal with Angola, where the CDB has lent 

more money than anywhere else in Africa, highlights just how little responsibility China has taken to 

help set Venezuela on a more sustainable path. The lessons learned by the various stakeholders 

in the troubled China-Venezuela relationship will bear heavily on the future of that relationship and 

on China’s broader efforts to be seen as a leader of international development. 

At the level of great power relations, China’s foray into its still unprecedented loans-for-oil arrangement and its close political association with Chavista Venezuela had from the start the potential to become points of friction in the US-China relationship. Even if China’s calculations that 

these close oil and political ties would fit into broader commodity-based ties to Latin America 

and build on decades’ worth of third world diplomatic rivalry in the region, forging close ties with 

Chávez always had the potential to be provocative.65 After all, Chávez inherited Fidel Castro’s 

revolutionary and anti-US legacy (if more in thought than in deed), a fact that should not have 

been lost on Chinese officials as they created their special relationship with Chávez in the first 

decade of the twenty-first century. Though the China-Venezuela relationship is not a primary 

cause of the increasing geostrategic rivalry between the United States and China, it is arguably 

now the most contested site of that rivalry in the Americas. 
USIP.ORG SPECIAL REPORT 484 19

Notes

1. Henry Sanderson and Michael Forsythe, China’s Superbank: Debt, Oil and Influence. How China Development Bank Is 

Rewriting the Rules of Finance (Hoboken, NJ: Bloomberg Press, 2013).

2. Chavismo refers to the personalized, populist style of political leadership forged by Hugo Chávez during his years as 

Venezuela’s president, from 1999 until his death in 2013, and then continued by his successor and current president, Nicolás 

Maduro; Chavista describes adherents to and embodiments of Chavismo. See Javier Corrales and Michael Penfold, Dragon in 

the Tropics: Hugo Chávez and the Political Economy of Revolution in Venezuela (Washington: Brookings Institution Press, 2015).

3. In its twenty-first-century developing country diplomacy, China has tended to focus on broad geographic areas such as “Latin America” 

and “Africa,” rather than on distinguishing among subregions. For example, in its multilateral forums (such as the Forum on China-Africa 

Cooperation) for structuring regionwide dialogues, China has relied on just such general geographic designations. However, within 

the wider Latin America and Caribbean region there have been clear subregional differences in the nature of China’s commercial and 

diplomatic engagement. For example, South America has been the primary source of commodity exports to China, while Chinese 

engagement with the Caribbean and Central America has involved more Chinese aid, and the China-Mexico relationship has been 

characterized by a high degree of commercial competition. Within developing East Asia, China’s economic diplomacy has been more 

attentive to finer-grained subregional distinctions, including, for instance, the Mekong region within continental Southeast Asia.

4. For more on the details of China’s ambitions for third world leadership, especially in the 1950s and 1960s, see Jeremy Friedman, 

Shadow Cold War: The Sino-Soviet Competition for the Third World (Chapel Hill: University of North Carolina Press, 2015), and Gregg A. 

Brazinsky, Winning the Third World: Sino-American Rivalry during the Cold War (Chapel Hill: University of North Carolina Press, 2017). 

5. For example, see State Council, People’s Republic of China, “China’s Peaceful Development,” September 2011, http://english

.www.gov.cn/archive/white_paper/2014/09/09/content_281474986284646.htm. A precursor to the 2011 white paper was the 

2005 “China’s Peaceful Development Road,” China Daily, www.chinadaily.com.cn/english/doc/2005-12/22/content_505678.htm. 

6. For more on the linkages between the domestic and foreign policy in Chinese official rhetoric and policies concerning development, on the one hand, and stability and peace on the other, see Matt Ferchen and Renny Babiarz, “The Development-Stability 

Nexus at Home and Abroad,” University of Nottingham Asia Research Institute, October 5, 2017, www.theasiadialogue.com

/2017/10/05/the-development-stability-nexus-at-home-and-abroad. 

7. See David Cohen, “‘Development Is the Key to Peace’: Chinese Leaders Discuss Future of Asia,” Jamestown Foundation, 

May 23, 2014, www.jamestown.org/program/development-is-the-key-to-peace-chinese-leaders-discuss-future-of-asia. 

8. Ministry of Foreign Affairs, People’s Republic of China, “Wang Yi: Development Is the Master Key to Solving All Problems,” 

September 28, 2019, www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1704158.shtml.

9. See Carlos de la Torre and Cynthia J. Arnson, eds., Latin American Populism in the Twenty-First Century (Washington: Woodrow 

Wilson Center Press with Johns Hopkins University Press, 2013). 

10. See the Inter-American Dialogue’s China-Latin America Finance Database, www.thedialogue.org/map_list. 

11. For an accessible overview of China’s different types of diplomatic partnerships, see the “Quick Guide to China’s Diplomatic 

Levels,” South China Morning Post, January 20, 2016, www.scmp.com/news/china/diplomacy-defence/article/1903455/quick

-guide-chinas-diplomatic-levels. 

12. Matt Ferchen, “Crude Complications: Venezuela, China, and the United States,” Carnegie-Tsinghua Center for Global Policy, 

October 23, 2014, www.carnegietsinghua.org/2014/10/23/crude-complications-venezuela-china-and-united-states-pub-56996. 

13. Author interviews, Beijing, 2011–2012. In the buildup to and during the 2012–2013 Chinese leadership transition, foreign policy 

advisers were keen to inform the incoming leadership about the status of various foreign policy relationships and especially any 

issues that might become problems in the coming months and years.

14. See the Inter-American Dialogue’s China-Latin America Finance Database. 

15. On the origins of the CDB’s global aspirations, including in Venezuela, see Sanderson and Forsythe, China’s Superbank, 

and Erica Downs, Inside China, Inc.: China Development Bank’s Cross-Border Energy Deals, John L. Thornton China Center 

Monograph no. 3 (Washington: Brookings Institution, 2011).

16. Harald A. Trinkunas, “Defining Venezuela’s ‘Bolivarian Revolution,’” Military Review, n.d., www.armyupress.army.mil/special-topics

/world-hot-spots/venezuela/defining-venezuela.

17. Corrales and Penfold, Dragon in the Tropics.

18. Ferchen, “Crude Complications.”

19. Corrales and Penfold, Dragon in the Tropics.
2 0 SPECIAL REPORT 484 USIP.ORG

20. Ferchen, “Crude Complications.” 

21. Matt Ferchen, “China–Latin America Relations: Long-Term Boon or Short-Term Boom?,” The Chinese Journal of International 

Politics 4, no. 1 (Spring 2011): 55–86.

22. Government of China, “China’s Policy Paper on Latin America and the Caribbean,” 2008, www.gov.cn/english/official/2008-11/05

/content_1140347.htm. 

23. Sun Hongbo, “Can the China-Venezuela Cooperation Model Be Duplicated?” [in Chinese], Hexun.com, April 7, 2011, 

http://opinion.hexun.com/2011-04-07/128542602.html. 

24. Jiang Heng, Out of the Mine Fields and Blind Areas of Overseas Investment Security: Conflict Risk Assessment and Management [in 

Chinese] (Beijing: China Economic Publishing House, 2013). Regarding the different financial institutions: In part because it had been 

active in vetting and financing loans-for-infrastructure deals in Africa for many years prior to the CDB’s foray into Venezuela, the China 

Export-Import Bank had at least established a risk management division and guidelines. When asked to compare the CDB’s risk assessment with that of the Export-Import Bank, one official responded simply, “What CDB risk assessment?” (author interview, Beijing, 2013). 

25. Kevin P. Gallagher, Amos Irwin, and Katherine Koleski, “The New Banks in Town: Chinese Finance in Latin America,” 

Inter-American Dialogue, March 2012, www.thedialogue.org/wp-content/uploads/2012/02/NewBanks_FULLTEXT.pdf.

26. For an updated overview of China’s loans to Venezuela between the years 2000 and 2018, see Carlos Eduardo Piña, “Inversiones 

y préstamos chinos en el sector petrolero venezolano (2000–2018)” [Chinese investments and loans to the Venezuelan petroleum 

sector (2000–2018)], Cuadernos de Trabajo del Cechimex, no. 1 (2019), http://dusselpeters.com/CECHIMEX/Revista_Cchmx_1_2019.pdf. 

27. Matt Ferchen, “Can China Help Fix Venezuela?,” Carnegie Endowment for International Peace, July 24, 2017, 

www.carnegietsinghua.org/2017/07/24/can-china-help-fix-venezuela-pub-71564. 

28. Ferchen, “Crude Complications.”

29. Emiliana Disilvestro and David Howden, “Venezuela’s Bizarre System of Exchange Rates,” Mises Wire, January 7, 2016, 

www.mises.org/library/venezuelas-bizarre-system-exchange-rates. 

30. Matt Ferchen, “China, Equity Oil and Political Risk,” China Brief (Jamestown Foundation) 13, no. 3 (February 1, 2013), 

www.jamestown.org/program/china-and-venezuela-equity-oil-and-political-risk. 

31. See the Inter-American Dialogue’s China-Latin America Finance Database.

32. A much-circulated Harvard graduate student study from spring 2019 cites the $20 billion figure. See Thomas Moatti and Frank 

Muci, “An Economic Framework for Venezuela’s Debt Restructuring,” Harvard Kennedy School, March 2019, 10. For in-depth 

research on Chinese finance to Venezuela from 2000 to 2018, see Piña, “Inversiones y préstamos chinos.” 

33. While not technically a new line of finance, the CDB renewed Tranche B of the Joint Fund for $5 billion in 2015 (see the InterAmerican Dialogue’s China-Latin America Finance Database). In 2018, Maduro claimed that China had agreed to dispense 

a new $5 billion line of financing, but that claim remains in dispute; see Corina Pons and Christian Shepherd, “Venezuela’s 

Maduro Travels to China in Search of Fresh Funds,” Reuters, September 12, 2018, www.reuters.com/article/us-venezuela-china

/venezuelas-maduro-travels-to-china-in-search-of-fresh-funds-idUSKCN1LS2UL. 

34. Yang Yi, “China Voices Support for Venezuela’s Efforts in Safeguarding Sovereignty, Stability,” Xinhua, January 24, 2019, 

www.xinhuanet.com/english/2019-01/24/c_137771830.htm. 

35. Ferchen, “Can China Help Fix Venezuela?”

36. Caixin, “Internal Strife and the Struggle for Power in Venezuela” [in Chinese], August 6, 2018, http://weekly.caixin.com/2018-08

-04/101311628.html. 

37. Evan Ellis, “China’s Cautious Economic and Strategic Gamble in Venezuela,” China Brief (Jamestown Foundation), September 

30, 2011, www.jamestown.org/program/chinas-cautious-economic-and-strategic-gamble-in-venezuela; and Fermín Koop, 

“Chinese Rail Advances Slowly in Latin America,” Diálogo Chino, October 1, 2019, www.dialogochino.net/en/infrastructure

/30573-chinese-rail-advances-slowly-in-latin-america. 

38. He Huifeng, “As Venezuela Implodes, So Do the Dreams of Thousands of Fleeing Chinese,” South China Morning Post, August 

14, 2017, www.scmp.com/news/china/economy/article/2102922/venezuela-implodes-so-do-dreams-thousands-fleeing-chinese. 

39. Share America, “More Than 50 Countries Support Venezuela’s Juan Guaidó,” November 15, 2019, https://share.america.gov

/support-for-venezuelas-juan-guaido-grows-infographic. 

40. Vladimir Rouvinski, “Russia’s Continuing Engagement with Venezuela in 2019 and Beyond: An Update,” Latin America Program, 

Kennan Institute, Woodrow Wilson Center, February 2020 , www.wilsoncenter.org/publication/russias-continuing-engagement

-venezuela-2019-and-beyond-update. 

41. “Why Putin’s Favourite Oil Firm Dumped Its Venezuelan Assets,” Economist, April 2, 2020, www.economist.com/leaders

/2020/04/02/why-putins-favourite-oil-firm-dumped-its-venezuelan-assets. 
USIP.ORG SPECIAL REPORT 484 21

42. Rouvinski, “Russia’s Continuing Engagement with Venezuela.” 

43. “Sinovensa Works Halted on PdV Arrears,” Argus, September 5, 2019, www.argusmedia.com/en/news/1972352-sinovensa-works

-halted-on-pdv-arrears.

44. Bloomberg, “China Masks Oil Imports Via Ship Transfers as Sanctions Bite,” October 8, 2019, www.bloomberg.com/news/articles

/2019-10-08/china-oil-imports-from-ship-to-ship-transfers-surge-in-september. On power grid investments, see Jeanfreddy 

Gutiérrez, “Chinese Investment in Venezuela’s Grid Fails to Prevent Blackouts,” Diálogo Chino, January 16, 2020, 

www.dialogochino.net/en/climate-energy/32585-chinese-investment-in-venezuelas-grid-fails-to-prevent-blackouts. 

45. Nathaniel Popper, Oleg Matsnev, and Ana Vanessa Herrero, “Russia and Venezuela’s Plan to Sidestep Sanctions: Virtual 

Currencies,” New York Times, January 3, 2018, www.nytimes.com/2018/01/03/technology/russia-venezuela-virtual-currencies.html. 

46. Caleb Henry, “Venezuela’s Flagship Communications Satellite Out of Service and Tumbling,” SpaceNews, March 23, 2020, 

www.spacenews.com/venezuelas-flagship-communications-satellite-out-of-service-and-tumbling. 

47. “China’s Medical Outreach in LAC: Facts and Features,” Inter-American Dialogue, May 22, 2020, www.thedialogue.org/blogs

/2020/05/chinas-medical-outreach-in-lac-facts-and-features. 

48. For more on the controversial “Fatherland Card” technology, see Laura Vidal, “Venezuelans Fear ‘Fatherland Card’ May Be a 

New Form of Social Control,” The World, December 28, 2018, www.pri.org/stories/2018-12-28/venezuelans-fear-fatherland-card

-may-be-new-form-social-control. On the signing of BRI agreements as a point of friction in US-China relations in the Americas, 

see Matt Ferchen, “China’s Belt and Road Initiative in Latin America and the Caribbean,” International Institute of Strategic 

Studies, December 20, 2018, www.iiss.org/publications/strategic-comments/2018/chinas-bri-in-latin-america. 

49. Juan Guaidó, “Why China Should Switch Sides in Venezuela,” Bloomberg, April 14, 2019, www.bloomberg.com/opinion

/articles/2019-04-14/why-china-should-shift-support-to-guaido-in-venezuela. 

50. Parsifal D’Sola Alvarado, “A Role for China in Venezuela’s Transition Process,” Foreign Policy Brief, July 2019.

51. D’Sola Alvarado, “A Role for China.”

52. James Politi, “IDB Scraps Annual Meeting after China Excludes Venezuela,” Financial Times, March 23, 2019, www.ft.com/content

/7bbfbe10-4cfa-11e9-bbc9-6917dce3dc62. 

53. For a more extended treatment of the argument about, and consequences of, “odious” or “illegitimate” debt claims, see Moatti 

and Muci, “An Economic Framework for Venezuela’s Debt Restructuring.” The logic of such claims has been around for a number of years. For example, in China’s Superbank, Sanderson and Forsythe cite Moises Naim, Venezuela’s former trade minister, 

on the topic. Questions about legal dispute resolution mechanisms tied to Chinese overseas lending and investments, including 

as part of the BRI, are only likely to grow; see Matthew S. Erie, “Chinese Law and Development,” Harvard International Law 

Journal 62, no. 1 (forthcoming), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3552044. 

54. Rex W. Tillerson, “U.S. Engagement in the Western Hemisphere,” speech, University of Texas, Austin, February 1, 2018, 

www.state.gov/u-s-engagement-in-the-western-hemisphere. 

55. “Mike Pompeo Accuses China of Prolonging Venezuela Crisis with ‘Hypocritical’ Aid to Nicolás Maduro,” South China Morning Post, April 

13, 2019, www.scmp.com/news/world/united-states-canada/article/3006000/mike-pompeo-blames-hypocritical-chinese-aid-nicolas. 

56. Karen DeYoung, “Trump Administration Threatens Penalties on Russia, China for Aiding Venezuela’s Government,” Washington 

Post, August 6, 2019, www.washingtonpost.com/national-security/trump-administration-threatens-to-sanction-russia-china-for

-aiding-venezuelas-government/2019/08/06/0ed664b6-b852-11e9-bad6-609f75bfd97f_story.html. 

57. On the continued Russian role, see David Smilde, “Trump’s Shout-Out Masks a Bleak Outlook for Venezuela’s Guaidó,” New 

York Times, February 2, 2020, www.nytimes.com/2020/02/06/opinion/international-world/trump-guaido-venezuela.html. 

58. The comments in this paragraph are based on personal discussions between the author and Chinese officials and researchers.

59. China’s policy (or policymaking) banks—the China Development Bank, the Export-Import Bank of China, and the Agricultural 

Development Bank of China—are dedicated to specific lending purposes in line with official state policies and aims. Regarding 

Chinese internal debates, see, for example, the Chinese Academy of Social Sciences, Institute of World Economics and Politics 

(IWEP) annual report on Chinese outbound investment risk, www.iwep.org.cn/xscg/xscg_zzjyz/201906/t20190605_4913624.shtml. 

Some of IWEP’s earliest annual country risk reports began with arguments about miscalculations of Venezuelan country risk. 

60. China, along with Russia, did support the Norway-sponsored negotiations between Maduro and the interim Guaidó government. See Venezuela Working Group, “The Long Road: Supporting Venezuelans through an Uncertain Future,” Inter-American 

Dialogue, February 2020, www.thedialogue.org/wp-content/uploads/2020/02/The-Long-Road-Supporting-Venezuelansthrough-an-Uncertain-Future-1.pdf. 

61. See Cobus van Staden, “China’s Role in Zimbabwe’s Regime Change Says More about China Than Zimbabwe,” Quartz Africa, 

December 8, 2017, www.qz.com/africa/1150395/chinas-role-in-zimbabwes-regime-change-says-more-about-china-than-zimbabwe. 
2 2 SPECIAL REPORT 484 USIP.ORG

62. See, for example, Yun Sun, “China’s Pains over Zimbabwe’s Indigenization Plan,” Africa in Focus (blog), Brookings Institution, 

April 26, 2016, www.brookings.edu/blog/africa-in-focus/2016/04/26/chinas-pains-over-zimbabwes-indigenization-plan. 

63. Jevans Nyabiage, “How Zimbabwe’s New Parliament Symbolises China’s Chequebook Diplomacy Approach to Africa,” South 

China Morning Post, January 5, 2020, www.scmp.com/news/china/diplomacy/article/3044402/how-zimbabwes-new-parliament

-symbolises-chinas-chequebook. 

64. Such discussions have so far been noteworthy for not including Venezuela. For more, see Deborah Brautigam, “Chinese Debt 

Relief: Fact and Fiction,” Diplomat, April 15, 2020, https://thediplomat.com/2020/04/chinese-debt-relief-fact-and-fiction; and 

Sebastian Horn, Carmen Reinhart, and Christoph Trebesch, “China’s Overseas Lending and the Looming Developing Country 

Debt Crisis,” VoxEU, May 4, 2020, www.voxeu.org/article/china-s-overseas-lending-and-looming-developing-country-debt-crisis. 

65. See Gregg A. Brazinsky, Winning the Third World: Sino-American Rivalry during the Cold War (Chapel Hill: University of North 

Carolina Press, 2017). 
USIP.ORG SPECIAL REPORT 484 23

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• Digital Inclusion in Mediated Peace Processes: How Technology Can Enhance 

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• Curbing Corruption after Conflict: Anticorruption Mobilization in Guatemala by Walter 

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