China considers Venezuela a key partner in Latin America. China is the biggest importer of oil and Venezuela has the largest amount of proven oil reserves. In fact, China Development Bank (CDB) has issued maximum loans to Venezuela. Despite these compatibilities, the China-Venezuela relationship has become a textbook case of how China blatantly misused its foreign policy of “promoting development”.
China gave financial and economic support to Maduro and Chavez governments that led to instability and misrule in the region. China’s ZTE provided surveillance equipment to Maduro government to help curb dissent. China took advantage of the inefficiency and corruption in the Venezuelan government to exploit is petroleum resources. The strategy was a Loan for oil scheme – a tactic often used by China to gain access to natural resources. Currently, China Development Bank has given loans worth more than 60 billion US dollars to Venezuela.
Unfortunately, neither China nor Venezuela anticipated the dramatic fall of oil prices. Add to this the political instability has left Venezuela burdened under the weight of Chinese debt. It is unable to pay back loans and had to renegotiate terms of loans with China. These reversals in fortune of people hoping to gain economic success with Chinese money led to dissatisfaction among ordinary Venezuelans, as they saw Chinese entrepreneurs and investors as opportunists.
Multiple projects started by China in Venezuela, were abandoned mid way leading to huge economic costs to the country. Even today, Venezuelans don’t trust Chinese investment on their soil. China’s involvement singlehandedly turned the region into the worst political, humanitarian and economic crisis in decades.
Additionally, China had made huge promises to Venezuela. Unfortunately, when the country was in crisis mode, China completely abandoned them and watched from the sidelines. China took out multiple statements showing it’s support for Venezuela but did nothing to change the ground reality. This abandonment has also alerted other developing countries that have relations with China – Myanmar, Malaysia, Thailand etc to the threat posed by Chinese investments.
Clearly China cannot be trusted at all. The US is hard at work trying to undo the damage done to Venezuela by China. Unfortunately, rather than learning its lesson, China is interpreting US aims to restore peace and stability in Venezuela as some kind of competition. Both of them support different regimes in Venezuela. Hence Venezuela has become one of the most conflicted sites of US – China rivalry. But this presents a classic case how China comes as a friend and then extracts its pound of flesh by hook or by crook.