The US military operation against the Venezuelan President Nicolás Maduro has exacerbated the already strained US relationship with Latin America, with far-reaching implications beyond the region. The episode unfolded in the context of China’s increasing involvement in Venezuela, underscoring the extent to which Latin America’s resource diplomacy has been caught up in the great power competition.
China’s stance towards this crisis has been illustrative of its typical foreign policy ‘duality,’ featuring a strong rhetorical stance towards US unilateral intervention with cautious non-actions. This measured stance enables China to establish itself as a defender of sovereignty and the international norms, as well as keep minimal risks in the game of influence in a region where US influence is structurally embedded.
This diplomatic caution is also a reflection of a broader aspect of Chinese approach towards critical technologies. Even with Beijing controlling the lion’s share of the global processing power, especially in rare earths, which are indispensable to AI, emerging technologies, and energy generation, this dominance has not translated into ownership. The case of Venezuela has highlighted a persistent structural weakness: that access to resources and markets is a politically contingent issue and even Chinese technological ambitions remain open to external shocks that are beyond its immediate control.
Its implications are not limited to diplomacy. Mineral-intensive and globally distributed supply chains are the key to China’s tech ambitions, especially in its aspirations of global leadership and equitable access of AI for all, along with renewable and clean energy for sustainable global development. Since the rare earths and other critical minerals are dispersed throughout different regions, they make China’s industrial upgradation dependent on a continuous stream of inputs, and even a limited disruption, delay, or regulatory uncertainty can reverberate throughout the production cycles.
This sensitivity is indicative of a characteristic attribute of the AI-driven industries that dependence does not solely rely on the volume, but also on timing and predictability. Unlike traditional manufacturing sectors, advanced tech sectors are especially exposed to blockages that slow deployment, raise costs, or complicate long-term planning. Venezuela illustrates how quickly political shifts can introduce friction into supply chains that were previously treated as commercially reliable.
For China, even with processing nearly 70 percent of the global rare earth, processing capacity does not equate to supply security. It still relies on foreign sources for raw materials, leaving its technological sector heavily exposed to geopolitical forces beyond its control. By centralizing processing capacity domestically, Beijing has turned its vulnerability into a strategic asset, and incorporated it as part of its robust industrial policy. However, this strategic advantage has only created a rather incomplete sense of security. Although the dominance in processing offers China some leverage, it does not insulate it from the upstream shocks where supply is politically conditional and geographically dispersed.
In this regard, the dominance in processing only shifts the risk instead of eliminating it. The demand for the rare earths and other similar minerals will only increase as AI-driven industry grows, as data centers and high-performance computing, etc., all demand continuous and predictable access to mineral inputs. China’s swift ventures into electric vehicles and renewable energy further deepen this dependence. Any disruption, from geopolitical pressure, regulatory changes, or logistical constraints, can slow innovation, increase production expenses, or accelerate Beijing’s search for domestic alternatives through mining, recycling, or technological replacement. China’s technological trajectory, to be exact, is inseparable from the resilience of the supply chains that sustain it.
Power in critical mineral supply chains does not only operate via control of space but also time. Logistical friction and regulatory delays could be as consequential as actual denial of access. Based on scale and speed, AI-driven industries are especially susceptible to marginal slowdowns, making predictability itself a strategic resource. At the heart of this equation is Latin America. Chile, Brazil, and Venezuela are in crucial positions in the world to supply computing, electric vehicles, and renewable energy due to their deposits of rare earths, among other strategic minerals, including lithium. For China, engagement with Latin America is increasingly strategic. Yet interaction with China is not simply a matter of alignment for Latin America. For resource-rich countries, it functions as a bargaining mechanism, a method of diversifying alliances and gaining leeway. This agency introduces fluidity to supply chains where access is negotiated as opposed to being guaranteed.
Dependence on external resources also carries a political risk. Access is not just determined by the conditions of the markets but also by the stability of the supplier state and the strategic environment in which they operate. History provides repeated lessons, from colonial trade monopolies to industrial-era resource rivalries and the oil shocks of the 1970s, demonstrating how the possession of crucial goods and routes reshapes power. The same rationale applies to the competition of access to rare earths today: technological dominance is becoming more and more dependent on access to material resources as well as channels through which such resources flow.
And today, it is not merely through official blockades that power can be exercised. Even with regulatory reach, diplomatic engagement, and a sustained security presence, critical mineral trade can be impacted. Even modest policy changes or signalling may make long-term industrial planning difficult, especially for sectors that depend on just-in-time global logistics.
US actions in Venezuela illustrate how readily access to resources can become politicized. For Chinese firms, this creates difficult choices: remain in politically sensitive environments, diversify suppliers, or accelerate investment in domestic alternatives. Any of these paths carries costs, not only in capital but also in the pace of innovation that is fundamental to China’s economic and energy transitions. As competition intensifies across AI and clean energy, etc., geopolitics is proving as consequential as engineering. China’s dominance in rare-earth processing provides leverage, but reliance on external mineral supplies introduces strategic vulnerabilities. In such an environment, the resilience of supply chains and the politics that shape them may prove as decisive as technological capability itself.