What Directions Might China–Venezuela Relations Take after Maduro’s Downfall?

China and Venezuela have shared close-knit ties for the past 25 years. Venezuela has relied heavily on Chinese investment and loans to finance its economy, being indebted to the latter to the tune of USD 60 billion – the highest such figure as regards China in all of Latin America. For comparison, the second-highest debtor to Beijing, Brazil, owes USD 31 billion. Most of this debt is repaid in oil, which explains why about 70 per cent of Venezuela’s related exports are sent to China. In addition, Beijing has strongly supported Caracas’s digital surveillance system. ZTE, which developed China’s social credit system, helped create Venezuela’s key subsidy management and social-control system, the homeland card “Carnet de la Patria.” At the same time, the country is the largest recipient of Chinese arms in Latin America. Military cooperation intensified in particular after the United States arms embargo of 2006, when Caracas found a reliable partner in Beijing as regards modernising its armed forces.

For almost 20 years now, China’s relationship with Venezuela has spanned far beyond commerce alone. Beijing has served as a crucial political supporter, a vital source of financing during the height of international sanctions, and a partner prepared to challenge Washington’s efforts to isolate Caracas. The arrest of President Nicolás Maduro by US forces early Saturday 3 January 2026, however, has placed unprecedented strain on the strategic alliance between the South American country and its East Asian counterpart. Their bond is strongest in the economic realm, despite China having long been frustrated with its partner’s slow repayment of what it owes. Venezuela, both as a government and a country, is a major client for Chinese goods, as seen when Caracas’s public transportation system was completely renewed with Yutong buses and subway trains in the mid-2010s. Understandably, after the events of 3 January, China is concerned that its deals with Caracas might literally be “Trumped.”

Washington’s Strategic Ambition: Displace Beijing in Caracas

The White House has made clear that it wants to control Venezuela’s oil resources. Just a few days ago, it demanded that Caracas provide 30–50 million barrels of oil to be sold by the North American country, with the proceeds managed by Washington to purchase US-made goods for Venezuela – such as agricultural products, medicines, and electrical equipment. Trump wants Venezuela’s economy to be fully dependent on the US, displacing any rivals and especially Beijing. This is certain to create friction with China. Nevertheless, the US will likely allow the latter to continue buying oil from Venezuela, although it is unclear how those barrels already “purchased” through debt deals will be handled.

So far, two things seem certain. First, China has lost a diplomatic ally in Latin America. US Secretary of State Marco Rubio made clear on Sunday that one of the administration’s first demands was to “cut ties” with US rivals such as Tehran, Moscow, Havana, and, of course, Beijing. Venezuela will be forced to moderate its erstwhile anti-imperialist rhetoric and distance itself from them. On that front, China’s has little to no room for manoeuvre. Traditional instruments of power are largely unavailable: sanctions would be ineffective, military deterrence in the Western Hemisphere lacks credibility (and would be unlikely), and financial leverage loses impact amid Venezuela’s political instability. As a result, Beijing is essentially confined to providing symbolic support. Crucially, China is unlikely to be willing to risk open confrontation with the US on behalf of an increasingly unstable partner. From Beijing’s perspective, potential economic losses in Venezuela might be manageable, but an escalation with Washington in the US’s own backyard certainly is not. This is precisely what lies at the heart of the reality check now taking place: economic influence does not substitute for security and coercive power.

Second, China’s importance to the Venezuelan economy is bound to shrink under US pressure. At a minimum, the North American country will force Venezuelan government tenders to prioritise its suppliers. US involvement in Venezuelan industries will grow accordingly, taking market share from China.

China’s Shrinking Influence under US Pressure

Not everything is as gloomy as it seems, however. The situation in Venezuela and mounting criticism from the wider region provide China with an excellent opportunity to gain ground in a narrative sense, therewith portraying itself as the more responsible partner to Venezuela’s neighbours, playing its favoured “non-interference” card once more, and emphasising that in contrast to the US it seeks to uphold the rules-based international order. This will not enable Beijing to recover its lost ally, but it will help it make inroads in its broader competition with the US for hegemony and diplomatic standing.

Also, China can maintain access to Venezuelan oil while leaving it to the Trump administration to deal with the political situation now at hand. For now, Venezuela’s future is uncertain – not only is the country’s economy heavily dependent on oil production, it is also unclear who will take responsibility for governance when the US eventually retreats. Trump’s military advance provides the perfect opportunity for China to leave this political mess to the US administration while continuing to profit from Venezuela’s oil reserves, even if further investments therein are unlikely to be allowed by Washington. Should things take a turn for the worse, China can blame any negative outcomes on Washington and continue to do what it does best: foster bilateral economic relations with partner countries while abstaining from any involvement in their political affairs.

A first version of the commentary by Dr. Julia Gurol-Haller in German can be found here.