Opinion | How China’s aid to Venezuela has gone from a win-win to a lose-lose

Cary Huang says the massive investment in the corrupt Maduro regime has been a mistake. China has failed to save Venezuela from economic collapse, and serious questions are being asked about Beijing’s sensitivity in managing geopolitical risks

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Venezuelan President Nicolas Maduro, second from right, shakes hands with Chinese President Xi Jinping during a signing ceremony in Caracas on July 21, 2014. Photo: AFP

Published: 11:02am, 1 Feb 2019Updated: 6:33am, 2 Feb 2019

China’s massive investment in the developing world is billed as a win-win model for South-South cooperation. But its excursion into bankrupt Venezuela has proved to be a complete failure, economically, politically and diplomatically.

Venezuela does represent business opportunities for China, for the Latin American nation needs investment in infrastructure and China has money and technology. Venezuela also has what China wants: oil.

China, the world’s second-largest economy, has long sought to diversify its suppliers and markets. Venezuela, which has some of the largest energy and mineral reserves in the world, provides options.

But China’s massive investment in the country might be fuelled by more than just commerce – there is also Beijing’s geopolitical agenda to consider.

In 2001, Venezuela became the first Hispanic nation to enter into a “strategic development partnership” with China, a relationship that has grown into a “comprehensive strategic partnership” since 2014.

Beijing has viewed the anti-US President Nicolas Maduro and his predecessor Hugo Chavez as important political allies in its increasing rivalry with Washington. To China, Venezuela’s geostrategic position may also make it a springboard for expansion of Chinese influence in the US’ backyard.