Chinese diplomats in Caracas are working day and night to help Beijing determine how best to deal with Juan Guaido, the self-declared leader of Venezuela who may not favour continuing the oil-for-loans deals that have underpinned China’s relations with the South American country for years. China’s envoys in the Venezuelan capital frequently hold late-night conference calls with officials back in Beijing as they try to set a strategy for getting along with Guaido, who declared himself Venezuela’s acting president in January after incumbent President Nicolas Maduro won an election marked by low turnout and allegations of irregularities. “At the top of everyone’s mind [at the Chinese embassy and in Beijing] was the degree to which goodwill should be shown to and accepted from Guaido,” a person who had been briefed about one such conference call – and was not authorised to talk to the media – told the South China Morning Post on condition of anonymity. Although the US and dozens of other Western and Latin American countries had endorsed Guaido as president – adding a power struggle to the woes of hyperinflation and US sanctions on its state oil company that have hit the country – Beijing had made it clear that switching support publicly from the embattled Maduro to Guaido would be out of the question. Guaido calls for nationwide protests to allow US aid to enter But with the future of China’s oil projects in Venezuela and nearly US$20 billion that Caracas owes Beijing suddenly uncertain, China’s diplomats remained eager to find out more about the 35-year-old opposition leader. That task marked a change of pace for Beijing. For years, dating back to the era of former president Hugo Chavez, the Chinese embassy had strived to remain in close contact with Venezuelan government representatives and lawmakers affiliated with the United Socialist Party of Venezuela, which Chavez – who embraced China as a political ally – had led until 2012. Chavez saw China as an important partner in his bid to manipulate Venezuela’s petroleum supplies to implement his radical domestic and foreign policy platforms. Huge loans for oil deals provided a source of funds that few if any creditors could match, while expanded oil exports to China fit with Chavez’s hyperbole about the need for Venezuela – home to the world’s largest proven oil reserves – to diversify away from American export dependence. Maduro: US envoy met secretly with Venezuela foreign minister By contrast, China’s connection with the opposition forces in Venezuela’s National Assembly was minimal, since Beijing tended to view Chavez’s critics with suspicion. In that vein, China’s foreign ministry flatly dismissed as “fake news” reports that Chinese diplomats had held talks with the political opposition in Venezuela in an attempt to protect its investments in the country. While no formal meeting actually took place, it was clear that China was keen to uncover details about Guaido, who became leader of the opposition in the Venezuelan legislature last year, and was sworn in as president of the National Assembly, equivalent to a speaker's position, just one week before Maduro was sworn in again as president. In fact, getting to know Guaido had been atop the Chinese government’s agenda in Venezuela as the self-declared president’s national and international political fortunes steadily rose – and fit with Beijing’s proactive moves aimed at preparing it for a possible leadership change in the country. No talks between China and Venezuela opposition, instead it’s ‘fake news’ “China has sought informal dialogue with the Venezuelan opposition in recent years to ensure productive relations in the event of a transition,” said Margaret Myers, director of the Asia and Latin America programme at the Washington-based Inter-American Dialogue think tank. Guaido now seeks to assure Beijing and Moscow – the two main international players that remain committed to Maduro out of geopolitical and economic considerations – that his leadership would not harm those nations’ interests in Venezuela. He has been reaching out to media outlets for coverage that would presumably aid his cause. The Post this month published Guaido’s first interview with Asian media , in which he expressed interest in developing a “productive and mutually beneficial” relationship with China and said he was ready to engage Chinese officials in dialogue “as soon as possible”. But on the core question facing the Chinese government – whether Venezuela would continue sending shipments of crude oil and fuel to China, ensuring the protection of Chinese interests in the country under a Guaido administration – the opposition leader was less than firm. Venezuela protests demand China-backed Maduro let US aid in Beijing’s deals with Maduro’s government, he told the Post , would be honoured so long as they were concluded through “due process”. “All agreements that have been signed with China following the law will be respected,” Guaido said. “If previous agreements were signed by adhering to the due process of approval by the National Assembly, my government will accept and honour them.” Inter-American Dialogue’s Myers said Guaido was making a “clear appeal to Chinese pragmatism” by indicating that his government “would be far more capable of repaying outstanding debts than Maduro’s”. However, she predicted Venezuela would continue to figure prominently in Beijing’s energy security calculus, no matter how Maduro’s leadership bid turned out. “China has continued to finance Venezuela to ensure moderate levels of productivity in the oil sector,” she said. “Chinese disbursements could be used to ensure support from Maduro’s base, but they aren’t aimed at propping up the Maduro government. Doctors demand humanitarian aid be allowed into Venezuela “China is likely to engage respectfully with a new government in order to achieve best outcomes on debt restructuring,” she said. Matt Ferchen, a Latin American academic at the Carnegie-Tsinghua Centre for Global Policy, said Guaido’s effort to wrest Chinese support away from Maduro and reposition it behind his claim to leadership was “shaping up as a mixture of carrots and sticks”. The carrot, he said, was reassuring China it would continue to have a place in Venezuela’s energy economy under an opposition-led government. The stick was the not-so-subtle warning that Guaido and a future opposition government would review all deals Beijing had made with Chavez and Maduro, including Chinese loans-for-oil arrangements. “If they find these deals were not legally and legitimately approved by the national assembly, and arguably all the deals could be found to fit this category, then a Guaido-led government would have reason to restructure or completely repudiate those deals,” Ferchen said. “This leaves a lot of negotiating room for both sides.” China calls for peaceful dialogue on Venezuela crisis China has invested over US$50 billion in Venezuela through oil-for-loan agreements over the past decade, securing energy supplies for its economy while bolstering an anti-US ally in Latin America. But China created the conditions for a big headache in 2016, when it eased the payment terms for the cash-strapped Opec member on nearly US$20 billion in oil-for-loan deals, under which Venezuela had sent shipments of crude oil and fuel to pay off debt, having to make interest-only payments. The move helped Maduro’s socialist government weather a collapse in Venezuela’s economy, which slid into hyperinflation and a painful recession on the heels of a downturn in oil prices. Amid the price drop, annual oil output at state oil company Petroleos de Venezuela SA (PDVSA), which already was suffering from deteriorating infrastructure and a cash flow problem, plunged 33 per cent to 1.51 million barrels a day as of March 2018, according to official data reported to the oil-producers’ cartel. Now China is seeking a remedy for its worries in its possible relationship with a new Venezuelan leader. From oil to infrastructure, how Venezuela turmoil could impact China It is unsurprising that the Guaido team so far has failed to assure Beijing it would automatically favour China in any future negotiations, given that China has refrained from endorsing Guaido’s claim to leadership. Benjamin Creutzfeldt, a resident fellow at the Woodrow Wilson Centre in Washington and an expert on China-Latin America relations, said “Beijing may only be persuaded to change its allegiance to the interim president if there were direct contact, ideally an envoy directly accessing the Beijing leadership”. Creutzfeldt said the Venezuelan political situation and its relevance to China bear a similarity to Zimbabwean General Constantino Chiwenga’s visit to Beijing during the African country’s regime change in 2017 – a time when rumours of an impending coup were rife. Chiwenga later became the African country’s vice-president, after Emmerson Mnangagwa ousted Robert Mugabe as president. “This rumour [about an impending coup] was alarming to some Western observers, but in the case of Venezuela, it would be impossible for Washington to criticise it,” Creutzfeldt said. Venezuela military blocks humanitarian aid from crossing border bridge What sets Zimbabwe apart from Venezuela, however, is economic reality. Beijing has had close economic ties with Zimbabwe at an official level, remaining its largest foreign investor after years of Western sanctions. By contrast, China’s and even Russia’s economic contributions to Venezuela are eclipsed by one nation: the US; or at least they had been before US President Donald Trump imposed sanctions against oil company PDVSA, seeking to cripple the Maduro government by cutting off its main source of cash. “The repeated mention of China’s and Russia’s loans to Venezuela ignores the fact that the US has long been the largest trading partner of Venezuela, importing between US$15 million and US$25 billion worth of oil annually,” Creutzfeldt said. “Washington’s lifeline to Caracas has been far more substantial than Beijing’s or Moscow’s. The role Beijing and Moscow play in actually sustaining Maduro is vastly exaggerated,” he said. Ferchen, the Latin America-China expert, said at this point, Chinese and Russian diplomatic and symbolic support for Maduro “is as important or more important [to Guaido] than any near-term financial support they might provide”. Major European nations recognise Guaido as Venezuela’s president Ultimately, China cares more about ensuring it will continue to enjoy valued economic status in Venezuela than about the continuity of the Maduro government, analysts have said. To that end, “China will avoid aligning itself with either side,” and will continue to do so until a clearer outcome emerges in the Maduro-Guaido power struggle, Myers said. And for Chinese officials in Caracas, that may mean many more late nights.