Maduro’s capture has a China fallout: A blow to its influence in the region, and a signal on Taiwan

The biggest impact of American interventionism, though, is likely to be felt some 14,000 km away — in Beijing.

The Venezuela-China relationship

The extraction of Venezuelan President Nicolas Maduro poses a potential fallout for China, a close ally of Caracas and the main importer of Venezuelan crude.

Since the Hugo Chavez era, China has cultivated the dispensations in Caracas to emerge as Venezuela’s most dependable partner. Beijing has staunchly backed the Nicolas Maduro administration, and this relationship has helped China expand its influence and presence in a region that is in close proximity to the US and has been traditionally considered within its sphere of influence.

An economic partnership that started with oil has now diversified to cover Venezuela’s gold, rare earths and other mineral assets, but has also progressively morphed into a political alliance of sorts.

China’s carefully cultivated ties to Venezuela could now be in jeopardy after the late-night raid in Caracas on Saturday (January 3). Given that Trump has earlier gone after China’s growing influence in Panama over the control of the vital canal that divides the two Americas, there is a pattern to this trend.

Chinese investments in Venezuela

China’s response to the Maduro episode does reflect some of its anger, and Beijing has talked about US hegemony and expressed outrage against America’s action. Beyond that, however, it’s been guarded in its response so far, even though the US audaciously kidnapped a sitting president of a sovereign country from his bedroom and flew him to face trial in Manhattan. That man happened to be one of the staunchest China allies in that region, and a man whom Beijing has invested in substantially.

There are already reports of Chinese companies operating in Latin America bracing for greater uncertainty, as Washington moves to reassert its dominance in the western hemisphere, according to analysts quoted by the South China Morning Post.

Chinese academics see a Trump-style Monroe Doctrine aimed squarely at countering China’s growing influence in the Americas. The 1823 principle, named after then US President James Monroe, asserted its dominance in the Western Hemisphere and warned European powers against attempting colonisation in the Americas.

In the last decade or so, China’s footprint in both Central and South America has grown markedly, with a string of investments in areas such as strategic minerals, energy and port infrastructure.

China is Venezuela’s largest external economic partner, with trade dominated by the oil that China imports against machinery, electronics, and consumer goods that it exports to Venezuela, often through “loans-for-oil” deals. Data from Trading Economics show that China exported $4.8 billion to Venezuela in 2024, with oil comprising a huge chunk of Venezuelan exports to China.

The oil supply from Venezuela to China is indirect, given the longstanding sanctions on Venezuela, and so is difficult to quantify. Most of the shipments going from Venezuela are on tankers under flags of third countries such as Malaysia, Panama or Liberia, primarily to get around the sanctions.

Now that Maduro is gone, managing these shipments would be a problem. Also, trade experts estimate that Venezuela owes China well over $19 billion for goods that come in from China under oil-for-cash deals, and Beijing would want its money back. That, again, looks difficult now. Bloomberg reported that China has asked its major lenders to report their exposure to Venezuela after the capture of Maduro.

The Taiwan question

The bigger question, though, is whether the American action in Venezuela potentially emboldens Beijing to take over Taiwan.

On the surface, this would seem more plausible now, given that China can justify any such action by citing what the US did in Venezuela. So can Russia, in Ukraine.

But some experts have said that the American action could actually have the opposite effect. The night strike showed that the US is prepared to act unilaterally in situations where it feels that its interests are being compromised. Suddenly, with the Venezuela excursion, the Americans have showcased their military power to the fullest.

While there may be disagreements with the manner in which Maduro was kidnapped, there is little doubt that the entire exercise was a tactical success from an American standpoint and showcased US military and strategic might, which could effectively deter China and others from undertaking any misadventure, at least for now.

The other problem for Beijing is that, as it did in Venezuela, it has been expanding its sphere of influence to Africa and the Americas over the last couple of decades. The US action in Venezuela sends out a signal that if the Americans decide to limit this influence, they are fully capable of doing so.

Now, that could be a concern for countries that have aligned with China in recent years, especially as the trade war and tussle for control over strategic assets are getting more evident between the world’s two biggest economies. The entire framework of Chinese overseas lending under its Belt-and-Road initiative also comes under a cloud after the Venezuela episode.