Venezuela: China Involvement

In Venezuela, the United States is often blamed for all the ill that happens in that country. This has happened for years from Hugo Chavez to Nicolas Maduro.

At what point will Venezuela start blaming China? This article at the Center for Strategic & International Studies looks at the growing influence of China in Venezuela. Here are some interesting facts from the article:

First: China currently owns $23 billion worth of Venezuela's foreign debt, making it the country's biggest creditor. Not the US, China.

Second: China has lent the Venezuelan energy industry $55 billion.



There is some insidious dependency here:

China needs oil from Venezuela. Venezuela's Nicolas Maduro needs to stay in power. China is Venezuela's largest arms dealer. Per the article: Venezuela ranks 21st in the world -- and first in Latin America -- of the countries that spend the most on military goods. These military goods are used to help keep Maduro in power.

Though the article points out China's growing influence in Venezuela, I did point out here and here that Venezeula's oil industry is in decline. So any lending that China has provided Venezuela hasn't prevented the decline in oil production.

It would appear that China's money is just going down the drain. The question is how will China react. They could potentially make more demands on Venezuela's oil industry. Or they could pull back lending. At some point, they could attempt regime change. There are probably more scenarios in terms of how China can react to their investments not providing any real returns.

And at what point, does Venezuela turn their blame game towards China? If China demands more and more oil to pay back these loans, less and less money comes into the country via oil exports. Sure, Venezuela got loans so the cash came in, but it doesn't exactly look like those loans were put to good use. Does the Venezuelan government at some point simply refuse to "sell" their oil to China? And if there is ever a regime change in Venezuela, will the new government honor agreements they might see as egregious?

Also, here's some random speculation. In the Middle East, you might be dealing with a civil war by this point due to all the corruption. Yes, there are protests that occur in Venezuela, but I haven't read much about a civil war (other than perhaps that guy who dropped some hand grenades out of a helicopter). Instead of a civil war, Venezuelans might just be "revolting" via immigrating out of the country (as can be read via this blog post).