Until today we had seen the People's Republic of China (PRC) in the role of lender to the Venezuelan regime in exchange for oil. In a recent note “According to the China-Latin America Financing Database of the Inter-American Dialogue and Boston University, Venezuela has received 62 billion dollars in financing from China and the current debt is estimated to be around 15 billion dollars” (see in Spanish El Observador, Venezuela accumulates a gigantic debt, in default and difficult to restructure: risk of embargoes and the key role of China, in https://www.elobservador.com.uy/estados-unidos/america-latina/venezuela-acumula-una-deuda-gigantesca-default-y-dificil-reestructurar-riesgo-embargos-y-el-rol-clave-china-n5977892).
However, China has not kept that debt and has advanced, in spite of the sanctions against Venezuela, in the collection of its debt. Last year the Chinese paid much less than usual for our payment in oil due to the sanctions, having gone as much as USD 20 less compared to Brent (see in Spanish Bloomberg April, 2024, China pays less for Venezuelan oil after sanctions reimposed by the U.S., in https://www.bloomberglinea.com/latinoamerica/venezuela/china-paga-menos-por-el-petroleo-venezolano-tras-las-sanciones-reimpuestas-por-eeuu/).
In spite of this, the advance of the PRC does not stop in our country. The Chinese also have an answer to the disaster that the 26 years of socialist changes in the oil industry of the regimes of Hugo Chávez Frías and Nicolás Maduro Moros have meant. The Secretary of Professionals and Technicians of the United Federation of Oil Workers of Venezuela, Yván Freites, recently denounced that the government of Nicolás Maduro handed over PDVSA to the Chinese company Concord Petroleum, assuring that the company “is in the process of bringing at least 5,000 Chinese citizens to take charge of the repair and operation of the wells, refineries and service stations, all centralized in Caracas. Venezuelan workers will be expelled by this company from their workplaces, that is the fear and anger in the operational areas” (see in Spanish El Nacional, Aseguran que Maduro entregó PDVSA a empresa China Concord Petroleum, in https://www.elnacional.com/venezuela/aseguran-que-maduro-entrego-pdvsa-a-empresa-china-concord-petroleum/).
There is no doubt that over the years and in the midst of the most dreadful economic crisis this country has ever experienced, the Chinese have profited significantly from both the inefficiency and corruption of Venezuela's socialist regime, as well as from the sanctions imposed on it from abroad. But if you think it will stop there, wait until you see what happens next.
The Chinese are completely indifferent to the fact that the regime has stolen the money they lent them for the construction of infrastructure works, because that is not their problem. I would go so far as to say that they are very happy with that. Their problem is that they get it back under the agreed terms, because if not, they will collect it themselves, as, in fact, they are doing in PDVSA. It is very convenient for them that a country with the natural wealth of ours has a regime of the nature of the one we have, because the exchange for little mirrors is even easier.
Step by step, China's penetration in Latin America has become unstoppable, especially if it is a PRC policy not to put any obstacle to do business with the most abject regimes in the world, systematic violators of Human Rights. In fact, China keeps buying Venezuelan crude oil despite Trump's sanctions to impose additional tariffs for doing business with Venezuela. We will end up paying for that in the end. That part of the bill will be deducted from the little we already charge for the oil sent to the PRC. It's just business! (see Petroguia, China keeps buying Venezuelan oil despite Trump's move to impose tariffs, in http://www.petroguia.com/pet/noticias/petr%C3%B3leo/china-mantiene-compra-de-petr%C3%B3leo-venezolano-pese-la-medida-de-trump-de-imponer).
But you know what? I don't blame the Chinese or the PRC's international trade policy. That's the way they conduct business with all countries around the world. It is neither bad nor good. It depends on who it is that negotiates with them, because their way of looking at the world doesn't put judgment on that.
In a recent and very interesting interview with Chas Freeman, former Director of Chinese Affairs at the US State Department and Assistant Secretary of Defense for International Security Affairs, the main US interpreter during President Nixon's historic visit to China in 1972, this protagonist of the West's history with the Asian giant, enlightens us in the context of a new multipolar world order:
“...the U.S. position is losing because the Chinese say “How you develop is up to you.” We have nothing to say about that. If you want to learn from us go ahead. If you prefer to learn from others, we don't mind. And we say “You have to adapt to our way or nothing”. And the other thing is the Chinese are not trying to block the United States from selling goods or services anywhere, but we are trying to block them. As somebody said, I think it was Larry Summers, he heard from an African interlocutor that when the Chinese come they offer roads dams and electrification. And when you come, you insist that we adapt to your political positions and you offer us nothing. So who's going to win? If the United States wants to succeed and remain the great power, the overwhelmingly superior power that we have been, we need not only to reform ourselves internally but also to change our foreign policy to recognize the interests of other countries and try to serve those interests rather than resist them.”… “So I think the Chinese challenge is correctly described by the European Union as systemic. It is a systemic challenge. It's a choice between an open world with many different paths to modernity and a closed world dominated by protectionism. And by the way, I don't think tariffs are going to reindustrialize the United States, but that's one of the many ways in which the strange has become normalized at least in theory in my country” (see Interview with Chas Freeman: The Lies We Tell Ourselves About China, in https://youtu.be/urGPskVS5aE?t=2953) (highlighted our).
In other words, rather than worrying about the Chinese -which in itself is enough of a matter of concern- we should worry about a world increasingly dominated by the other way of understanding it, and seek a position that will give us sufficient autonomy in the face of the fundamental change that is coming upon us in the world order.
If the Chinese are working to put Venezuela's refineries back to work under their terms and conditions, as already denounced by the oil workers, and restart the country's main industry because they have the money and the technology to do so, the financial sanctions of the US or the West on the regime of Nicolás Maduro Moros will matter little. Rest assured that they will do it, they just need time for that.
The flow of oil money will flow into the Digital Yuan, within the PRC's new financial ecosystem, Cross-border Interbank Payment System, CIPS, “designed to challenge the entrenched dominance of the U.S. dollar and the SWIFT system. This ambitious initiative centered on the Digital Yuan, E-CNY, is not a passing experiment, but a calculated strategy to redesign the flow of money across borders, in a systematic silent manner, and with far-reaching implications” (see in Spanish China pulls the plug on SWIFT: $1.2 trillion digital yuan goes global, in https://youtu.be/fGYlEuU0OWc?si=aMnyM-1R1GOUsVJS). This strategy has the clear objective of bypassing the economic sanctions imposed on countries such as Venezuela and making the New Silk Road viable in these countries.
Contrary to what many may think, it is not that China is just now landing with all these initiatives to disengage from politically controlled financial control. No. It has been in gestation for many years and it is only now that they are coming to the fore and actively functioning as the Trump administration unleashes the trade and tariff war against the PRC, awakening the Chinese dragon. Even if the US reaches a tariff agreement with the PRC, the damage is already done. CIPS will be up and running, countering SWIFT as the only existing global payments system. It is a systemic challenge that cannot be avoided by measures that try to circumvent China's penetration in the world.
This situation is so complex that it merits further elaboration, because events inside and outside the country are moving very fast in one direction or the other. But what is very clear is that if the Venezuelan political opposition wants to keep our country within the Western orbit, they had better accelerate whatever they are doing regarding the liberation of Venezuela. Whether the regime stays or goes could depend on that, because if paralysis by analysis continues to prevail, these actions will be meaningless in the face of the real Chinese systemic challenge; and which, of course, we hope will go beyond a media opinion matrix that tries to convince us that the regime has fallen...
Caracas, May 19, 2025
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TIC’s & Derechos Humanos, https://ticsddhh.blogspot.com/
Email: luismanuel.aguana@gmail.com
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