Venezuela once stood as a flagship for China's expansive ambitions in Latin America, a showcase of Beijing's ability to challenge US dominance through massive loans and infrastructure deals.

Under Hugo Chávez and later Nicolás Maduro, the country secured over $60 billion in oil-backed financing from 2007 to 2015, funding railways, power plants, and housing projects that symbolised Sino-Venezuelan solidarity.

This partnership elevated Venezuela to an "all-weather comprehensive strategic partnership" in 2023, with China positioning it as a key ally in the Global South against Western sanctions.

The alliance began promisingly, with China becoming Venezuela's largest creditor and oil buyer, absorbing up to 80% of its exports in recent years despite the crude representing just 4% of Beijing's imports. Venezuelan heavy oil flowed to Chinese refineries in exchange for cash infusions, propping up the regime amid hyperinflation and economic collapse. Beijing touted these ties as proof of its non-interference model, contrasting it with US "hegemony," while Maduro praised China as an "older brother."

Yet cracks emerged early. Venezuela's oil production plummeted from mismanagement, sanctions, and corruption under PDVSA, the state oil firm, forcing Caracas to ship excess crude to meet loan repayments as prices crashed post-2014. Chinese firms faced payment delays, project overruns, and Venezuelan bureaucratic chaos, with many initiatives—like refineries—failing due to Caracas's inability to contribute capital. By 2016, Beijing halted new loans, slashing exposure as Venezuela defaulted on obligations and its economy contracted sharply.

China's investments yielded limited long-term benefits, often criticised as opaque and propping up an authoritarian regime rather than fostering sustainable growth. Infrastructure projects stalled, Chinese workers imported en masse, and loans became a lifeline for Maduro's narco-state amid US sanctions, but without transparency or market orientation. Analysts noted Beijing's frustration with frequent administrative turnovers and oversight lapses in Venezuela.

The showcase unravelled further under escalating US pressure. From 2025, President Donald Trump's administration imposed a maritime blockade, seizing tankers and striking ports linked to drug cartels like Tren de Aragua, which Washington tied to Maduro. Oil revenues dwindled, exacerbating Venezuela's $60 billion bond defaults and billions owed to China and Russia. China recalibrated, prioritising rhetoric over action, as seen in Foreign Minister Wang Yi's calls against "intimidation" without material aid.​

The final blow came on 3 January 2026 with Operation Absolute Resolve. US forces, using over 150 aircraft including F-35s and Delta Force, bombed military sites in Caracas and captured Maduro and his wife Cilia Flores, flying them to New York for narcoterrorism trials. Explosions targeted La Carlota airbase and Fort Tiuna, killing over 80 including Cuban personnel, amid a US claim of reclaiming "stolen" oil assets.

China condemned the strikes as a "serious transgression" of sovereignty, demanding Maduro's release and dialogue, echoing its non-intervention stance. Beijing urged legal protection for its interests, including $10-19 billion in remaining loans, but offered no military or financial escalation. Analysts like Inés Arco highlight China's pattern: rhetorical support without security commitments, as with Iran.

Vice President Delcy Rodríguez assumed acting presidency, vowing resistance while hinting at US cooperation on oil. Trump invoked a "Donroe Doctrine," promising US firms would rebuild PDVSA infrastructure using Venezuela's 300 billion barrels of reserves to reimburse costs. This directly threatens China's foothold, with Washington eyeing rare earths and gold too.

Beijing now faces a dilemma. Its Latin American policy emphasises multipolarity, but Venezuela's diminished role—eclipsed by Brazil and Mexico—limits leverage. Outstanding oil-collateralised debts risk default under US control, prompting Chinese banks to assess exposures. Xi Jinping's recent overtures rang hollow as Maduro fell hours later.

The collapse exposes China's overreach. What began as a counter to US influence has become a costly cautionary tale of opaque lending and regime dependency. Beijing's pragmatic retreat—cutting finance post-2016—preserved capital but undermined its showcase narrative. With Trump signalling hemispheric dominance, China's Latin ambitions face renewed scrutiny.

Venezuela's crisis ripples regionally, with neighbours like Colombia mobilising borders amid refugee fears. Protests erupted globally, from Caracas celebrations by exiles to US anti-war rallies. Oil prices dipped, underscoring the stakes for importers like China.

Ultimately, Maduro's downfall reveals the fragility of China's Latin American vanguard. Rhetorical solidarity endures, but without economic viability or security backing, the partnership crumbles under geopolitical reality. Beijing must now safeguard assets amid US resurgence, marking the end of Venezuela as its hemispheric triumph.

IDN (With Agency Inputs)