China is closely assessing the potential fallout of the United States’ dramatic action against Venezuelan President Nicolas Maduro, amid growing concerns that political instability could jeopardise Beijing’s extensive economic and strategic interests in the South American nation. According to a recent report, Venezuela is China’s largest debtor in Latin America and its most significant oil supplier in the region, accounting for more than 80 per cent of the country’s crude exports.

Beijing’s unease stems from the scale of its financial exposure in Venezuela, where China has invested heavily in energy, mining, and infrastructure over the past two decades. As Venezuela’s largest creditor, China holds nearly $12 billion in outstanding debt under oil-for-loans arrangements facilitated primarily by the China Development Bank. Forbes has described this exposure as Beijing’s largest single-country commodity-backed position, forming a substantial portion of the $60 billion China has extended globally through such mechanisms since 2007.

Shortly before his capture by US forces, Maduro met China’s Special Representative for Latin American Affairs, Qiu Xiaoqi, at Caracas’ Miraflores Presidential Palace. During the meeting, Maduro hailed ties with Beijing as a “perfect union,” reflecting the deep political and economic alignment between the two governments. The meeting underscored the strategic importance China places on Venezuela, even as Washington intensified pressure on the Maduro administration.

China and Venezuela elevated their relationship to an “all-weather strategic partnership” in 2023 following Maduro’s visit to Beijing, where he met President Xi Jinping. Venezuela remains the only Latin American country to receive this designation, a status intended to signal exceptional political trust, long-term cooperation, and mutual backing on international issues.

Analysts believe that Beijing’s primary concern is the protection of its investments rather than ideological alignment. Professor Jiang Shixue of Shanghai University was quoted as saying that China fears its economic interests could be adversely affected by the political uncertainty triggered by US action. He noted that instability could disrupt energy supplies, delay infrastructure projects, and complicate debt repayments tied to oil exports.

China has invested extensively in Venezuela through President Xi’s Belt and Road Initiative, with projects spanning mining, transportation, energy, and telecommunications. Bilateral trade between the two countries surged in 2024, reaching $6.4 billion—a year-on-year increase of over 50 per cent—highlighting the depth of economic engagement despite Venezuela’s prolonged crisis.

In May last year, China Concord Resources Corp signed a rare 20-year agreement to develop two Venezuelan oilfields, committing an estimated $1 billion to the project. The deal was widely seen as a signal of Beijing’s long-term confidence in Venezuela’s energy potential, even as Western companies remained cautious.

Following Maduro’s detention, China’s Foreign Ministry expressed “serious concern,” accusing the United States of violating international law and basic norms governing state relations. Beijing called on Washington to ensure the safety of Maduro and his wife, secure their immediate release, and halt efforts to undermine Venezuela’s political order.

China urged the US to resolve the crisis through dialogue and negotiation, warning that unilateral actions could further destabilise the region. The episode underscores the growing strategic friction between Washington and Beijing in Latin America, where Venezuela has emerged as a critical arena for competition over energy, influence, and geopolitical alignment.