China seeks to protect investments after US attack shocks Venezuela

BEIJING—China is eyeing new opportunities to build global influence in the wake of the U.S. attack on Venezuela, but analysts say Beijing’s immediate priority is protecting its economic interests.

China quickly reacted to Saturday night’s military attack, expressing shock and condemnation. The Chinese government then called on the United States to release deposed Venezuelan President Nicolas Maduro and his wife, and called on the United States to resolve the crisis through dialogue.

Chinese Foreign Ministry Spokesperson Lin Jian told a press conference on Monday that China maintains “positive communication and cooperation” with the Venezuelan government and remains willing to deepen cooperation, including on oil exports, no matter how the situation develops.

He added that China’s interests in Venezuela will be protected under the law.

Jicheng Wang, a researcher at the Center on China and Globalization, a Beijing-based think tank, said the US attack on Venezuela is helping China strengthen its position as a “stability force” in the world.

However, Wang said the situation is causing concern for the Chinese government due to China’s revelations within the country.

“We are also very concerned about how this will play out in the future because China has a lot of commercial interests in China,” he said, adding that the uncertainty could spill over into Chinese business across Latin America and elsewhere.

Beijing has made significant inroads into Latin America over the past two decades, persuading several countries, including Panama, Costa Rica, the Dominican Republic and El Salvador, to shift diplomatic recognition from Taiwan to China.

Chinese companies, most of which are state-owned, have invested $4.8 billion in Venezuela over the past two decades, according to data compiled by U.S.-based research firm Rhodium Group. Most of the deals took place in the decade after the global financial crisis and during the last years of former President Hugo Chávez’s rule, focusing on energy projects.

State oil giant China National Petroleum Corporation has a joint venture with Venezuelan oil company Petroleos de Venezuela. In August, privately held China Concord Resources announced an unusual plan to invest more than $1 billion in a project in Venezuela that aims to produce 60,000 barrels of oil per day by the end of 2026, according to Reuters.

Dong Xiaopeng, a senior researcher at Renmin University of China, said protecting Chinese people and Chinese companies remains the Chinese government’s top priority. China’s Foreign Ministry said on Monday that it had not received any reports that Chinese nationals were harmed by the U.S. attack.

The Chinese government also criticized what it called bullying behavior that violates the sovereignty of other countries, and said it opposes interference in the internal affairs of Latin American countries for any reason.

China will continue to maintain a policy of non-interference and remain a “good friend” of Latin American and Caribbean countries, adding that it will “not draw any ideological lines.”

“China will never seek a sphere of influence or target third parties,” Lin added.

According to S&P Global, China is the largest export destination for Venezuelan crude oil.

However, according to statistics released by the U.S. Energy Information Administration, Venezuela will account for only 2% of China’s crude oil and condensate imports in 2024, with the majority coming from the Middle East.

According to the data, imports from Iran and Iraq increased from 2023 to 2024, while imports from Venezuela decreased.

“China is likely wary of becoming drawn into this conflict, given Venezuela’s limited economic importance to China and little geopolitical proximity,” said Yue Su, chief China economist at the Economist Intelligence Unit.

“Rather than making a definitive choice between sides, China has prioritized protecting its own interests unless partner countries take a clear stance toward Taiwan,” he said.

Analysts added that China’s broader geopolitical posture remains unchanged, including its approach to Taiwan, which China considers part of its territory.

In a major military display, China conducted live-fire training around the island last week, days after the United States announced a record amount of arms deliveries to the island.

Dan Wang, director of Eurasia Group’s China team, told CNBC’s “Squawk Box Asia” on Monday: “This Venezuela thing is a pretty big crisis, but it doesn’t change China’s strategy toward Taiwan. It doesn’t change the expectations of what will happen between China and the United States.”

What could change, she said, is if Beijing changes its mind about the need to establish a legal framework for occupying Taiwan, similar to how the United States justified detaining Maduro on drug trafficking charges.

Against the backdrop of the US attack on Venezuela, China’s high-level diplomacy continued in earnest on Monday.

Chinese President Xi Jinping met with Irish Prime Minister Michael Martin, the first visit by an Irish leader in 14 years, and was scheduled to receive South Korean President Lee Jae-myung later that day.

“China has gone from 6% of global GDP (PPP) to more than 20% in 15 years,” Nassim Nicholas Taleb, author of “Black Swan,” wrote in September. “So let’s think about what geopolitics will look like in 2035.”

“In the future, discussions about war may need to take place in Beijing rather than Washington.”

—CNBC’s Victoria Yeo contributed to this report.