It’s safe to say that China’s actions in Venezuela, as well as the rest of the developing world, point out a very clear policy with specific goals. China’s involvement in the country, although substantial, isn’t unique and Venezuela isn’t the only place where it’s been controversial. Critics claim that China is exercising a “Debtbook Diplomacy”, loaning exorbitant amounts to emerging markets in order to keep them dependent for decades to come.
But isn’t the Debtbook Diplomacy just a new form of predatory, exploitative colonialism? One that comes from a superpower with a well-known history of censorship and human rights abuse?
Last week Reuters reported the deep involvement between the Chinese telecommunications company ZTE in developing the carnet de la patria as a tool for social control of the Venezuelan population. ZTE’s head in Venezuela said that they “don’t support the government” but they simply were “developing [their] market”.
Critics claim that China is exercising a “Debtbook Diplomacy”, loaning exorbitant amounts to emerging markets in order to keep them dependent for decades to come.
However, one doesn’t necessarily exclude the other.
According to official sources, in 1999 trade between Venezuela and China amounted to $500 million. In 2009, it was over $7 billion. Right now, the world’s largest oil importer has heavily invested in their closest ally in the region, lending over $70 billion, for infrastructure, communications, agriculture, industry—particularly on extraction of natural resources—and trade.
All this works through the Chinese-Venezuelan Fund and the Chinese Development Bank via the Social and Economic Development Bank of Venezuela (Bandes) and with assistance of the National Development Fund (Fonden), both of which drew attention early on for their lack of transparency, even for chavista standards. So, you can imagine.
As our Daniel Urdaneta points out, this money mainly ends up bringing in Chinese goods and services, developing projects in Venezuela, and a special allocation to the executive branch. So far, the Chinese embassy said in 2014 that it had financed over 220 projects in Venezuela. By 2018, the Ministry of Economy and Finances reported the number had increased to… 220!
Regardless of the real number and current state of these projects, they include the Simón Bolívar satellite, Gran Misión Vivienda Venezuela, Venezolana de Industria Tecnológica, the Oderbrecht-built Piar power dam, and a nationwide railroad system set to be finished by 2030 that so far has created El Tren de Aragua only.
The corruption has been so large, that even the government had to make some arrests to keep up appearances.
Needless to say, the corruption has been so large, that even the government had to make some arrests to keep up appearances.
These loans are payable in an oil-for-loan scheme that worked well when the oil prices were well above $100 per barrel, but became increasingly difficult to cover as both prices and production took a fall. By January last year, PDVSA was ten months behind, owing 3,2 billion oil barrels to the State-run China State Petroleum Corporation.
Right now it’s reported that 80% of oil production is used to pay off debts with China and Russia.
Yet, the Chinese government continues to support the Bolivarian Revolution, despite continuous failures to fulfill their obligations. Or maybe they don’t see it as a failure, but simply a bet in which they win either way.
Take for example the Belt and Road Initiative, China’s ambitious and far-reaching series of trillion-dollar construction projects connecting terrestrial and maritime routes in 70 countries, mainly Southeast Asia with Africa, the Middle East, Eastern Europe.
Fun fact: it’s been promoted with catchy music videos!
But these large-scale projects are anything but a gift. The gregarious example is Sri Lanka, that ended up granting a 99-year lease on a major port to Chinese-controlled firms after China financed its construction in 2007 and soon became a money pit that required more loans.
In Latin America, between 2006 and 2016 trade with China rose 200%. It has built a highway in Colombia, two nuclear plants in Argentina and a container port in Brazil, where it has invested billions in energy companies. President Bolsonaro said that they “were buying Brazil” only to quickly have his deputy do some damage control.
Meanwhile in Mexico, López Obrador’s incoming Minister of Foreign Affairs already declared that China is one of the “key countries” in the new president’s economic plans. However, the most talked infrastructure project, developing a transoceanic canal through Nicaragua by a Chinese billionaire with deep ties to Zelaya’s government, seems to have stalled since it was proposed a few years back.
One could make the case that China’s involvement with Latin America and the rest of the developing world is hardly special, particularly if you compare it with the outreach of the United States and Western Europe. After all, the U.S. has a more than spotty record on meddling in Latin American countries for their own interests. You can rightfully criticize the U.S. and Europe for a lot of things, but that doesn’t mean any other player gets a free pass.
Not trading with China isn’t an option, not in an interconnected world and particularly not in the Global South. It’s one of the world’s largest economies and the biggest exporter. As much as leaders like Bolsonaro claim they can block their influence, they are trying to cover the sun with a finger.
China will eventually be measured with the same yardstick than the rest of the developed world.
When ZTE claims it’s simply developing their market, it’s saying the truth. After all, as Belt and Road has proven, they have no issue in developing their markets in Belarus, Iran, Turkey, Turkmenistan and Saudi Arabia. Government surveillance is simply another business for them, one that enables abuse from their business partners against their respective populations.
Sadly there isn’t much Venezuelans or the majority of the world population can do about it. Just hope that, as superpowers continue playing their games, China will eventually be measured with the same yardstick than the rest of the developed world.
But it seems easier to simply have everyone else lower their standards instead.
Caracas Chronicles is 100% reader-supported.
We’ve been able to hang on for 19 years in one of the craziest media landscapes in the world. Now, the difficulty level was raised abruptly with the global pandemic. We’ve seen different media outlets in Venezuela (and abroad) cutting personnel to avoid closing shop. This is something we’re looking to avoid at all costs, and it seems we will. But your collaboration goes a long way in helping us weather the storm.Donate