August 8, representatives of 17 countries of Latin America met in Peru after a meeting held in Venezuela, the elections to the Constitutional Assembly. Most of them condemned the collapse of a democratic order and has taken a number of steps against the government of Maduro. Thus, the unanimous resistance only increased the isolation of Venezuela within Latin America.
The inevitable impact of China and Russia
However, Maduro does not retreat. He firmly adheres to the institutionalization of the dictatorship. Russia and China have in his government a very tangible support. What is the role of China and Russia in the Venezuelan crisis? What are their geostrategic goals?
In his official report of China said that the elections to the Constitutional Assembly were held on legal grounds, and urged other countries to refrain from interfering in the internal Affairs of Venezuela. It is noteworthy that China several times mentions the importance of stability in the country, which causes major concerns of China.
The issue of oil and money
In 2014 China allocated to Venezuela almost $ 30 billion. The terms of the transaction was not entirely transparent and the national Assembly has not approved them. Debt repayment should be at the expense of oil supplies. This is a very risky idea, because after the collapse of oil prices in 2016, the debt service costs rose sharply.
At the same time, oil production drops sharply. Since the election of Chavez its production fell to one million barrels per day. The volume of oil supplied by Venezuela to China fell to 4.5 billion barrels in 2016, compared to 12.5 billion. 2013. The country is no longer able to supply China with oil in sufficient volume to meet its debt obligations. In Venezuela is still raging, and the crisis China now faces a difficult dilemma.
China’s financial diplomacy and the planetary influence
The expansion of China in the world based on its financial policy of large loans that it provides to countries of strategic interest. Human rights, environmental protection, corruption, China does not really care. It provides loans without any conditions. China did not care about the real solvency of the countries that receive it. In fact, China is obsessed with the extension of its market, ensuring access to raw materials and political influence to support their geo-strategic interests in the world.
Latin America China is a strategic priority. Chinese development banks have allocated to Latin America $ 30 billion in 2015, more than the world Bank and the inter-American development Bank combined. In 2015, China was visited by the presidents of all Latin American countries, and XI Jinping has promised to invest in the region 250миллиардов dollars over 10 years. Brazil is a strategic partner of China in the BRICS, which includes China and Russia. Chile, Peru, Bolivia and Venezuela became members of the Asian infrastructure investment Bank led by China. The growing integration between China and Latin America leads to a reduction of the historical US dominance in the region. The Monroe doctrine gradually sent to the archive.
In the framework of the initiative “One belt, one road”, China plans to invest 5 dollars trilliardov through loans and infrastructure construction in such autocratique and dubious countries like Pakistan, Sri Lanka and others. Due to a policy of unlimited lending and mass construction of infrastructure, China is enhancing its global power to realize the dream of the restoration of the “Median Empire”.
But how prepared is China to lose billions of dollars due to their adventurous financial diplomacy?
The Chinese dilemma
For many years China has been financial abuse by irresponsible and corrupt government of Venezuela. The moment of truth came. Foreign exchange reserves of the country amount to no more than 10.5 billion, while debt payments reached 7.2 billion. Country can rapidly consume cash.
China has always encouraged the right of developing countries on debts, provided that the loans were issued by Western countries. But when we are talking about his private loans, would China have the right? There is absolutely no certainty. If he refuses from the part or from the whole gigantic debt of Venezuela it risks to provoke a Domino effect in his massive and irresponsible lending policy in autocratic countries. Requests for revisions to the terms and conditions of debt repayment will fall on all sides. China could face significant and well-deserved diplomatic and financial consequences.
China needs political stability of Venezuela. What are his options?
China and the Venezuelan crisis
It is unlikely that China got involved in the conflict. Geo-strategic interest of China, consisting in the extension of its influence throughout Latin America, prevents him from making an unequivocal choice in favor of the clan Maduro.
Representatives of the Venezuelan opposition has already declared that all Chinese loans is zilch, due to the lack of full transparency and the approval of the National Assembly. If Venezuela will be a regime change, China will try to find a compromise, suggesting, however, full repayment of the debt. It is also possible that Chinese representatives have already prepared the leaders of the opposition to such an eventuality.
It is not excluded that China is trying to influence some countries in Latin America, with whom he formed a close economic and financial cooperation, such as Brazil, Chile and Peru to discuss a possible compromise, while not overthrowing the current government. However, the support of the Lima Declaration is unthinkable. The Chinese model is incompatible with the return of democracy.