President Donald Trump has framed the recent U.S. military operation to capture Venezuelan leader Nicolás Maduro as a critical victory for American power and a direct check on Chinese influence. However, a closer examination by regional and geopolitical experts suggests the move may inadvertently benefit Beijing, allowing it to exit a costly financial disaster while the U.S. takes on a deeply troubled nation.
The Failed $100 Billion Bet
For over two decades, China invested heavily in Venezuela, pouring an estimated $100 billion into the country primarily to secure access to its vast oil reserves, the largest in the world. This partnership with the anti-U.S. governments of Hugo Chavez and Nicolás Maduro has, by most accounts, been a profound failure. Venezuela's oil production has collapsed due to mismanagement and sanctions, failing to meet China's soaring energy needs.
Analyst Melanie Hart of the Atlantic Council noted the relationship was "nowhere near an energy supply game-changer for Beijing." Andrew Small of the German Marshall Fund called it "probably the single biggest failure of any set of overseas investments or commitments they’ve made in the last 25 years." For China, Venezuela's oil sector is now widely seen as a "declining asset."
An Unexpected Exit Strategy
Paradoxically, increased U.S. involvement could offer China a clean escape. If American policy succeeds in overhauling Venezuela's crippled oil industry, Beijing could wind down its remaining investment, estimated at around $10 billion in outstanding loans. Hart suggests Chinese President Xi Jinping may be "offloading a declining asset at an opportune time."
This scenario has a precedent: the 2003 U.S. invasion of Iraq. After the invasion, Chinese companies moved in to develop Iraq's oil fields while American firms were more cautious. Small points out that a stabilized, U.S.-influenced Venezuela could present a similar opportunity for China to secure energy supplies with reduced risk and capital.
Broader Strategic Miscalculations
Beyond economics, experts question the Trump administration's broader strategic logic. While the raid humbled a regime defiant to Washington—undermining a Chinese narrative that alignment with Beijing offers protection from U.S. pressure—the administration's chaotic global approach may cede more ground than it gains.
Small highlighted Trump's decision to allow Nvidia to sell advanced AI chips to China, reversing Biden-era restrictions, as a concession with major technological implications. In a weekend opinion piece, former Biden-era China official Rush Doshi argued that by focusing on ventures like governing Venezuela, the U.S. is distracting itself while China dedicates vast resources to winning future technologies like AI and quantum computing.
Ultimately, while President Trump claims the Venezuela operation reins in rivals, evidence suggests it may simply allow China to cut its losses on a bad bet, potentially freeing resources for the long-term competition the U.S. claims to be waging.
