Xi’s not there: what China’s Venezuela response reveals - The Intelligence from The Economist Recap

Podcast: The Intelligence from The Economist

Published: 2026-01-06

Duration: 20 minutes

Guests: Aaron Connolly

Summary

China's response to the U.S. intervention in Venezuela reveals the limits of its influence, despite being a major creditor and oil buyer. The situation underscores China's focus on Asia over Latin America.

What Happened

In this episode, the focus is on the geopolitical dynamics between China and Venezuela, especially in the wake of America's intervention to extract Nicolás Maduro to the U.S. Despite being Venezuela's largest creditor and oil buyer, China's response was limited to rhetorical support, highlighting the limits of its influence outside Asia.

China had invested heavily in Venezuela as part of its strategy to expand influence in Latin America. However, Venezuela's strategic importance to China has diminished, as China's primary geopolitical interests remain centered in Asia. This reflects China's limited willingness to engage in protecting its Latin American investments when faced with U.S. actions.

Other Asian countries reacted cautiously to the U.S. intervention in Venezuela. While North Korea condemned the action, other nations, especially U.S. allies like Japan, issued tepid responses, prioritizing their relationship with the United States over regional solidarity with Venezuela.

The episode also explores how the U.S. intervention in Venezuela serves as a potential propaganda win for China. By highlighting America's aggressive foreign policy, China can argue against the U.S.'s self-proclaimed role as a beacon of freedom. However, China's strategic focus remains on ensuring the stability of its own region, rather than deeply entangling itself in Latin American affairs.

The conversation shifts to the broader implications of the operation in Venezuela, questioning whether the U.S.'s actions were part of a broader strategy to expose China's geopolitical weaknesses. It discusses how Latin American countries might reassess their economic partnerships with China based on the events in Venezuela.

Economic dynamics also come into play with the discussion about the U.S. dollar's decline due to trade policies, particularly those implemented by Donald Trump. The weakening dollar, despite being potentially beneficial for developing countries, came with increased borrowing costs due to rising risk premiums.

The episode closes by examining the impact of luxury goods production, particularly handbags, which have faced scrutiny over quality and craftsmanship. This reflects broader shifts in consumer preferences and the luxury market's adaptation to maintain its allure amidst expanding production demands.

Key Insights

• China remains Venezuela's largest creditor and oil buyer, yet its response to U.S. actions in Venezuela was limited to rhetorical support, reflecting a strategic focus primarily on Asia rather than Latin America.
• The U.S. intervention in Venezuela is perceived as a potential propaganda opportunity for China, which can use it to critique America's foreign policy stance while maintaining its regional stability focus.
• Despite China's significant investments in Venezuela, the country's strategic importance to China has waned, indicating a limited willingness to protect its Latin American interests against U.S. influence.
• The U.S. dollar's decline due to trade policies, particularly under Donald Trump, has led to increased borrowing costs for developing countries, despite potential benefits from a weaker dollar.