China and its allies called for a meeting with the United Nations (U.N.) Security Council to debate U.S. President Donald Trump’s decision to capture Venezuela’s President Nicolas Maduro on Saturday (Jan.3). Maduro’s arrest signals a loss of China’s ally in Latin America.
The meeting was convened at the request of Colombia, backed by China and Russia, all allies of Maduro.
The U.S. ambassador to the U.N., Mike Waltz, says that the action is a surgical law enforcement operation.
Waltz said, “This was a law enforcement operation. The United States arrested a narco-trafficker who is now going to stand trial.”
In March 2020, Maduro was charged in the Southern District of New York for narco-terrorism, and conspiracy to import cocaine into the U.S., according to the U.S. State Department statement.
The state department on Aug. 7 has increased the reward offer up to $50 million, from US$25 million, for information leading to the arrest of Maduro.
“Maduro helped manage and ultimately lead the Cartel of the Suns, a Venezuelan drug-trafficking organization, comprised of high-ranking Venezuelan officials,” and “coordinated with narcotics traffickers in Honduras and other countries, to facilitate large-scale drug trafficking,” the statement said.
The capture of Maduro is seen as a blow to China’s influence in the Western Hemisphere.
A delegation from the Chinese Communist Party (CCP) was meeting with Maduro in Venezuela over the weekend, just hours before he was captured.
CEO of BlackOps Partners Casey Fleming said, “Venezuela was a forward operating base for China, Russia, Iran, and others of what we call the China Axis.”
China has worked to establish its influence in Latin America by lending money to build infrastructure projects and persuading those countries to cut ties with Taiwan, a feat which has been successful over the last 20 years, with several countries like Colombia, Costa Rica, and Panama jumping on board.
In Panama, Hong-Kong based company CK Hutchison Holdings has been operating the main entry and exit points of the Panama Canal for nearly 30 years since 1997, putting China in a position to cut off nearly half of U.S. trade.
US Secretary of State Marco Rubio said it was unacceptable for Hong Kong-based companies to control the canal’s entry and exit points, arguing they could shut down transit under CCP’s order and threaten U.S. national security interests.
Venezuela has deepened its relations with the CCP ever since going back to dictator Hugo Chavez.
After Chavez’s death in 2013, Maduro took over, continuing those relations with China. Maduro even enrolled his son in China’s top-ranking Beijing University back in 2016.
And all along, Venezuela has been supplying oil to China. Roughly 80 per cent of Venezuela’s oil exports have been going to China and are sold at a significant discount.
Without Maduro, the CCP’s grip on the Western hemisphere could change.
Trump said following Maduro’s capture, “So we’ll be selling large amounts of oil to other countries, many of whom are using it now, but I would say many more will come.”
Maduro’s Capture Threatens China’s Oil Supply, Repayment
China’s top financial regulator has ordered policy banks and major lenders to report on Venezuela-related lending and tightened risk monitoring according to Bloomberg sources on Monday, a move that reflects growing concern in Beijing as geopolitical tensions threaten China’s oil supply and repayment, including its investments in the region.
Venezuela has been a key Chinese partner for years. In the mid-2000s, China was in need of oil and Venezuela needed money. The two countries struck a trade partnership centered on a loans-for-oil arrangement.
AidData, a Virginia-based research institute, claims China’s overall loans to the country since 2,000 have reached over US$100 billion . The country now owes an estimated US$10 billion to Beijing.
But clearing its debt has been a long-term issue for Venezuela.
U.S. sanctions and Venezuela’s economic slumps have forced China to accept oil instead of cash.
The pressure campaign by the U.S. could make oil repayment to China more difficult.
Shortly after that US force captured Maduro on Saturday, US President Donald Trump claimed that the U.S. was ready to take over Venezuela’s oil industry.
Rubio said the U.S. military will block sanctioned oil tankers until Venezuela opens its energy sector to foreign investment. The move could result in Venezuela shifting its priorities to Washington over repaying its debt to Beijing.
Even if Venezuela’s oil industry helps repay some Chinese loans, a stronger U.S. presence in Latin America poses new risks for China’s lenders.
