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I remain deeply concerned that rules of international law have not been respected. President Donald Trump has been teasing military action in Venezuela for months now, but the capture of Venezuelan President Nicholas Maduro and his wife and the White House assertion that the US would run Venezuela for now shocked the world. Don't ask me who's in charge, because I'll give you an answer.
And it'll be very concuver.
What does that mean? We're in charge and leaders at the United Nations, the principles of sovereignty, political independence, and territorial integrity must be respected. Among the most vocal critics of the attack the Chinese government being Yasun trujin Jo.
I think China was stunned. It came out, so it's strongly condemned, and it did it within hours of the news breaking that Donald Trumph got into Venezuela and essentially sort of kidnapped the sitting leader.
China decried the US's blatant use of force against a sovereign state and called Maduro's seizure in attack on Venezuela hegemonic acts that threatened the peace and security of Latin America. There's a reason why China's response was so strong. Beijing has been one of the most significant supporters of Maduro's government amid sanctions and condemnation from the West.
These two are all weather friends, which is China's second highest tier of friendship, so it's the strongest of political friendship.
That's Bloomberg's Jenny Marsh who oversees our coverage of Greater China's economy and politics.
China underpins sort of the development and infrastructure and industry in Venezuela, and today China's the biggest buyer of Venezuelan oil, which is its main export. So really Beijing has been sort of keeping or is government aflow.
China is Venezuela's second largest trading partner after the US and its biggest creditor. Chinese companies like Sinopek and China National Petroleum Corporation have been significant investors in the country, which is the world's largest crude reserves. Latin America is of growing importance to China as a market for companies like electric car maker Byd, e commerce giant Shean, and
gaming and tech company ten Cent. There's also China's strategic interests in ports, perhaps most notably at the Panama Canal, that focus on Latin America, says Jenny, is why the US's intervention in Venezuela is such a setback for China.
It's clear from the remarks that Trump Marco Ribu have made over the recent days, this doesn't end with Venezuela. It's just the beginning of a much larger plan they have for reasserting American influence in Latin America, which they see is, you know, is their part of the hemisphere. Is that part of the world, and so what does that mean for Chinese influence in Latin America.
The US strike in Venezuela could also influence china strategy closer to home. In the aftermath of the attack, some on Chinese social media were quick to suggest it could provide a blueprint for how Beijing handles Taiwan.
I think that's the first question. A lot of people happen. They saw this, well, if Trump can go into Venezuela, what's stuff exchanging pain from going into Taipei and sashing President Leitchin from Taiwan.
This is the big take Asia from Bloomberg News I'm Wanha. Every week we take you inside some of the world's biggest and most powerful economies and the markets, tycoons, and businesses that drive this ever shifting region. The US strike on Venezuela and capture of its president sent shock waves across the globe. On today's show, what the intervention means for china strategy in Latin America and why a military action nine thousand miles from Beijing could change the calculus
in its own backyard. Jenny, China's Foreign ministry issued one of the strongest statements against the US attack on Venezuela. It was quite strongly worded. Can you take us through China's reaction and what you found surprising about it?
For Beijing, normally the playbook here and you saw this after the Russia's invasion of Ukraine, they released something very sort of vanilla and boiler plate. They let the news settle, they get a layer of the land, and then they react. And this time it was swift. You saw a lot of throat clearing from the lights of the UK, France, Canada. But China was unequivocal, and I think they were caught
off guard. And that was evidenced by the fact that just hours before Maduro was caught, his last public meeting was with a Chinese delegation of diplomats, which I think was just share coincidence, but the optics of that it just made Beijing look like they had been caught off the backfoot.
Yeah, definitely not a good look because it means in some ways that their intelligence perhaps also failed as well.
Yeah, they obviously didn't quite have their finger on the pulse, and particularly now you know, the Trump has been more open about how that unfolded. We know that the US had planned this for months and he was waiting over Christmas for the weather conditions to improve. So had the Chinese had good intelligence, they should really have known that this was going to happen. But obviously, you know, would have been kept very closely within sort of Trump's in a circle.
Now, China is Venezuela's biggest oil customer. I wonder if you can tell us about that oil and why it's important for China.
China on this side of this century extended about sixty billion dollars in credit lines to Venezuela. Venezuela was supplying China with oil and using the proceeds of those in sort of service of paying down this debt. This oil, I mean, by volume, is not particularly important to China. It's worth but four percent of Chinese oil imports, and obviously, since it was sanctioned by the US, it's not coming in through official channels. But it's a unique type of oil.
It's sort of high sulfur crude, and this is very important for sort of construction and road building. But it is very very steeply discounted, so it's very popular with China's independent refiners. So it's helping keep costs lower in China at a time when margins are already very squeezed. Trump Is said that the oil is no longer flowing out of Venezuela, and they've been very clear that this
is sort of a form of economic coercion. You know, Rubio was saying that they're not going to let the oil flow because this is a way of sort of forcing the new leader to do, you know, to align
Venezuela's policies with that of the US for China. You know, analysts have said that isn't an immediate problem because there is so much Venezuelan oil already shipped out and sort of in vessels in Asia that are sort of in the waters that can still kind of come to port, So there won't be an immediate shock to the Chinese market. In maybe in a month's time there's a deal struck between the US of Finistration and the Venezuelan ship and
that oil begins to flow again. So I think we have to sort of wait and see what the long term impact would be.
Now, Trump is also talking about US investments into the country's oil infrastructure, but we know that Chinese oil firms have also claims to some of Venezuela's reserves. How is that going to play out?
Yeah, it is a fascinating question, and Trump has offered no answers to it. You know, he has claimed going to run the country and the US company is going to come in and like, you know, get this oil flowing in the way that they wanted to and they haven't given a ropemap. But how any of that will
work legally? But again, you know, if US companies come in and sort of steal assets and steal rights that Chinese companies have paid to acquire, then obviously there's going to be political blow black there or he's at least risking sort of destabilizing this relationship which I've spent so long trying to sort of get to an equilibrium.
Beyond Venezuela, China has poured billions into Latin American countries as part of Beijing's Belt and Road initiative. They're kicked off in twenty thirteen. That's how the country invest in infrastructure projects, from Bogata's metro system to ports in Peru and Chile.
The Belt and Road has evolved a lot since then. You know, they have this phrase now small but beautiful projects in China's overall investment into Latin America has declined in recent years, but become no less important. It's now sort of challenged into much more strategic sectors for China. Things that align with this priority is so mineral extraction of things like lithium, which are key to its green energy. And last year South America became even more important as
a trade destination. You know is trying to tried to find new destinations, and these are markets that are open to things like Chinese evs like BYD has a big presence in Brazil. So these are very buoyant economies of very large populations, and so Forshi this is an important part of the world that he certainly doesn't want Trump sort of denying him access.
To, and with the US now effectively reclaiming Latin America as its own backyard, what do you think that signals for China's ability to still be able to project power and influence in the region.
I think it's a direct challenge to it, and we have to see how it plays out. And I think now the question is, you know, how far does Trump go in sort of pursuing this objective to sort of reclaim you know, South America and to be the chief influencer there if you like. Because he's just struck this very sort of fragile trade truts with China as well, which everybody seems sort of committed to keeping in place.
Now zooming out a bit. Many people are saying that Trump administration is steering the world to a new organization of global power where you have spheres of influence for the US, for Russia, China. Where does China fit into this and how could it use this shift to advance its own goals?
Potentially, if you're thinking about spheres of influence, America has it his own sphere. It doesn't want China in, but it certainly doesn't see China as having its own separate sphere that America won't be in. And it also make clear that America is not prepared to sort of stand back from projecting power around the world. And there was very slark language about building a military that can protect
the first island chain in Asia. So there's a lot of sort of contradictions there that I think China will be very aware of. I think the lesson they're probably learning from the last few days is that might is right, and it's very important to build up their own military power and to make sure they are projecting power as strongly as they can. And then the other side of that, I think is the way that she is trying to contrast China as sort of a beacon of stability compared
to Trump. You know, it was quite striking. Yesterday he had his first public engagement since Majuro was captured, with the Irish Prime Minister in Beijing, and he was talking about, you know, Beijing as a peace loving country, you know, really very dubbish comments about respecting the international world order. On the other side of the world, what Trump talking about well, you know, the leader of Columbia could be next, you know, making threats against the leaders in Cuba as well.
So I think Fashin is going to be a lot of posturing that China is seat of a peace loving, rule abiding power that you can really trust.
China portrays itself as a force for peace, but the reaction at home to what happened in Venezuela was starkly different. Some of its own citizens have argued on China's highly controlled social media platforms that Washington just handed Beijing a template for attacking Taiwan. That's after the break. The US strike in Venezuela has stirred a lot of speculation about Taiwan.
China's president Shi Jinping has said unification with Taiwan and island the country claims as its own is unstoppable, and after the weekend's ouster of Maduro, Bloomberg's Jenny Marsh says that some people have suggested the US may have inadvertently shown Beijing how it might use the same playbook on Taiwan.
When this first happened, you know, Chinese social media was a buzz with this. It was full of comments of people saying, you know, I suggest the same method to reclaim Taiwan in the future. Since the US isn't taken international law seriously, why should we care about it. There was one particularly sort of colorful comment. You know, the US imperialist lightning rate on Venezuela to capture Madeiro and his wife is the perfect blueprint for our military to
launch a surprise attack on Taiwan. Just because the public sort of jumps to this doesn't mean that she didn't think himself is changing his calculus and is suddenly going to invade. I will say, though, you know, the more Trump changes the sort of international norms about what the US will and won't do, the more it sort of waters down its adherents to the rules based order which
America founded. I think the conditions for a Chinese invasion of Taiwan change, right, and I think she is now facing a different set of conditions that he was facing five years ago. And then more favorable people we spoke to within the Taiwanese government were actually pretty bullish, and they said, you know, for them, this showed two things. One,
it showed that you know, Trump isn't taco. Trump doesn't always chicking out he is willing to sort of use the military when he thinks this is something that needs to be done, which is core to sort of US security interests, and they see that as a good thing for Taiwan. And two they also noted that, you know, Venezuela buys most of its weapons from China and Russia and that the US military just you know, made very
quick work of that. There's no evidence that sort of Chinese equipment failed during this operation, because Trump also said, you know, they had a lot of security assets in Venezuela who could have disabled some of these defense systems. But the Taiwanese just said they found this as evidence that the US military equipment is just far superior. US military equipment is what they have, So for them, they actually looked at it and thought this was pretty good for them.
Jenny says China's potential invasion of Taiwan and the US intervention in Venezuela play out two very different scenarios with a lot of deterrence. For a China attack on the island, there's.
No other major military power around Venezuela, and Venezuela's own military isn't very strong. If China was to go into Taipei. You know, Chaibwe Foresight has its own military which is stocked with US weapons, and then it's surrounded by US allies, so Japan, South Korea, and you know, Prime Minister san Aitakichi only last year was saying, you know, if there was an attack on Taiwan and the US became involved,
then you know, so could Japan. So China would be facing a lot more sort of military heft to contend with. And then as well, you know, part of what Trump did there was the blockade on venezud and oil, while China's the main, nearly only buyer of that, Whereas if the Chinese were to a blockade of at Taiwan's chips, the entire world relies on that right for sort of modern manufacturing. So I just think the consequences they're very different.
Now stepping back that Trump administration's attack on Venezuela follows a military strike on Iran and June, another country that China has a close relationship with, and that also comes on the heels of a new US arms package for Taipei that, if approved, would be the biggest ever you know, record arms package to Taipei. What kind of messaging does that send to She and whether this might further stoke tensions between the US and China.
What Trump said at the end of last year that him and She are now in the G two. So I think Trump knows there's sort of two big players on the world stage and it's him and it's huge and pain. I think militarily, Trump is proving that America still has a huge edge. You know, like if it comes to sort of who has the power of the guy, and you know it's America. You can't sort of compare
the American military to the PLA right now. I think that probably is sort of the takeaway from all of this, Like Trump is, he's made strikes in Nigeria, Yemen, Iran, and Venezuela. He's protecting America's power, I think in a way that we haven't seen in quite a while.
I mean, that can't sit well in Beijing.
I think for She it will only increase the urgency. He was already trying to modernize China's military because they want to be able to match US power, not because they want to invade other countries necessarily, but just because they don't want to be bullied and pushed around, and I think the trade war show the only way you can stop that is if you are a true equal, and so I think for she then it's just going to expediate the need to sort of make China's military as strong as it can.
Now, what could happen in Taiwan is, you know, theoretical at this point, whereas Latin America is looking down the barrel of concrete implications very soon. And I wonder, in light of that, what are you watching most closely?
I'm watching how far Trump goes, you know, testing China in South America. It's easy to sort of publish a security strategy and to make sort of big claims, but we've seen in Panama that, you know, it's not that easy in reality. And I think it's a test of how much Trump wants to keep Palsa sheet, you know. I think he's in such mixed signals about China. Sometimes I think that maybe is because those around him are more hawkish than he is. But how far is he
willing to go? And I guess it boils down to you is he happy to be in the G two or does he really want to be the G one?
You know?
And I think We haven't got the answer to that yet, but this is going to be a very interesting year to see.
Yeah, the start of a crazy year.
Yeah. You always think the next year is going to be quiet, and it's always busier.
This is The Big Take Asia from Bloomberg News. I'm wanha. To get more from The Big Take and unlimited access to all of Bloomberg dot Com, subscribe today at Bloomberg dot com slash podcast Offer. If you liked the episode, make sure to subscribe and review The Big Take Asia wherever you listen to podcasts. It really helps people find the show. Thanks for listening. To see you next time.