China is taking advantage of Venezuela’s crisis to gain valuable oil caches while looking to gain influence throughout Latin America, U.S. lawmakers and officials worry.
“It’s not clear that China is necessarily using Venezuela as a foothold,” Kenneth Merten, an ambassador in the State Department’s Bureau of Western Hemisphere Affairs, told the House Foreign Affairs Committee. “We are obviously watching very carefully what China does throughout the hemisphere and we are monitoring that very carefully.”
Merten offered that view after committee Chairman Ed Royce, R-Calif., noted that China is receives “hundreds of thousands of barrels of oil, every day” from the cash-strapped country as a debt repayment from strongman Nicolas Maduro’s regime. The Communist behemoth is poised to pour more money into Venezuela’s oil industry.
“Is the administration concerned about China’s economic stranglehold on Venezuela? And is China using Venezuela as a foothold to gain influence in the rest of the region?” Royce asked.
Merten downplayed those particular concerns, but implied a relationship between China’s ties to Maduro and the worsening of the crisis in Venezuela — not least because oil is being used to repay debts rather than to generate new revenue.
“Oil production continues to go down,” he said. “The national oil company, PDVSA, has been plagued my mismanagement, by political hacks replacing people who knew what they were doing, and the company continues to deteriorate, thus robbing the Venezuelan people and the Venezuelan government of what should be a very valuable source of income for them.
That dynamic might be a cautionary tale for other Latin American countries that consider economic partnerships with China.
“We regularly talk to our partners in the region . . .to explain what it really means to sign up to to some of the blandishments of [People’s Republic of China] in terms of loans and other things,” Merten said. “These are things that we’ve seen in the recent past that don’t necessarily help these countries out in the long term. They may be quick political fixes, but I think we are trying to explain in very clear terms that it makes more sense for long-term development of all or partners in the region to focus on rules-based and normal economic development.”
The decision by some countries to pursue a relationship with China rather than the United States affects American interests in multiple ways. For one thing, Latin America as a whole is a major source of trading partnerships. “We trade more than twice as much with the hemisphere as we do with China,” Merten said in his prepared testimony.
And insofar as China aids dictatorial regimes, it contributes indirectly to the kinds of crises that have caused an outflow of refugees from Venezuela.
“Our assistance programs in the region seek to support rule of law and governance and to make these countries better places to live, better places to do business, and thus ultimately reduce migration,” Merten said.
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