China has a long history of lending to Venezuela, dating back to when Hugo Chavez first came to power in 1999. Fast-forward to the present and Beijing is the embattled Maduro regime’s preeminent financier and lender of last resort.
China’s total financial commitment to the regime has been estimated as high as $70 billion. Most of these loans were extended between 2007-2014, when Venezuela represented 53% of China’s total lending to South America. At least $20 billion is believed to be still owing.
Most of these deals obligated Caracas to pay back loans with oil exports to China. The loans-for-oil approach worked for both sides initially, but when energy prices plummeted and the Venezuelan oil industry began to crumble, an increasing proportion of Venezuela’s overall exports had to be diverted to Chinese loan repayments, at the expense of foreign exchange-generating oil sales. For example, full loan payment circa mid-2018 amounted to over 375,000 barrels per day and $7 billion in annual revenue for the Venezuelan government.