Issues & Studies© 44, no. 3 (September 2008): 99-147. Sino-Venezuelan Relations: Beyond Oil JOSEPH Y. S. CHENG AND HUANGAO SHI Sino-Venezuelan relations have witnessed an unprecedented inti- macy since the beginning of Hugo Chávez's presidency in 1999. While scholars hold divergent views on the possible implications of the suddenly improved bilateral relationship, they have reached a basic consensus that oil has been the driving force. This article explores the underlying dy- namics of this relationship from the Chinese perspective. It argues that oil interest actually plays a rather limited role and will continue to remain an insignificant variable in Sino-Venezuelan ties in the foreseeable future. Despite the apparent closeness of the ties in recent years, the foundation forcontinued improvement in the future seems farfromsolid. Sino-Venezue- lan relations have caused serious concerns in the United States, which, for centuries, have seen Latin America as its sphere of influence. Although the neo-conservatives are worried about the deviant Chávez administration and a rising China, the chance of any direct U.S. intervention remains slim. Nevertheless, the China-U.S.-Venezuelan triangular relationship poses a JOSEPH Y. S. CHENG (鄭宇碩) is chair professor of political science and coordinator of the Contemporary China Research Project, City University of Hong Kong. He is the founding editor of the Hong Kong Journal of Social Sciences and The Journal of Comparative Asian Development. He has published widely on political development in China and Hong Kong, Chinese foreign policy, and local government in southern China. His e-mail address is <[email protected]>. HUANGAO SHI (史煥高) is a postgraduate student in the Department of Government and In- ternational Studies, Hong Kong Baptist University. His research interests mainly focus on Chinese foreign policy, labor movement in contemporary China, and China's governance capacity. Corruption in Chinese state-owned enterprises and China's Sudanese policy are his research-topics-in-progress. His e-mail address is <[email protected]>. © Institute of International Relations, National Chengchi University, Taipei, Taiwan (ROC). September 2008 99 ISSUES & STUDIES challenge to the Chinese leadership in its effort to balance its various for- eign policy objectives. KEYWORDS: Sino-Venezuelan relations; oil; trade and investment; balance in foreign policy objectives. * * * The development of Sino-Venezuelan relations in recent years 論 has attracted a lot of attention in the Western media. In many ways, it is in line with the broad trends of China's foreign policy: resources diplomacy, extending China's global reach to correspond to its "peaceful rise," giving a higher profile to its "Third Worldist" orientation in diplomacy, etc. Yet support for radicalism in international relations has an adverse effect on China's image as a status quo power. Establishing a strategic partnership with Venezuela may be perceived as a direct interna- tional relations challenge to U.S. interests in its own sphere of influence, which goes against Beijing's efforts to avoid provoking the United States. Also, having close ties with the Hugo Chávez administration is not exactly in line with China's enhancement of its "soft power" through the establish- ment of more than one hundred Confucius Institutes (孔子學院) all over the world. It is the intention of this article to examine China's policy to- ward Venezuela in the light of these contradictions. The article attempts to analyze China's objectives and assess the achievements of its approach to Venezuela. China's Foreign Policy: Toward a "Responsible Stakeholder" In line with its economic reforms and its opening up to the outside world, China has, in its foreign policy, abandoned support for revolutionary ideology and opted for system maintenance.1 As Samuel Kim argues, 1Rana Mitter, "An Uneasy Engagement: Chinese Ideas of Global Order and Justice in 100 September 2008 Sino-Venezuelan Relations: Beyond Oil despite Beijing's rhetorical bemoaning of inequalities in the international economic system, criticism of military intervention by the major powers, and denunciation of U.S. unilateralism, Chinese foreign policy since the early 1980s can in fact be best characterized as dynamic "system mainte- nance."2 Since the beginning of the new millennium, China has increasing- ly been motivated by a desire to maintain the status quo through stable relations with the major powers and the promotion of China's gradual rise in the international system.3 China has been stepping up its major-power diplomacy (大國外交, daguo waijiao). It has been working to improve relations with Russia, Germany, France, and the European Union while avoiding confrontation with the United States. President Hu Jintao's (胡錦 濤) attendance at the North-South conference alongside the G-8 summit in France represented a small breakthrough, as the G-8 had long been per- ceived as a major-power club dominated by the Western world and dis- criminating against the interests of developing countries. This change of mind underscored China's desire to participate in major-power forums.4 In recent years, the concept of "peaceful rise" (和平崛起, heping jueqi) has been developed by the Chinese leadership to counter the "China threat" perception.5 When introducing the concept at Harvard University in December 2003, Premier Wen Jiabao (溫家寶) of China argued that while the Euro-American powers rose through violent imperial expansion, China intended to exploit "scientific and technological progress to solve Historical Perspective," in Order and Justice in International Relations, ed. Rosemary Foot, John Lewis Gaddis, and Andrew Hurrell (Oxford: Oxford University Press, 2003), 207-36. 2Samuel S. Kim, "China and the United Nations," in China Joins the World: Progress and Prospects, ed. Elizabeth Economy and Michel Oksenberg (New York: Council on Foreign Relations Press, 1999), 46. 3Zhang Yunling, "Ruhe renshi Zhongguo zai Yatai diqu mianlin de guoji huanjing" (How to understand the international environment China faces in the Asia-Pacific region), Dangdai Yatai (Contemporary Asia and the Pacific), no. 6 (June 2003): 13-14. 4Yong Deng and Thomas G. Moore, "China Views Globalization: Toward a New Great- Power Politics?" The Washington Quarterly 27, no. 3 (Summer 2004): 117-36. 5Joseph Y. S. Cheng, "How China Deals with the 'China Threat' Perception," in Challenges and Policy Programmes of China's New Leadership, ed. Joseph Y. S. Cheng (Hong Kong: City University of Hong Kong Press, 2007), 207-44. September 2008 101 ISSUES & STUDIES the resource and the environmental problems."6 In the eyes of Chinese scholars within the establishment, "peaceful rise" is the formula that sums up the essence of domestic policy and foreign relations in reforming China.7 Western observers also agree that China is more integrated into and more cooperative within regional and global political and economic systems than ever before in its history.8 In this connection, China's strategic calculus is characterized by a dynamic status quo orientation that seeks what Robert Gilpin terms "changes in an international system" rather than "changes of an international system."9 Scholars in China share a basic consensus that, in the next few decades, the Chinese nation will be preoccupied with raising the living standards of its people. This path toward modernization may be called "the development path to a peaceful rise," as China seeks a peaceful inter- national environment in which it can concentrate on socioeconomic de- velopment. It avoids challenging the sole superpower, the United States, and attempts to maintain good relations with its neighbors, especially Rus- sia, Japan, and India. China's economic development thus far has been driven by capital, technology, resources, and markets acquired through peaceful means. China does not seek hegemony or predominance in world and regional affairs as it realizes that it does not have the capability to do so. It has been engaging in opposition to U.S. hegemony, though in a relatively low-profile way. Pursuit of major-power diplomacy means that China increasingly demands recognition of its status and influence as a major power. It advocates a new international political and economic 6Wen Jiabao, "Turning Your Eyes to China" (把目光投向中國) (Speech at Harvard Uni- versity, December 10, 2003), http://www.people.com.cn/GB/shehui/1061/2241298.html. Since late 2004, the new term "peaceful development" has been stressed more often than "peaceful rise," but the logic of the policy remains similar. 7Ling Dequan, "'Heping jueqi' gangju muzhang" (Explaining "peaceful rise"), Liaowang (Outlook Weekly) (Beijing), February 2, 2004, 6. 8Alastair Iain Johnston, "Is China a Status Quo Power?" International Security 27, no. 4 (Spring 2003): 5-56; and Rosemary Foot, "Chinese Power and the Idea of a Responsible State," The China Journal, no. 45 (January 2001): 1-19. 9Robert Gilpin, War and Change in World Politics (Cambridge and New York: Cambridge University Press, 1981), 208. 102 September 2008 Sino-Venezuelan Relations: Beyond Oil order, one that can be achieved through incremental reforms and the de- mocratization of international relations. In recent years, it has been con- siderably more active in joint efforts with India, Brazil, South Africa, and Mexico to promote developing countries' interests in international forums. Chinese leaders appreciate that China's development depends on world peace because it needs time.10 To this end, China