Why Venezuela's collapse emboldens rather than deters China on Taiwan
Beijing watched Venezuela's economy contract 88% under Western sanctions—and concluded that authoritarian regimes can survive isolation. The lesson China learned is not the one the West intended to teach.
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The Lesson Beijing Refuses to Learn
Venezuela’s economy contracted 88% between 2013 and 2020. Seven million citizens fled. Hyperinflation peaked above 130,000%. The Maduro regime, cut off from Western financial systems and hemorrhaging oil revenue, presides over a humanitarian catastrophe that should serve as the definitive cautionary tale for any authoritarian state contemplating isolation from the global economic order.
Beijing watched this unfold with keen interest—and drew precisely the opposite conclusion that Western strategists expected.
The puzzle is genuine. China’s Taiwan strategy invites the very isolation that destroyed Venezuela. Seizing the island would trigger sanctions dwarfing anything imposed on Caracas, potentially severing China from the dollar system, SWIFT networks, and technology supply chains that sustain its economy. Yet Xi Jinping has ordered the People’s Liberation Army to develop capabilities for a Taiwan conflict by 2027. The 2025 Pentagon report on Chinese military power identifies three required strategic capabilities: decisive victory over Taiwan, counterbalancing American intervention, and deterring additional fronts.
Why does Venezuela’s visible suffering fail to deter?
The answer lies not in Beijing’s irrationality but in its reading of the Venezuelan case—a reading that diverges fundamentally from Western assumptions about what that collapse demonstrates.
What Venezuela Actually Proves
Western analysts see Venezuela as a morality play about authoritarian overreach. Sanctions worked. Isolation punished. The regime survives only as a hollow shell, its people impoverished, its economy destroyed. The lesson seems obvious: this is what happens when you defy the international order.
Beijing sees something different entirely.
The Maduro regime endures. It has not collapsed, democratized, or moderated. Despite comprehensive sanctions beginning in 2017—asset freezes, sectoral restrictions on oil and finance, secondary sanctions threatening any entity doing business with Caracas—Nicolás Maduro remains in power. His security apparatus functions. His inner circle stays loyal. The regime has survived longer under maximum pressure than many Western governments survive electoral cycles.
This durability matters more to Chinese strategists than the humanitarian cost. Authoritarian regimes do not measure success by GDP growth or citizen welfare. They measure it by regime survival. By that metric, Venezuela is not a failure to be avoided. It is a playbook to be refined.
The refinement involves three observations Beijing has made carefully.
First, sanctions strengthen authoritarian control when the regime can blame external enemies for internal suffering. Research from the German Institute for Global and Area Studies finds that sanctions “often paradoxically strengthen authoritarian regimes rather than weaken them.” The mechanism is straightforward: external pressure creates rally-round-the-flag effects, justifies repression as national defense, and delegitimizes domestic opposition as foreign agents. Maduro has exploited this dynamic relentlessly. Xi Jinping, whose entire legitimacy narrative rests on reversing China’s “century of humiliation” at foreign hands, would find such framing even easier.
Second, mass emigration stabilizes rather than destabilizes authoritarian rule. Venezuela’s 7.7 million emigrants represent the country’s most discontented, capable, and politically dangerous citizens—precisely the people who might otherwise organize resistance. Their departure exports discontent while importing remittances. The regime faces less internal pressure, not more, because its potential opponents have voted with their feet.
Third, and most critically: China supported Venezuela throughout the crisis. Beijing provided over $60 billion in oil-backed loans, became Caracas’s primary oil purchaser, and offered political cover at the United Nations. The US-China Economic and Security Review Commission documented this relationship in detail. Venezuela’s isolation from the West was never isolation from the world. An alternative support network existed.
This third observation transforms how Beijing reads the Venezuelan precedent. The lesson is not “avoid isolation.” The lesson is “build your own support network first.”
The Infrastructure of Defiance
China has spent two decades constructing precisely such a network.
The Cross-Border Interbank Payment System (CIPS) now enables member states to transfer funds without touching SWIFT or dollar-denominated systems. It remains smaller than Western alternatives—processing roughly 3% of SWIFT’s volume—but it exists, it functions, and it grows. Every sanctioned Russian oligarch routing payments through CIPS validates the system’s purpose.
The Belt and Road Initiative has created infrastructure dependencies across 140 countries. These are not primarily investments seeking returns. They are strategic assets creating political obligations. When Western nations threaten to isolate China, Beijing can point to ports, railways, and power plants across the Global South and ask: who exactly will enforce this isolation?
China’s semiconductor push, though still dependent on Taiwanese and Western technology for cutting-edge chips, has achieved substantial progress in mature nodes. The country now produces the chips needed for most military applications, industrial controls, and consumer electronics. Only the most advanced AI training and leading-edge smartphone processors require imports Beijing cannot yet replace. This is a vulnerability, but not a fatal one.
The digital yuan offers an alternative to dollar hegemony for international trade. Energy agreements with Russia, Iran, and Gulf states reduce dependence on sea lanes the US Navy controls. Stockpiles of critical materials—rare earths, grain, copper—provide buffers against supply chain disruption.
None of these alternatives matches Western systems in efficiency or scale. That is not the point. They need only function well enough to sustain a Chinese economy under maximum pressure for long enough to achieve strategic objectives. Venezuela survived a decade of comprehensive sanctions with far fewer resources and far less preparation. Beijing has studied that survival carefully.
The Legitimacy Calculus
Economic cost-benefit analysis misses the deeper dynamic driving China’s Taiwan strategy.
The Chinese Communist Party derives its legitimacy from a specific historical narrative: the restoration of Chinese greatness after a century of humiliation by foreign powers. This narrative requires territorial completion. Taiwan’s existence as a separate polity represents an unhealed wound from that humiliation, a remnant of the civil war the Party claims to have won, a daily reminder that reunification remains incomplete.
Xi Jinping referenced China as a “great power” 26 times in his 2017 Party Congress speech—a rhetorical shift from explaining past weakness to demanding present action. The humiliation narrative has transformed from justification for patience into a countdown timer for restoration.
China’s 2022 white paper on Taiwan states this explicitly: “National reunification by peaceful means is the first choice of the CPC and the Chinese government in resolving the Taiwan question, as it best serves the interests of the Chinese nation as a whole.” But the document reserves force as a last resort, and Xi has set 2027 as the deadline for military readiness. Peaceful means remain preferred. They are not required.
This creates a legitimacy trap that Venezuela’s experience does not address.
Maduro never staked his regime’s survival on conquering territory. His legitimacy claims, however hollow, do not require external action. He can survive indefinitely in a diminished state, ruling over ruins, because his narrative demands only that he remain in power against “imperialist aggression.”
Xi cannot. The Party’s legitimacy requires reunification. Not eventually. Not theoretically. Actually. The Patriotic Education Law passed in 2023 institutionalizes this requirement, mandating nationalist education that frames Taiwan’s return as historically inevitable and morally necessary. Decades of such education have created domestic political constraints where not pursuing reunification threatens regime stability more than international isolation would.
Venezuela proves authoritarian regimes can survive isolation. It does not prove they can survive abandoning their core legitimacy claims. For Beijing, the relevant question is not “can we survive sanctions?” but “can we survive not trying?”
The Temporal Mismatch
Western deterrence theory assumes rational actors weighing costs against benefits within comparable time horizons. China’s strategic culture operates on a fundamentally different temporal scale.
The “century of humiliation” narrative spans 1839 to 1949—110 years of foreign domination that the Party has spent 75 years reversing. Xi’s “Two Centenaries” goals target 2021 (Party centenary) and 2049 (PRC centenary). The Belt and Road Initiative envisions infrastructure transforming Eurasia over decades. Chinese strategic planning routinely extends to 2035 and 2049.
Western democracies reset strategy every four years when governments change. Sanctions regimes face constant pressure for exemptions and relief. Coalition unity erodes as domestic politics shift. The European Union’s experience with Russia sanctions—constant debates over energy carve-outs, agricultural exemptions, and enforcement gaps—demonstrates how difficult sustained isolation becomes.
Beijing calculates that it can outlast Western resolve. Venezuela has endured sanctions since 2017. Russia has endured them since 2014. Neither regime has collapsed. Neither has moderated. The sanctions remain, but their architects have changed governments multiple times, and enforcement has proven inconsistent.
A Taiwan crisis would trigger more severe measures than Venezuela or Russia faced. But Beijing’s planning horizon extends beyond any Western electoral cycle. The Party can accept a decade of economic pain if it believes the alternative is legitimacy collapse. Western publics, facing energy price spikes and supply chain disruptions, may not sustain maximum pressure for a decade.
This temporal asymmetry inverts the deterrence calculation. Short-term costs that would be politically fatal for democratic leaders become acceptable for a regime planning in generations.
The Learning Curve
China has studied not only Venezuela but every sanctions regime of the past two decades.
Iran demonstrated that sanctions can be evaded through complex financial structures, front companies, and willing intermediaries. The “dark fleet” of tankers obscuring ownership and routes now moves Russian oil despite Western restrictions. These evasion techniques transfer readily.
Russia demonstrated that commodity exporters retain leverage even under sanctions. Europe’s dependence on Russian gas limited the severity of initial measures and forced embarrassing carve-outs. China’s dominance in rare earth processing, solar panel production, and pharmaceutical precursors creates similar leverage.
North Korea demonstrated that nuclear-armed states face fundamentally different cost calculations. China’s arsenal, though smaller than American or Russian stockpiles, provides ultimate insurance against regime-threatening military action.
Each case provides data points. Each sanctions regime becomes, in effect, a training dataset for future evasion. Western policymakers face a paradox: every sanctions program they implement teaches adversaries how to circumvent the next one.
China has also learned from its own experience. The 2018 ZTE crisis, when American export controls nearly destroyed the telecommunications company, shocked Beijing into accelerating semiconductor self-sufficiency programs. The subsequent push for technological independence has not achieved cutting-edge capabilities, but it has reduced critical dependencies. The lesson learned was not “avoid American anger” but “reduce American leverage.”
The Taiwan Variable
Taiwan’s semiconductor industry complicates this calculation in ways that cut both directions.
TSMC produces over 90% of the world’s most advanced logic chips. A Chinese invasion would almost certainly destroy this capacity—either through combat damage, deliberate sabotage, or the flight of irreplaceable engineers. China would seize an island but lose the capability that makes it valuable.
This should deter invasion. It does not, for three reasons.
First, Beijing increasingly views Taiwan’s chip dominance as a threat rather than an asset. The island’s strategic value to the United States depends on those fabs. Destroying them eliminates America’s primary incentive to intervene. From Beijing’s perspective, TSMC is not a prize to capture but a threat to neutralize.
Second, China’s own chip industry, while lagging at cutting edge, suffices for military applications. The PLA does not need 3-nanometer processors. It needs reliable supplies of mature-node chips for missiles, communications, and vehicles. Domestic production meets these requirements.
Third, the semiconductor threat operates symmetrically. If the United States can threaten to cut China off from advanced chips, China can threaten to cut the world off from everything else TSMC produces. Mutual destruction is not deterrence. It is a different kind of leverage.
The Unlearned Lesson
Venezuela’s collapse does contain a genuine warning for Beijing. It is simply not the warning Western analysts assume.
The Maduro regime survives, but it rules over nothing worth having. The economy has ceased to function in any meaningful sense. The population has fled or suffers. The country’s oil wealth—once the largest proven reserves on Earth—generates a fraction of its former revenue because the infrastructure to extract and refine it has collapsed.
China could survive isolation in the sense that the Communist Party could remain in power. It could not survive isolation while maintaining the economic growth that provides its secondary legitimacy claim. The Party promises both national restoration and rising living standards. Sanctions severe enough to matter would force a choice between them.
This is the lesson Beijing should learn but appears not to have absorbed: survival is not the same as success. Maduro survives. He has not succeeded at anything except remaining in power. His revolution is a hollow shell, his country a cautionary tale, his legacy ashes.
Xi Jinping’s China is not Venezuela. It has vastly greater resources, more sophisticated institutions, deeper reserves, and more capable alternatives to Western systems. But it also has vastly greater ambitions. The Party does not merely want to survive. It wants to restore Chinese centrality in the global order, achieve technological leadership, and complete territorial reunification. These goals require economic capacity that isolation would destroy.
The question is whether Beijing has confused regime survival with strategic success. Venezuela proves the former is possible under extreme pressure. It says nothing about the latter.
The Stakes
If current trajectories continue, the risk of a Taiwan crisis rises with each passing year.
China’s military capabilities improve faster than Taiwan’s defenses or American force posture in the region. The 2027 deadline approaches. Xi Jinping, now in his third term with no apparent successor, faces the question every aging autocrat confronts: accomplish the defining goal now, or risk dying with it unachieved.
The economic costs of a Taiwan conflict would be catastrophic for all parties. Global semiconductor supply chains would collapse. Trade worth trillions of dollars would halt. Financial markets would face disruptions exceeding 2008. Neither side would emerge stronger in absolute terms.
But relative calculations differ from absolute ones. If Beijing believes the United States would suffer proportionally more—or that American political will would crack first—the economic devastation becomes a feature rather than a bug. Venezuela’s economy was destroyed, but Maduro outlasted multiple American administrations. The precedent is not reassuring.
Western deterrence strategy assumes that demonstrating costs will prevent conflict. Venezuela demonstrates that authoritarian regimes can absorb costs Western analysts consider prohibitive. The question is not whether Beijing understands the risks. The question is whether Beijing’s risk tolerance exceeds Western imagination.
What Might Change
Three factors could alter this trajectory.
First, a credible demonstration that Taiwan-specific sanctions would be qualitatively different from Venezuela or Russia precedents. This would require pre-positioned coalitions, automatic triggers, and mechanisms resistant to erosion over time. Current sanctions regimes provide no such model. Building one would require unprecedented coordination among allies who have proven unable to maintain unity on lesser issues.
Second, internal Chinese developments that shift the legitimacy calculus. Economic crisis, elite fracture, or succession uncertainty could make the Taiwan gamble more attractive (as a distraction) or less attractive (as an unaffordable risk). The property sector crisis, demographic decline, and youth unemployment create pressures that could cut either direction. External observers cannot predict which.
Third, Taiwanese actions that change Beijing’s cost-benefit analysis. Formal independence declarations would accelerate timelines. Credible defense investments—particularly in asymmetric capabilities that raise invasion costs—might extend them. The island’s choices matter more than most analyses acknowledge.
None of these factors is within easy Western control. The uncomfortable truth is that China’s Taiwan strategy responds primarily to internal dynamics that external pressure cannot readily influence. Venezuela’s collapse was supposed to demonstrate the costs of defying the international order. Instead, it demonstrated that regimes willing to accept those costs can survive them.
The lesson Beijing learned is not the lesson the West intended to teach.
Frequently Asked Questions
Q: Could sanctions against China over Taiwan be as severe as those against Venezuela? A: They would likely be far more severe in design but face greater enforcement challenges. China’s integration into global supply chains means comprehensive sanctions would damage sanctioning countries almost as much as China itself. The mutual economic destruction creates deterrence that runs both directions.
Q: Why hasn’t Venezuela’s humanitarian crisis caused regime change? A: Mass emigration exported the most discontented citizens, sanctions provided a scapegoat for economic failures, and Chinese support prevented complete isolation. The regime’s survival toolkit—repression, propaganda, external blame—proved more resilient than Western analysts expected.
Q: Does China’s semiconductor push reduce Taiwan’s strategic importance? A: Partially. China can now produce chips adequate for military applications and most industrial uses. But cutting-edge AI training and advanced consumer electronics still require Taiwanese or Western technology. The dependency has narrowed but not disappeared.
Q: What would make Western deterrence more credible to Beijing? A: Pre-committed, automatic sanctions with broad coalition support and mechanisms resistant to political erosion. Current sanctions regimes—subject to exemptions, enforcement gaps, and coalition fatigue—demonstrate that Western resolve erodes over time. Beijing’s planning horizon extends beyond Western political cycles.
The Quiet Calculation
In the end, Venezuela offers Beijing not a warning but a reassurance. Authoritarian regimes can survive international isolation. They can outlast Western political cycles. They can maintain power while their economies collapse and their people flee. Survival is possible.
Whether survival constitutes success is a different question—one that Venezuela’s hollowed-out Bolivarian revolution answers clearly enough for those willing to see. Maduro endures. His country does not.
Xi Jinping may be making the same miscalculation on a vastly larger scale: confusing regime persistence with national achievement, authoritarian durability with strategic victory. The Party might survive a Taiwan war and subsequent isolation. China as a great power, with the economic capacity to sustain that status, might not.
Venezuela’s lesson is available for anyone willing to learn it. Beijing has chosen to learn something else.
Sources & Further Reading
The analysis in this article draws on research and reporting from:
- 2025 Pentagon Report on Chinese Military Power - Primary source on PLA modernization and 2027 timeline
- China’s 2022 White Paper on Taiwan - Authoritative statement of Beijing’s reunification policy
- Congressional Research Service: Venezuela Sanctions Overview - Comprehensive documentation of US sanctions evolution
- German Institute for Global and Area Studies - Research on sanctions and authoritarian resilience
- US-China Economic and Security Review Commission - Documentation of China-Venezuela relationship
- Semiconductor Industry Association - Analysis of China’s chip industry progress
- Turing Institute: China’s Semiconductor Self-Sufficiency - Assessment of technological independence efforts
- Patriotic Education Law of the PRC - Primary legal text on nationalist education requirements
