There is a subtext in the American action in Venezuela which is all-too-visible – the United States’s rivalry with China.The American rationale for the invasion of Venezuela and the kidnapping of its president and his wife has been shifting rapidly. From illegal immigration and drug smuggling, it now seems to be centered around Venezuelan oil. But behind that is a larger theme which was spelt out in the National Security Strategy document released recently.This is what was termed as the “ ’Trump Corollary’ to the Monroe Doctrine.” The US may want stability in Latin America to prevent mass migration to the US, or governments who will crack down on narco-terrorism but what it also wants is a hemisphere free from “hostile foreign incursion or ownership of key assets.” As Trump noted in his January 3 press conference:“Under our new national security strategy, American dominance in the Western hemisphere will never be questioned again. Won’t happen.”If you read carefully, it’s clear that the target is China. And this is emphasised in the NSS observation that as part of this policy, the US “will deny non-Hemispheric competitors” military facilities in the region “or to own or control strategically vital assets in our Hemisphere.”Speaking to NBC on Sunday, US secretary of state, Marco Rubio, who is supposed to be running Venezuela as the US proconsul, declared, “This is the Western Hemisphere. This is where we live – and we’re not going to allow the Western Hemisphere to be a base of operation for adversaries, competitors, and rivals of the United States.”Venezuela has the world’s largest oil reserves, some 303 billion barrels. Its current production is roughly 1 million barrels per day, down from 3 million bpd on account of poor management and US sanctions. But China is the destination of 80% of this oil. It has also invested in the Venezuelan oil industry, as has the US (through Chevron, that still operates there) and some European companies.Trump has now expansively suggested that the US will take over the country and revitalise its oil industry, of course, at a cost to the Venezuelans. But, his intentions are clear. As he noted in his January 3 press conference, “We built Venezuela’s oil industry with American talent, drive and skill, and the socialist regime stole it from us during those previous administrations, and they stole it through force.” In essence he wants reimbursement for the nationalisation, as well as the alleged damage done to the US through the drug smuggling.China in Latin AmericaChina has developed substantial interests in Latin America, underscored now by the fact that some 24 countries in Latin America have signed up to the Belt & Road Initiative (BRI). In practical terms, Chinese interests involve copper in Peru, lithium in Argentina and Chile as well as iron ore. It owns extensive hydropower facilities in Brazil, is involved in electricity distribution in Chile, as well as oil extraction in Venezuela and Ecuador. There is growing Chinese investment in renewables in Latin America.Among infrastructure developments, what stands out is the Chancay port in Peru and development of railroads in Colombia and power grids in several countries, including Argentina. Huawei operates in several countries of the region and has data centres and cloud computing assets there. As for space, China’s largest non-domestic space facility is in Argentina.Chinese development banks have provided over $120 billion in loan commitments to Latin America and Caribbean countries, primarily in Venezuela, Brazil, Argentina and Ecuador. Some $50-60 billion had been committed to Venezuela for oil extraction and pipelines, some $30 billion to Brazil in the area of energy (oil, power grids) and renewables, $15 billion to Argentina for transport (railways), energy (power grids) and lithium mining, $15 billion to Ecuador for hydro power projects, oil and mining. There are also smaller amounts committed to infrastructure projects in Bolivia, Suriname and Guyana.Till 2019, the loans were from state-owned banks like China Development Bank (CDB), and the Export-Import Bank of china (Ex-Im Bank). But now their lending has fallen sharply and the slack has been taken over by commercial banks like the Industrial and Commercial Bank of China (ICBC) and investment funds. These funds finance the activities of Chinese companies in the region.Oil sector tooSo, more than anything else, the US realises China is outcompeting US companies and finance in the region. The case in point is Venezuela. The US used its domestic laws to sanction Venezuelan oil and in December it seized an oil tanker with nearly $100 million worth of oil, which the US says it will keep for itself. And now it claims to have seized the country itself and says it will run the oil business.Some US oil companies like Chevron are still active in the country, but their operations have shrunk after the US widened its sanctions and targeted oil exports. Sanctions were first imposed in 2015 by the Obama administration over alleged human rights violations. These hit western investment and equipment availability to the country and sharply affected oil production. Chevron and other western companies operate in Venezuela sanction-free under a special US license. Last year, Chevron’s licence was extended but those of companies from other countries, like Spain, were revoked.Trump’s support for the oil industry has been no secret. He has advocated a policy of promoting oil use in the US and was aware that Venezuela offers major opportunities for US companies. Historically, the US was the largest buyer of Venezuelan oil. Now as we noted, China accounts for some 80% of the oil exports.Another area of tension with China is the Panama Canal, which Trump said he wanted to retake. Under pressure, Panama withdrew from BRI and its president avoided the China-Latin America summit last May. In March, a deal was announced for a US company to buy control of container handling ports on the two ends of the canal from a Hong Kong company. But the deal has not happened, and now China has pushed the Hong Kong groups to allow Cosco, it’s the Chinese shipping group to take control.A week ago, a monument to the Chinese community in Panama built in 2004 was demolished. The local authorities claimed that it was a “structural risk” to the public, not explaining just why that was so and why it was done in the night. The President of Panama has since said that it will be reconstructed.Another angle to the Chinese policy in the region has been to get countries in the region to sever diplomatic links with Taiwan. Seven of 12 countries that maintain ties with Taipei are in Latin America and the Caribbean.Within days of the publication of the US NSS calling for Western Hemispheric primacy, China issued a 23-page (English version) policy paper on Latin America and the Caribbean. This was the third such paper, the first published in 2008 and the second in 2016. declaring that the country had always stood “through the thick and thin” with the Global South, “including Latin America and the Caribbean.” The paper took off from Xi’s frequently used formulation that the world was witnessing an acceleration of “changes unseen in a century” which was shifting the international balance of power. It does not take a genius to realise that the Chinese reference was to the relative decline of the United States.But given the American belligerence, Beijing is likely to be cautious. As it is, it has been taken by surprise, like the rest of the world, at the developments in Venezuela. Just hours before the American invasion, Chinese special envoy for Latin America Qiu Xiaoqi met Maduro in Caracas. Beijing has since strongly condemned the American action there as a violation of international law and demanded the release of Maduro.Notwithstanding its rhetoric, Beijing has no intention of confronting the US at this stage and certainly not in the military sphere. However, according to the latest Pentagon report on China, Cuba was the only regional country where Beijing may have considered establishing a military base.The US is likely to press on in its aggressive phase and push for the divestment of the Chinese port companies in Panama. They will, no doubt, use the instability created by their actions to push against other Chinese projects and investments in Latin America.Rubio has already hinted that Cuba could be the next US target. Trump issued a warning to Colombian President Gustavo Petro “to watch his a**” a day after the kidnapping of Maduro. Petro was one of the first critics of the American action, terming it an “assault on the sovereignty” of Latin America. Whether or not the US will also “capture” Greenland as well only time will tell. You can be sure the Europeans are worried, but they are unlikely to do anything if he carries out his threat.The writer is a Distinguished Fellow, Observer Research Foundation, New Delhi.This piece was first published on The India Cable – a premium newsletter from The Wire – and has been updated and republished here. To subscribe to The India Cable, click here.