Xi Jinping’s Belt and Road Initiative, the lifeline of his regime amid China’s property collapse and capital outflows, has reached a critical point. The U.S. military’s rapid action in Venezuela exposed China’s predicament: not a debt trap, but a creditor’s trap. This analysis reveals realities ignored by Japan’s old media.

Xi Jinping’s “Belt and Road” has reached a critical juncture.
The year 2026 began with a lightning U.S. military strike against Venezuela, the bridgehead of China’s Belt and Road economic sphere in Latin America, a project personally championed by President Xi Jinping.
With no end in sight to the recession caused by the collapse of China’s property bubble, Xi’s attempt to overcome economic difficulties by absorbing Belt and Road countries now faces a decisive test.

The chart compares the share of new overseas construction contracts awarded to Belt and Road countries with the year-on-year changes in China’s real estate development investment.
Real estate investment had served as the engine of high growth after Xi seized power in the autumn of 2012, but the property bubble began to burst in 2021, stalling the growth model.
From 2022 to the present, the decline has been severe.

Xi’s regime has therefore plunged into accelerating exports and investment toward the Belt and Road sphere.
Investment toward Belt and Road projects, which intensified in 2014, dipped in 2020 but surged again after 2022 under Xi’s directive.
The year-on-year growth in new Belt and Road contracts reached 97% in 2022, 175% in 2023, 102% in 2024, and 120% by November 2025.
As a result, the Belt and Road share of new overseas project contracts soared to 86% in 2023 and exceeded 87% in 2024 and 2025.

China has also sharply increased trade with Belt and Road countries, raising their share of total exports from 30% in 2021 to over 50% in 2025.
Infrastructure projects in Asia, Africa, and Latin America are awarded to Chinese firms, designed, supplied, staffed, and financed by China, with transactions settled in renminbi.
Contracts are denominated in dollars, however, forcing recipient governments to repay debt in dollars.
If repayment becomes impossible, they must cede exclusive usage rights to completed infrastructure such as ports.
This is known as the “debt trap.”

Xi’s regime has been unable to deploy effective stimulus measures against the property slump.
With capital inflows collapsing, the People’s Bank of China remains cautious about purchasing government and local bonds.
Issuing large amounts of renminbi without foreign currency backing would undermine confidence and risk high inflation, prompting Xi to tolerate deflation and avoid aggressive easing.

As foreign currency inflows shrink, export expansion remains the only option, making the Belt and Road the regime’s lifeline.

In Venezuela, Xi’s government began offering oil-for-infrastructure packages after 2012.
Under Maduro, following Chávez’s death, oil price collapses, hyperinflation, and corruption drove some eight million citizens abroad.
In August 2025, China’s private oil firm CCRC signed a deal exceeding $1 billion to develop oil fields, targeting 60,000 barrels per day by end-2026.
On January 2 this year, a Chinese envoy met Maduro in Caracas to resume cooperation, and hours later the U.S. military struck.

China holds roughly $60 billion in claims on Venezuela, including $19 billion in oil loans.
Oil imports are intended to recover these claims.
The Trump administration aims to seize China’s economic interests, force China to buy Venezuelan oil at high prices, and use the proceeds to rebuild Venezuela.
Xi’s regime cannot refuse, falling not into a “debt trap” but a “creditor’s trap.”