Application of the Chinese economic model in Venezuela: is it feasible?

Economy in Venezuela has undergone several transformations in recent decades, from the neoliberal economic reforms implemented by President Carlos Andrés Pérez in 1989 to the current government of Nicolás Maduro.

In recent years, Maduro has demonstrated an affinity for the Chinese economic model and has expressed interest in applying this approach in Venezuela. However, is it really feasible to implement the “Chinese model” in a country like Venezuela?

A complex and constantly evolving model

Currently, the Chinese economic model has been characterized by combining strict political and social control with a gradual economic opening and the participation of the private sector. However, it is important to keep in mind that the “Chinese model” is a simplification of a much more complex reality.

The president of the consulting firm Datanálisis, Luis Vicente León, points out that the Chinese model has evolved from its beginnings as strict communism to a more sophisticated system that combines private and state enterprises, international participation and an important role of the State in research and development.

A planning process absent in Venezuela

One of the key elements of the Chinese model is planning by the State. In China, the State has played a central role in the political direction and process of economic development.

In Venezuela, however, there is no similar reform process. Although special economic zones have been created in Venezuela, political scientist Ricardo Sucre points out that state planning is not a central feature of the Venezuelan model.

While China has used planning to guide the development of its special economic zones, in Venezuela the government is confident that the creation of these zones will automatically attract investment without a clear strategic focus.

Constraints and obstacles in Venezuela

Venezuelan economy faces a number of constraints and obstacles that make it difficult to implement an economic model similar to that of China. Sanctions imposed by the United States have had a significant impact on the Venezuelan economy and have made it difficult to attract foreign investment.

Unlike China, which received large U.S. investments during its opening to the private sector, Venezuela is in a completely different situation.

In addition, Venezuela faces challenges in terms of infrastructure, efficiency and disinvestment. The lack of private participation in the management of electricity, water and road infrastructure has generated critical problems that have not yet been resolved. These limitations make it difficult for Venezuela to reach the level of private sector expansion that China has achieved.

Growth potential in a challenging context

Despite the constraints, some analysts see potential for economic growth in Venezuela. Although the Venezuelan economy has experienced significant contraction in recent years, there is potential to attract investment and achieve growth rates.

The Venezuelan government seeks economic stability as a priority to attract foreign investment and has adopted a more liberal stance compared to the previous government.

Some Venezuelans who took their resources out of the country during the Chávez administration are considering returning and undertaking local projects that contribute to economic growth.

However, it is important to keep in mind that the road to economic recovery will be long and challenging. The Venezuelan economy has suffered a significant contraction and it will take time and effort to overcome infrastructure problems, develop a stable model and resolve the challenges facing the country.

Conclusion

Although the Maduro government has expressed interest in applying the Chinese economic model in Venezuela, there are significant challenges and limitations that hinder its implementation. The Venezuelan economy faces obstacles in terms of sanctions, infrastructure and efficiency that make it difficult to replicate the success of the Chinese model.

Despite this, there is potential for economic growth in Venezuela, but it will take time and effort to overcome the challenges and achieve the desired economic stability.