China just lost two of its most valuable allies — and the damage goes far deeper than diplomacy.
GAI President Peter Schweizer laid out the full strategic cost to Beijing following U.S. operations in Venezuela and Iran. The picture isn’t pretty for China.
For years, Beijing had been purchasing oil from both countries at roughly $15 per barrel below market price — paid in yuan, not dollars, deliberately bypassing the U.S.-dominated financial system. That arrangement is now gone.
“They were big energy suppliers, about 20 to 25% of their energy,” Schweizer told Fox News’ Jesse Watters. “But China was able to buy that energy on the cheap because they were sanctioned companies. They were paying $15 a barrel less than anyone else. And by the way, they weren’t paying in U.S. dollars, but in Chinese currency. And that has been a long-term objective of China to move away from a dollar-based economy.”
The economic hit doesn’t stop there. Schweizer reports that Chinese tech giants Huawei and ZTE have lost tens of billions in expected revenue tied to contracts in Venezuela and Iran — two of their most significant emerging market clients.
“Two of the biggest AI contractors in China are Weiwei and ZTE. These are big telecom infrastructure companies that are vital to China’s AI capabilities. They both have huge contracts in Venezuela and Iran, for which they are now not going to be paid,” Schweizer said.
Then there’s the Taiwan question.
With the U.S. now in effective control of the Strait of Hormuz, Washington holds leverage over nearly half of China’s total oil supply. If Beijing moves on Taiwan, that spigot could close. It’s not a subtle message.
“We have a chokehold on the strait. Look, assume that China wanted to move on Taiwan, right? There’s a military response. But now we have a massive energy response: we simply don’t allow any tankers to ship oil from the Persian Gulf through the Strait of Hormuz. We can do it. It might have been a little bit dicey had we not taken out the Iranians,” Schweizer said. “That’s roughly half of their oil. 40 to 50% of their oil is now suddenly not available to them.”
Perhaps most damaging of all: the military humiliation. Chinese air defense systems failed completely against U.S. and Israeli forces — a catastrophic advertisement for Beijing’s defense exports and military technology brand.
Developing nations watching from the sidelines noticed. China couldn’t protect its allies. That’s the kind of failure that makes smaller countries rethink who they’re betting on.
Schweizer’s conclusion is pointed: the operations didn’t just redraw the map in the Middle East and Western Hemisphere. They quietly — and systematically — dismantled China’s strategic architecture, one pillar at a time.
Watch the clip above.
