Last month Ricardo Hausmann, a normally mild Harvard academic, set off the equivalent of a financial bomb. The economist suggested that Venezuela had already defaulted on many of its suppliers, its oil service contractors, and its citizens. So who or what might come next?

When Hausmann suggested Wall Street, the market reaction was huge. Indeed Venezuelan bonds, undercut by the falling oil price, have been dropping ever since. Yet it turns out that Venezuela’s latest default has been, in fact, to China. Given that Beijing is one of Caracas’ closest allies, this is surprising. It is also bullish for Wall Street.

Venezuela has long been a major recipient of Chinese loans, accounting for half of Beijing’s lending to the region. Since 2006, it has taken on $50bn of oil-backed debt. Last year, Rafael Ramirez, the former head of state-oil company PdvSA, revealed that these payments-in kind absorbed over half of Venezuela’s 640,000 barrels per day of oil exports to China. But no more, it seems.