China’s burgeoning engagement with Latin America and the Caribbean has dramatically reshaped the global economic landscape since the dawn of the 21st century. This intensifying relationship, while promising substantial economic opportunities for the region, has simultaneously sparked considerable debate and apprehension regarding Beijing’s expanding sphere of influence. Chinese state-backed enterprises have become pivotal investors across Latin America’s crucial sectors, including energy, infrastructure development, and even aerospace technologies. Notably, China has eclipsed the United States to become South America’s foremost trading partner, marking a significant shift in regional economic dynamics. This growing economic footprint is further accompanied by an expanding Chinese presence in cultural, diplomatic, and military domains throughout the region. A recent high-profile event highlighting this deepening partnership was the inauguration of a massive new port in Peru, a key component of China’s ambitious Belt and Road Initiative (BRI).
However, the United States and its allies are increasingly wary of China’s strategic objectives behind these deepening ties. Concerns are mounting that Beijing might be leveraging its economic partnerships to advance geopolitical goals, such as isolating Taiwan on the international stage and providing support to authoritarian regimes in countries like Cuba and Venezuela. While U.S. President Joe Biden has characterized China as a “strategic competitor” in the region, the potential return of Donald Trump to the presidency, with his stated intention to implement aggressive trade measures, including tariffs on Mexico, could herald a considerably more confrontational U.S. approach to China’s growing influence in the Western Hemisphere.
A Historical Perspective on China-Latin America Relations
To understand the current dynamics, it’s crucial to examine the historical roots of China-Latin America relations. Surprisingly, connections trace back to the 16th century through the Manila Galleon trade route. This trans-Pacific route facilitated the exchange of coveted Chinese goods like porcelain and silk, alongside spices, for silver from Mexico, establishing early trade links across vast distances. By the mid-1800s, a significant wave of Chinese immigration began, albeit often under harsh conditions. Hundreds of thousands of Chinese migrants were brought to Latin America as “coolies,” essentially indentured laborers, working in grueling conditions in Cuba and Peru, particularly in sugar plantations and silver mines. For the subsequent century, China’s engagement with Latin America remained largely centered around migration, as China itself grappled with internal instability and upheaval, limiting its capacity for broader international engagement.
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A pivotal shift occurred after U.S. President Richard Nixon’s historic visit to China in 1972. Following this diplomatic thaw, most Latin American nations formally recognized Mao Zedong’s communist government. However, it was China’s accession to the World Trade Organization (WTO) in 2001 that truly catalyzed a new era of robust cultural, economic, and political relationship-building. Presently, countries such as Brazil, Cuba, Paraguay, Peru, and Venezuela host the largest Chinese diaspora communities within Latin America, reflecting the long-standing migration ties and evolving contemporary connections.
The Evolution of Economic Partnerships: Trade and Investment
The economic dimension of China-Latin America relations has experienced explosive growth in recent decades. In the year 2000, the Chinese market represented a minor destination, accounting for less than 2% of Latin America’s total exports. However, China’s rapid economic ascent and its insatiable demand for raw materials became a major catalyst for the region’s subsequent commodities boom. Over the ensuing eight years, bilateral trade expanded at an astonishing average annual rate of 31%. By 2021, trade volumes had surged to exceed a record $450 billion, according to official Chinese government figures, and projections from economists suggest this figure could potentially surpass $700 billion by 2035. Currently, China stands as South America’s leading trade partner and ranks as the second-largest for Latin America overall, trailing only the United States in total trade volume with the region.
Latin America’s export basket to China is heavily concentrated in commodities. Key exports include soybeans and other agricultural products, animal-derived goods, copper and other metals, crude oil and refined petroleum products, and a range of other raw materials vital to fueling China’s vast industrial engine. Conversely, Latin American imports from China are predominantly higher value-added manufactured goods. This trade dynamic, while lucrative for commodity exporters, has also raised concerns among some experts who argue that the influx of cheaper Chinese manufactured goods has undercut the competitiveness of local industries within Latin America. As of 2024, China has formalized its trade relationships through free trade agreements (FTAs) with Chile, Costa Rica, Ecuador, Nicaragua, and Peru. Negotiations for a similar agreement with Uruguay have stalled, primarily due to resistance from within the Mercosur trade bloc. Furthermore, twenty-two nations across Latin America and the Caribbean have, to date, joined China’s Belt and Road Initiative (BRI), signaling deeper infrastructure and investment cooperation. Colombia has also publicly announced its intention to join the BRI, while Brazil has notably opted out.
Chinese outward foreign direct investment (OFDI) and loans constitute another critical pillar in strengthening economic ties. In 2023, China’s OFDI into Latin America and the Caribbean reached nearly $9 billion, representing approximately 6% of China’s total global OFDI. Significantly, China’s state-owned financial institutions, notably the China Development Bank and the Export-Import Bank of China, have emerged as leading lenders to the region. Since 2005, these banks have extended over $120 billion in loans to Latin American and Caribbean governments. These loans are often collateralized against future commodity supplies, particularly oil, and are primarily directed towards financing large-scale energy and infrastructure projects. Venezuela stands out as the largest recipient of Chinese state loans by a significant margin, having received nearly $60 billion, predominantly earmarked for energy and infrastructure development. This figure is almost double the loan amount for Brazil, the second-largest borrower. Adding another layer to its financial engagement, China is a non-borrowing, voting member of both the Inter-American Development Bank and the Caribbean Development Bank.
Dive Deeper: China’s Belt and Road: Implications for the U.S.
However, the deepening economic interdependence has also generated anxieties, particularly among Latin American governments themselves. While Chinese loans are often perceived as attractive due to their comparatively fewer conditionalities compared to Western lending, over-reliance on Chinese credit can potentially lead economically vulnerable nations, such as Venezuela, into what critics term “debt traps,” increasing the risk of sovereign default. Indeed, several Latin American countries are actively seeking to renegotiate the terms of their existing Chinese debt. Furthermore, critics raise concerns about potentially lower environmental and labor standards associated with some Chinese companies operating in the region. There are also growing national security concerns related to China’s increasing control over strategically important infrastructure assets, including ports and energy grids. Economic dependency is another worry, particularly for countries like Chile, which in 2022 sent over $38 billion worth of exports to China, representing approximately 39% of its total export revenue.
China’s Political Interests and Diplomatic Engagement
China’s political objectives in Latin America are multifaceted, with a central aim of expanding its global influence through what it frames as “South-South cooperation.” This development paradigm emphasizes mutual benefit through aid, investment, and trade partnerships with developing nations. China’s strategic deployment of soft power, encompassing the strengthening of cultural and educational exchanges, has been instrumental in cultivating political goodwill among Latin American governments. This approach allows Beijing to present itself as a viable and attractive alternative partner to traditional powers like the United States and Europe.
Since former Chinese President Jiang Zemin’s landmark thirteen-day tour of Latin America in 2001, high-level political interactions have become increasingly frequent. President Xi Jinping himself has visited the region at least five times since assuming office in 2013. Reflecting the deepening ties, a record number of eight presidents from Latin American nations visited China in 2023, a significant increase compared to just one in 2022 and none in the preceding two years. Beyond bilateral engagements, China has established “comprehensive strategic partnerships”—its highest level of diplomatic relationship—with numerous key countries in the region, including Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.
A significant political objective for China is to further isolate Taiwan diplomatically. Beijing’s long-standing policy of refusing diplomatic relations with countries that recognize Taiwan’s sovereignty has been effective in eroding Taiwan’s diplomatic space in Latin America. Only Belize, Guatemala, Haiti, and Paraguay currently maintain formal diplomatic recognition of Taiwan within Latin America, along with the Caribbean nations of Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. In 2023, Honduras became the latest country in the region to switch diplomatic allegiance from Taipei to Beijing, following similar moves by the Dominican Republic and Nicaragua in recent years. Adding to Taiwan’s diplomatic setbacks, the Central American Parliament voted in 2023 to expel Taiwan as a permanent observer, replacing it with China.
Furthermore, some observers argue that growing China-Latin America ties inadvertently bolster authoritarian tendencies in certain countries, including Cuba, Nicaragua, and Venezuela. According to Evan Ellis, a research professor at the U.S. Army War College Strategic Studies Institute, China’s role in these contexts is akin to “an incubator of populism.” He argues, “It’s not that China’s trying to produce antidemocratic regimes, but that antidemocratic regimes find a willing partner in the Chinese.”
Security and Military Cooperation
China’s strategic approach to Latin America, as articulated in its 2016 Policy White Paper and subsequent policy documents, explicitly highlights the importance of security and defense cooperation. China is actively pursuing stronger military ties with Latin American countries through various means, including arms sales, military personnel exchanges, and joint training programs.
Venezuela has emerged as the region’s largest purchaser of Chinese military equipment, a trend that accelerated after the U.S. government imposed a ban on commercial arms sales to Venezuela in 2006. Beyond Venezuela, countries like Argentina, Bolivia, Ecuador, and Peru have also acquired Chinese military hardware, including aircraft, ground vehicles, air defense radar systems, and assault rifles. Between 2009 and 2019, China’s arms transfers to these five Latin American nations totaled approximately $634 million. Cuba, a long-time U.S. adversary, has also sought to deepen military cooperation with China, hosting visits by the Chinese People’s Liberation Army at Cuban ports. U.S. intelligence agencies have expressed increasing concern over evidence suggesting that China is enhancing its intelligence cooperation with Cuba. (Russia has also been actively strengthening its relations with Cuba in recent years, adding another layer of geopolitical complexity).
China also participated in the UN peacekeeping mission in Haiti initiated in 2004, even deploying over one hundred riot police personnel to the country. Although China withdrew from the Haiti peacekeeping mission after nearly a decade, it continues to conduct military training exercises across Latin America and provides security-related equipment and training to local law enforcement agencies. For instance, China supplied Bolivian police forces with anti-riot gear and vehicles during the Evo Morales administration, donated transportation equipment and motorcycles to police forces in Guyana and Trinidad and Tobago, and provided Ecuador with tens of thousands of automatic weapons.
Expanding Areas of Bilateral Cooperation
Beyond trade, investment, and security, China-Latin America cooperation extends to diverse sectors:
Energy: Between 2000 and 2018, Chinese investments in Latin America’s raw materials sector totaled a substantial $73 billion. These investments have supported the development of refineries and processing plants in resource-rich countries with significant reserves of coal, copper, natural gas, oil, and uranium. More recently, Beijing has strategically focused on investing in lithium production within the “Lithium Triangle” countries of Argentina, Bolivia, and Chile. This region collectively holds approximately half of the world’s known lithium reserves, a critical mineral for the burgeoning electric vehicle and battery industries.
Chinese state-owned enterprises play a dominant role in energy sector development. PowerChina, for example, had over fifty ongoing projects across fifteen Latin American countries as of late 2022. However, the scale and pace of these energy projects have raised environmental and health concerns in some quarters. China has also demonstrated growing interest in Latin America’s renewable energy sector. The China Development Bank has financed major solar and wind energy projects, including Latin America’s largest solar power plant in Jujuy, Argentina, and the Punta Sierra wind farm in Coquimbo, Chile.
Health: Many observers view China’s “COVID-19 diplomacy” in Latin America as a strategic initiative to improve its public image and gain favor with regional governments. This included large-scale donations of medical equipment, such as ventilators and COVID-19 test kits, offering billions of dollars in loans to facilitate the purchase of Chinese-produced vaccines, and investments in local vaccine manufacturing facilities. Some analysts speculated that China might have also used its vaccine diplomacy to advance the market penetration of Huawei, the controversial Chinese telecommunications giant. In Brazil, for example, regulators reversed a prior decision to exclude Huawei from developing the country’s 5G networks just weeks after Beijing provided Brazil with millions of vaccine doses.
Infrastructure: Argentina, Brazil, Chile, Ecuador, Peru, and Uruguay are all members of the Asian Infrastructure Investment Bank (AIIB), where they hold voting rights. Beijing has financed numerous infrastructure construction projects across the region, with a focus on airports, highways, ports, and railway networks. Chinese entities have acquired varying degrees of ownership or operational control over more than one hundred port projects globally, including at least a dozen in Latin America and the Caribbean. In late 2024, China inaugurated a major new megaport in Peru, further enhancing trade and investment access to South America. However, a 2023 report by the UN Committee on Economic, Social and Cultural Rights analyzed the impacts of over a dozen large-scale, Chinese-led infrastructure projects in the region and identified negative consequences for the environment and local Indigenous communities.
China is also heavily invested in developing “new infrastructure” in Latin America, encompassing artificial intelligence, renewable energy technologies, smart city initiatives, and 5G technology deployment through companies like Huawei. Despite warnings from the United States regarding potential cybersecurity risks associated with Huawei equipment, several countries in the region are increasingly adopting Huawei’s technology. In 2022, Huawei launched a two-year 5G City pilot project in Curitiba, Brazil, a country where Huawei estimates that over half of the existing 3G and 4G mobile networks already rely on Huawei equipment.
Space: China has actively pursued space cooperation with Latin American nations, dating back to a satellite development agreement with Brazil in 1984. Over the past few decades, China has consistently offered space-related collaboration opportunities to various Latin American countries, including Venezuela. In April 2024, China hosted the inaugural China-Latin American and Caribbean States Space Cooperation Forum. Beijing has also advocated for the establishment of a Joint Committee on Space Cooperation within the BRICS alliance, which includes Brazil. This committee, formed in 2022, aims to facilitate data-sharing among member countries’ satellite programs. China’s largest space facility outside of its own territory is located in Argentina’s Patagonia region, and it operates satellite ground stations in several other Latin American countries, including Bolivia, Brazil, Chile, and Venezuela. The proximity of these facilities to the United States has raised concerns about their potential use for intelligence gathering directed at U.S. assets.
The United States’ Response and Shifting Dynamics
U.S. policymakers and military leaders have voiced growing apprehension regarding China’s expanding presence in Latin America, even as Washington’s strategic focus remains heavily weighted towards other global regions, particularly the ongoing conflicts in Europe and the Middle East. Admiral Craig S. Faller, former head of U.S. Southern Command, argued in 2021 that “We are losing our positional advantage in this Hemisphere and immediate action is needed to reverse this trend.” During his presidency, Donald Trump adopted a more assertive stance compared to his predecessors, imposing sanctions on countries including Cuba, Nicaragua, and Venezuela, and significantly reducing aid to others, most notably the Northern Triangle countries of Central America. Some analysts contend that these policies inadvertently pushed certain Latin American governments closer to China. Trump also retreated from regional trade engagement, withdrawing the United States from the Trans-Pacific Partnership trade agreement.
President Biden, who played a leading role in Latin America policy during his vice presidency under Barack Obama, has emphasized the need for the United States to reassert its leadership in the region to counter China’s growing influence. Characterizing China as a “strategic competitor” and pledging to strengthen U.S. partnerships in the Western Hemisphere, Biden launched the Build Back Better World (B3W) initiative in 2021 in collaboration with G7 partners. B3W was intended to provide a counter to China’s BRI by investing in infrastructure development in low- and middle-income countries, including those in Latin America. However, the Biden administration initially committed a relatively modest $6 million to B3W in its first year, and the initiative was subsequently rebranded as the Partnership for Global Infrastructure and Investment. At the 2022 Summit of the Americas, President Biden announced a series of new economic initiatives, including the Americas Partnership for Economic Prosperity, aimed at enhancing the region’s economic competitiveness.
Furthermore, the Biden administration has continued to advocate for Taiwan’s international standing and has consistently raised concerns about the security risks associated with Huawei’s technology. Despite these efforts, some experts argue that the Biden administration is not dedicating sufficient attention to Latin America, particularly in the realm of trade policy. A recent report by the U.S.-China Economic and Security Review Commission highlighted the significant challenges posed by Beijing’s growing influence in Latin America for Washington’s strategic interests.
In the U.S. Congress, bipartisan legislative efforts have emerged to address China’s growing influence. Legislation introduced by then Senator Bob Menendez and Senator Marco Rubio in 2022 sought to counter China’s “malign influence” in the region by bolstering multilateral security cooperation and counternarcotics initiatives. Other legislative proposals have called for the United States to establish permanent trade partnerships with Western Hemisphere nations to incentivize the “reshoring” of supply chains away from China to countries closer to the U.S. However, neither of these legislative initiatives ultimately advanced through Congress.
With Marco Rubio potentially positioned to become Secretary of State in a second Trump administration, many analysts anticipate a significant intensification of pressure on both China and Latin America. Rubio has been a vocal critic of left-leaning governments in Cuba, Nicaragua, and Venezuela and has frequently criticized China’s growing presence in the region. Trump has also threatened tariffs on imports from Mexico as a means to pressure Mexico on border security. Many economists warn that such measures could harm the U.S. economy and potentially cede further trade opportunities to Beijing. Trump’s focus on border control could also negatively impact Latin American economies that heavily rely on remittances from the United States.
As the Wall Street Journal observed, “Few see Latin America as the United States’ backyard anymore.” While Latin American nations generally express a desire for positive relations with the United States, they often perceive the region as a “secondary priority” in Washington’s foreign policy calculus. This evolving perception creates both challenges and opportunities as Latin America navigates its relationships with both the United States and China in a rapidly changing global landscape.
