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China’s Growing Influence in Latin America
For more than two decades, China has developed close economic and security ties with many Latin American countries, including Brazil and Venezuela. But Beijing’s growing sway in the region has raised concerns in Washington and beyond.
BY DIANA ROY
China’s role in Latin America and the Caribbean has grown rapidly since the turn of the century, promising economic opportunity but also raising concerns over Beijing’s influence. China’s state firms are major investors in the region’s energy, infrastructure, and space industries, and the country has surpassed the United States as South America’s largest trading partner. Beijing has also expanded its cultural, diplomatic, and military presence throughout the region. Most recently, China celebrated the opening of a new megaport in Peru as part of its global Belt and Road Initiative (BRI).
The United States and its allies, though, fear that Beijing is using these relationships to pursue its geopolitical goals—like the further isolation of Taiwan—and bolster authoritarian regimes such as those in Cuba and Venezuela. U.S. President Joe Biden saw China as a “strategic competitor” in the region, but the reelection of Donald Trump, who has promised a wide array of trade measures, including tariffs on Mexico, could signal a significantly more confrontational approach to China in the Western Hemisphere.
What is China’s history with Latin America?
China’s ties to the region date to the sixteenth century, when the Manila Galleon trade route facilitated the exchange of porcelain, silk, and spices between China and Mexico. By the 1840s, hundreds of thousands of Chinese immigrants were being sent to work as coolies, or indentured servants, in places such as Cuba and Peru, often on sugar plantations or in silver mines. Over the next century, China’s ties to the region were largely migration-related [PDF] as Beijing remained preoccupied with its own domestic upheaval.
Most Latin American countries recognized Mao Zedong’s communist government following U.S. President Richard Nixon’s trip to China in 1972, but it was not until after China’s entry into the World Trade Organization in 2001 that they began to form robust cultural, economic, and political ties. Today, Brazil, Cuba, Paraguay, Peru, and Venezuela are among the Latin American countries with the largest Chinese diaspora communities.
How have economic relations developed?
In 2000, the Chinese market accounted for less than 2 percent of Latin America’s exports, but China’s rapid growth and resulting demand drove the region’s subsequent commodities boom. Over the next eight years, trade grew at an average annual rate of 31 percent [PDF]. By 2021, trade exceeded a record $450 billion, according to the Chinese government, and some economists predict that it could exceed $700 billion by 2035. China currently ranks as South America’s top trading partner and the second largest for Latin America as a whole, after the United States.
Latin American exports to China are mainly soybeans and other vegetables, animal products, copper, petroleum, oil, and other raw materials that the country needs to drive its industrial development. In return, the region mostly imports higher-value-added manufactured products, a trade some experts say has undercut local industries with cheaper Chinese goods. As of 2024, Beijing has signed free trade agreements with Chile, Costa Rica, Ecuador, Nicaragua, and Peru—talks on an agreement with Uruguay have fallen through due to opposition from the Mercosur trade bloc—and twenty-two countries in Latin American and the Caribbean have so far signed on to China’s BRI. Colombia has also announced plans to join the BRI; Brazil decided against it.
Chinese outward foreign direct investment (OFDI) and loans also play a major role in strengthening ties with the region. In 2023, China’s OFDI in Latin America and the Caribbean amounted to close to $9 billion [PDF], or about 6 percent of China’s total OFDI. Meanwhile, the state-owned China Development Bank and the Export-Import Bank of China are among the region’s leading lenders; since 2005, they have loaned more than $120 billion to Latin American and Caribbean governments, often in exchange for oil and used to fund energy and infrastructure projects. Venezuela is by far the biggest borrower; it has received nearly $60 billion worth of Chinese state loans, mostly relating to energy and infrastructure. That is nearly double the amount for the second-largest borrower, Brazil. Additionally, China is a nonborrowing, voting member of the Inter-American Development Bank and the Caribbean Development Bank.
However, these growing economic ties have raised some concerns, particularly among Latin American governments. Although Chinese loans often have fewer conditions attached, dependence on them can push economically unstable countries such as Venezuela into what critics call debt traps that can result in default. Indeed, several Latin American countries are seeking to renegotiate the terms of their debt. Critics also say that Chinese companies bring lower environmental and labor standards and warn that China’s growing control over critical infrastructure such as ports and energy grids poses national security risks. There are also fears of growing economic dependency in countries such as Chile, which sent more than $38 billion worth of exports, about 39 percent of its total, to China in 2022.
What are China’s political interests in the region?
At the forefront is China’s desire to expand its sphere of influence through what it calls “South-South cooperation” [PDF], a development framework focused on aid, investment, and trade. China’s focus on soft power—including strengthening cultural and educational ties—has helped Beijing build political goodwill with local governments and present itself as a viable alternative partner to the United States and Europe.
Since former Chinese President Jiang Zemin’s landmark thirteen-day tour of Latin America in 2001, there have been dozens of high-level political exchanges. President Xi Jinping has visited the region at least five times since he took office in 2013. In return, a record eight presidents from the region visited China in 2023, versus just one in 2022 and none in 2021 and 2020. In addition to several bilateral agreements with countries in the region, China has signed comprehensive strategic partnerships [PDF]—its most common type of diplomatic relationship—with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.
China’s push to isolate Taiwan is another major factor. Because Beijing refuses diplomatic relations with countries that recognize Taiwan’s sovereignty, Latin America’s support for the island has dwindled in recent years. Only Belize, Guatemala, Haiti, and Paraguay still recognize Taiwan, alongside the Caribbean countries of Saint Kitts and Nevis, Saint Lucia, and Saint Vincent and the Grenadines. In 2023, Honduras became the latest to switch diplomatic allegiance to Beijing after Taipei denied the country’s request for billions of dollars of aid. Other recent flips include the Dominican Republic and Nicaragua. That same year, the Central American Parliament voted to expel Taiwan as a permanent observer and replace it with China.
Meanwhile, some observers say growing China-Latin America ties are bolstering authoritarian governments, including those in Cuba, Nicaragua, and Venezuela. China’s role in such countries is that of “an incubator of populism,” says Evan Ellis, a research professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute. “It’s not that China’s trying to produce antidemocratic regimes, but that antidemocratic regimes find a willing partner in the Chinese.”
What security ties do they have?
Chinese government strategy on Latin America, as defined in its 2016 Policy White Paper and others, has underscored the importance of security and defense cooperation. China’s efforts to forge stronger military ties with its Latin American counterparts include arms sales, military exchanges, and training programs.
Venezuela remains the region’s top purchaser of Chinese military hardware after the U.S. government prohibited all commercial arms sales to the country beginning in 2006. Argentina, Bolivia, Ecuador, and Peru have also purchased millions of dollars worth of Chinese military aircraft, ground vehicles, air defense radars, and assault rifles [PDF]. Altogether, China transferred some $634 million worth of major military hardware to those five countries between 2009 and 2019. Likewise, Cuba has sought to strengthen military ties with China, hosting the Chinese People’s Liberation Army for several port visits. U.S. intelligence officials have also raised alarm bells over evidence that China is strengthening its intelligence cooperation with the island. (Russia has also shored up its relations with Cuba in recent years.)
China also participated in the UN peacekeeping mission in Haiti that began in 2004, including by deploying more than one hundred riot police to the country. After less than a decade, China withdrew from Haiti, but it still leads military training exercises across the region and provides supplies to local law enforcement. For example, China provided Bolivian police departments with anti-riot gear and military vehicles during the Evo Morales Ayma 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.
What are other major areas of bilateral cooperation?
Energy. Between 2000 and 2018, China invested $73 billion in Latin America’s raw materials sector, including for the construction of refineries and processing plants in countries with significant amounts of coal, copper, natural gas, oil, and uranium. More recently, Beijing has focused on investing in lithium production in the so-called Lithium Triangle countries of Argentina, Bolivia, and Chile; together, the triad contains roughly half of the world’s known lithium, a critical mineral for electric vehicles and batteries.
Chinese state-owned firms are heavily involved in energy development; PowerChina, for example, has more than fifty ongoing projects across fifteen Latin American countries as of late 2022. But the scale and scope of these efforts are stoking environmental and health worries. China has also taken an interest in the region’s renewable energy sector. The China Development Bank has funded major solar and wind projects, such as Latin America’s largest solar plant in Jujuy, Argentina, and the Punta Sierra wind farm in Coquimbo, Chile.
Health. Many experts say that China’s COVID-19 diplomacy in Latin America was an effort to improve its image and curry favor with regional governments. This included distributing medical equipment such as ventilators and diagnostic test kits, offering billions of dollars in loans for countries to purchase Chinese vaccines, and investing in local vaccine production facilities. Some analysts suspected that China was also using its vaccine leverage to push for the expansion of Huawei, the controversial Chinese telecommunications giant. In Brazil, regulators reversed an earlier decision to bar Huawei from developing the country’s 5G networks weeks after Beijing provided Brasília with millions of vaccine doses.
Infrastructure. Argentina, Brazil, Chile, Ecuador, Peru, and Uruguay are members of the Asian
Infrastructure Investment Bank, where they have some voting power. Beijing has also financed construction projects [PDF] across the region, focusing on airports, highways, ports, and railways. Chinese entities have established varying levels of ownership or control over more than one hundred port projects worldwide, including at least a dozen across Latin America and the Caribbean. In late 2024, China opened a new megaport in Peru, opening doors for more Chinese investment in South America. However, a 2023 report by the UN Committee on Economic, Social and Cultural Rights analyzed the impacts of more than a dozen large-scale, Chinese-led infrastructure projects across the region and found that they have had negative effects on the environment and local Indigenous communities.
Meanwhile, China remains concentrated on building and developing “new infrastructure,” including artificial intelligence, renewable energy, smart cities, and 5G technology from telecom firms such as Huawei. Despite U.S. warnings against using Huawei equipment, which policymakers say leaves countries vulnerable to cyber threats from China, countries in the region are increasingly using it. In 2022, for example, Huawei launched a two-year 5G City pilot project in Curitiba, Brazil, where more than half of 3G and 4G mobile networks in the country run on Huawei equipment, according to company estimates.
Space. Beijing has also sought to strengthen space cooperation with Latin America, beginning when China signed a series of agreements to develop a satellite with Brazil in 1984. In the past few decades, China has regularly made space-related collaboration offers to several Latin American countries, including Venezuela, and in April 2024, it held the first China-Latin American and Caribbean States Space Cooperation Forum. Beijing has also pushed for the creation of the Joint Committee on Space Cooperation within the BRICS alliance, which includes Brazil; the committee, established in 2022, is intended to promote data-sharing between satellites. China’s largest nondomestic space facility is located in Argentina’s Patagonian Desert, and it has satellite ground stations in several other countries, including Bolivia, Brazil, Chile, and Venezuela. Their proximity to the United States has heightened fears that they could be used to spy on U.S. assets.
How has the United States responded?
U.S. policymakers and military officials have raised concerns about China’s growing presence in Latin America even as Washington remains focused elsewhere, especially on major ongoing conflicts in Europe and the Middle East. “We are losing our positional advantage in this Hemisphere and immediate action is needed to reverse this trend,” argued Admiral Craig S. Faller [PDF], the former head of U.S. Southern Command, in 2021. During his first term in office, President Donald Trump took a more hard-line approach than his predecessors by imposing sanctions on several countries, including Cuba, Nicaragua, and Venezuela, and slashed aid to others, most prominent being the so-called Northern Triangle countries in Central America. Some analysts say these actions drove certain governments closer to China. Trump also stepped back from trade relations with the region, withdrawing from the Trans-Pacific Partnership.
President Biden, who took the lead on Latin America policy during his tenure as vice president to Barack Obama, has long argued that the United States should renew its leadership role in the region to counter a rising China. Calling China a “strategic competitor” [PDF] and pledging to strengthen U.S. partnerships in the Western Hemisphere, Biden launched Build Back Better World (B3W) in 2021 with his Group of Seven (G7) counterparts. The initiative aimed to counter China’s BRI by developing infrastructure in low- and middle-income countries, including in Latin America. However, the Biden administration committed only $6 million to B3W in its first year, and it was later renamed the Partnership for Global Infrastructure and Investment. At the 2022 Summit of the Americas, Biden announced a range of new economic initiatives, including the creation of the Americas Partnership for Economic Prosperity, which seeks to make the region more economically competitive.
Additionally, the Biden administration has sought to shore up support for Taiwan and continued to raise concerns about Huawei. Still, some experts say Biden is not focusing enough on the region, particularly on trade. The latest report [PDF] by the U.S.-China Economic and Security Review Commission, an independent agency of the U.S. government, underscored the challenges that Beijing’s growing influence in Latin America poses to Washington.
Meanwhile, bipartisan legislation introduced by then Senator Bob Menendez (D-NJ) and Senator Marco Rubio (R-FL) in 2022 sought to counter China’s “malign influence” in the region by strengthening multilateral security cooperation and counternarcotics efforts. Other legislative proposals include calls for the United States to create permanent trade partnerships with countries in the Western Hemisphere to encourage the “reshoring” of supply chains from China to countries closer to home. Neither bill advanced in Congress.
Rubio is now poised to be Trump’s secretary of state in a second term that many experts expect to ramp up pressure on both China and Latin America. Rubio has been strongly critical of left-wing governments in Cuba, Nicaragua, and Venezuela—and has often criticized China’s presence in the region—while Trump has threatened tariffs on imports from Mexico as a means to pressure the country to tighten its borders. Many experts believe such measures will end up hurting the U.S. economy and ceding some trade to Beijing. Trump’s focus on border control could also spell problems for Latin American countries, as many of them depend on remittances from the United States to boost their economies.
“Few see Latin America as the United States’ backyard anymore,” writes the Wall Street Journal. “The region’s nations are generally sincere in their desire for warm relations with the United States, but they are often seen as a secondary priority in Washington.”
Diana Roy covers Latin America and immigration for CFR.org. She has previously written on hemispheric affairs for the Center for International Policy and the Inter-American Dialogue. She holds a bachelor’s degree in international relations from American University, where she also studied Spanish.
From CFR.org. Reprinted with permission. For more analysis and backgrounders on China and Latin America, visit CFR.org.
