China has significantly deepened its economic, political, and military ties with Latin America over the past two decades, becoming South America’s largest trading partner and a major investor in infrastructure, energy, and finance. While these growing relations present opportunities, they also raise concerns in Washington, particularly regarding China’s strategic influence, economic dependencies, and military partnerships in the region.

China’s deepening presence in Latin America is reshaping regional dynamics, presenting both opportunities and risks for governments navigating relations with Beijing and Washington.

Key Takeaways & Figures

1. Trade and Investment Growth

• Trade Boom:
  • In 2000, China accounted for less than 2% of Latin America’s exports.
  • By 2021, total trade exceeded $450 billion, with projections surpassing $700 billion by 2035.
  • China is now South America’s largest trading partner and the second-largest for Latin America overall, after the U.S.
• Export Trends:
  • Latin America mainly exports raw materials to China, such as soybeans, copper, oil, and animal products.
  • In return, the region imports manufactured goods, leading to concerns about industrial competition.
• Foreign Direct Investment (FDI) & Loans:
  • China’s FDI in Latin America reached $9 billion in 2023, accounting for 6% of China’s total global FDI.
  • Since 2005, Chinese state banks have loaned over $120 billion to Latin America and the Caribbean.
  • Venezuela is the top recipient, with nearly $60 billion in loans, almost twice as much as Brazil, the second-largest borrower.
• Belt and Road Initiative (BRI):
  • 22 Latin American and Caribbean countries have joined BRI, strengthening infrastructure investment.
  • Colombia has announced plans to join, while Brazil opted out.

2. Infrastructure & Energy Control

• Strategic Infrastructure Projects:
  • China has invested $73 billion in Latin America’s natural resources, including coal, oil, uranium, and lithium.
  • In late 2024, China opened a new megaport in Chancay, Peru, solidifying trade routes in South America.
  • More than 100 port projects worldwide involve Chinese ownership, with at least a dozen in Latin America.
• Energy Investments:
  • PowerChina leads over 50 energy projects across 15 Latin American countries.
  • Heavy investment in Argentina, Bolivia, and Chile, which hold 50% of the world’s lithium reserves.
  • China financed Latin America’s largest solar plant (Jujuy, Argentina) and Punta Sierra wind farm (Chile).

3. Military & Security Cooperation

• Growing Arms Sales & Military Presence:
  • Venezuela is the largest buyer of Chinese military hardware in Latin America.
  • Between 2009 and 2019, China transferred $634 million in military equipment to Venezuela, Argentina, Bolivia, Ecuador, and Peru.
  • Cuba has hosted Chinese military visits and intelligence-sharing agreements, raising concerns in Washington.
• Space & Intelligence Concerns:
  • China’s largest foreign space facility is in Argentina’s Patagonian Desert.
  • China has satellite ground stations in Bolivia, Brazil, Chile, and Venezuela, sparking fears of espionage close to U.S. assets.

4. Political & Diplomatic Influence

• High-Level Engagements:
  • Xi Jinping has visited Latin America at least five times since 2013.
  • In 2023, eight Latin American presidents visited China, compared to just one in 2022 and none in 2021 or 2020.
  • China has signed “comprehensive strategic partnerships” with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela, deepening political cooperation.
• Taiwan Diplomacy Shift:
  • Honduras, the Dominican Republic, and Nicaragua switched diplomatic recognition from Taiwan to China in recent years.
  • Only Belize, Guatemala, Haiti, and Paraguay still recognize Taiwan in Latin America.

5. U.S. Response & Strategic Concerns

• Economic & Security Challenges:
  • U.S. officials warn that China’s control over critical infrastructure, energy grids, and ports threatens economic and security interests.
  • The U.S. Southern Command has raised alarms over China’s expanding influence in Latin America.
• U.S. Policy Reactions:
  • Biden launched the Build Back Better World (B3W) initiative to counter BRI, but allocated only $6 million in its first year.
  • Trump’s proposed tariffs on Mexico and more aggressive trade policies could reshape U.S.-China-Latin America relations.

Conclusion

China’s expanding presence in Latin America has redefined trade, investment, and political dynamics in the region. While economic opportunities are growing, concerns over strategic dependencies, military ties, and geopolitical influence remain high. With U.S.-China tensions escalating, Latin American countries must carefully navigate their partnerships to balance economic benefits with long-term stability.