China has established itself as the main trading partner of multiple Latin American countries, such as Brazil and Argentina, and has increased its presence in the region with important projects such as the port of Chancay (Peru), an expansion that has once again brought it new friction with the United States.
This port, inaugurated last year to directly connect South America and China, joins other initiatives such as vehicle factories in Mexico and Brazil, copper or iron mines in Chile, railway projects in Argentina or lithium exploitations in the ‘triangle’ formed by those two countries and Bolivia.
According to the Chinese Ministry of Commerce, the Asian country’s direct investment in Latin America reached $14.71 billion in 2024. Data from the National Autonomous University of Mexico show that, between 2010 and 2019, this influx of capital was almost seven times higher than that of the previous decade, although since the pandemic the pace has slowed.
Already in 2011, Jin Liqun, then president of China Investment Corp (CIC, a sovereign fund with some 1.57 trillion yuan in assets and the task of investing in foreign markets) showed his “optimism” about the growth in Latin America and advanced that they will “increase” their investment in the region, specifically pointing to opportunities in countries such as Brazil, Chile or Colombia.
However, what was initially a search for new markets and fruitful investments is now seen by Washington as a “strategic threat,” according to William Jackson, chief emerging markets economist at the British consultancy Capital Economics.
In a report published this year, the analyst believes that the region could become the setting for a reissue, this time with China as the protagonist, of the ‘Monroe Doctrine’, through which the US sought to reduce European influence on the American continent in the 19th century.
New roadmap
This same month, Beijing published a new official roadmap for Latin America and the Caribbean, the third of its kind since 2008 and a replacement for the 2016 plan, in which it ensures that China and that region share “broad development prospects.”
Specifically, Chinese authorities see opportunities to work together with Latin American countries in sectors such as artificial intelligence, telecommunications, renewable energy, hydrogen, mining or mineral processing.
In addition, the text also mentioned the desire to promote projects in transportation, logistics, housing, electrical energy and urban development under the umbrella of the Chinese New Silk Roads infrastructure project, to which around twenty countries in the region have joined.
Tourism initiatives are also mentioned – for months now, China has exempted visitors from Argentina, Peru or Chile from visas – and an increase in both the use of local currencies in cross-border commercial transactions and dialogue between regulators and central banks.
On that last point, Argentina is also an example of the financial role of China, a key creditor thanks to a currency swap agreement for the equivalent of 18.57 billion dollars, of which a tranche was renewed this year for 5 billion dollars.
A key market
Furthermore, Latin America is being, along with Southeast Asia and Africa, one of the most important alternative markets in which China is supporting its foreign trade in the face of the tariff war with the United States.
Until November, while those destined for the United States fell by 18%, exports to Latin American countries increased almost 8% to the equivalent of about 276 billion dollars, and already represent a figure equivalent to 70% of what the leading world power buys from the Asian giant.
In the last two decades, Jackson highlights, Chinese exports to Latin America have multiplied almost eleven times, mainly for manufactured goods – and also, recently, for electric vehicles in markets such as Brazil -, while in the opposite direction they are now 14 times higher, with prominence for four specific products: iron, copper, soybeans and oil.
The countries with the greatest export exposure to China are Chile, Brazil and Peru, all of them with a share of more than 25% of the Asian giant’s total sales abroad, the report notes.
However, Capital Economics calls for “not to exaggerate China’s role” in trade with Latin America: “The region exports three times more to the US than to China. Much of this is due to Mexico, but even if we remove Mexico from the equation, sales to the US are not far behind those to China.”
Jackson emphasizes this idea: “China does not exercise the hegemony that is often attributed to it in the region. In fact, especially for Mexico and Central America, the US is much more important, and those countries would likely bow to US pressure to limit Chinese investments and reject imports from China.”
With information from EFE.
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