September 18, 2018
China’s Engagement with Latin America and the Caribbean
As the People’s Republic of China (PRC) has increased its
and cooperation with Latin American and Caribbean
engagement with Latin America and the Caribbean over the
countries” but also emphasizes that China “does not target
past 15 years, U.S. policymakers have raised questions
or exclude any third party.”
regarding potential implications for U.S. interests in the
region. China’s engagement with the region has grown
According to some sources, PRC defense sales and
significantly since 2001, particularly in terms of diplomatic
assistance to the region have expanded from small arms to
and economic ties. This growth reflects China’s increasing
advanced weapons systems. They include military
global “soft power” efforts worldwide. A succession of
exchanges with various countries, military helicopters and
Chinese leaders and other officials have visited the region
vehicles to Bolivia, rifles and patrol boats to Ecuador,
to court governments, and in turn regional leaders and
rocket launch vehicles to Peru, and fighter aircraft and
officials have been frequent visitors to China. The PRC has
armored personnel carriers to Venezuela. Some PRC
signed a variety of bilateral partnership agreements with
military equipment, however, reportedly suffers from poor
several countries in the region, including “strategic
quality and aftermarket support.
partnerships” with Argentina, Brazil, Chile, Costa Rica,
Ecuador, Mexico, Peru, and Venezuela.
Another apparent goal of Beijing in the region is to isolate
Taiwan by attempting to lure away Latin American and
Diplomacy and Policy
Caribbean countries that still maintain diplomatic relations
Beijing’s diplomatic overtures in Latin America underpin
with Taiwan. At this juncture, 9 countries in the region (out
China’s economic activities and help it to institutionalize its
of 17 countries worldwide) recognize Taiwan, also known
engagement in the region and garner support in
as the “Republic of China,” while the remaining 24
international fora. Some analysts argue that China’s
countries in the region recognize the PRC. Although
activities in the region reflect a global strategy to reduce
tensions between China and Taiwan over so-called
U.S. dominance, although they do not aim to challenge the
“checkbook diplomacy” had been waning for about a
United States directly or militarily. China’s diplomatic
decade, in 2017 and 2018, Panama, the Dominican
efforts include being an observer at the Organization of
Republic, and El Salvador switched recognition to China.
American States, a member of the Inter-American
Development Bank and the Caribbean Development Bank,
Economic Relations
and an active participant in the Asia Pacific Economic
China’s economic goals in the region include securing
Cooperation forum. PRC President Xi Jinping and Premier
access to raw materials (such as oil and various ores and
Li Keqiang have made four trips to Latin America since
minerals) and agricultural goods (especially soybeans);
2013, visiting 11 countries.
establishing new markets for Chinese goods, including high
value-added products; and partnering with Latin American
President Xi participated in a January 2015 forum in
firms to access and develop technology. China also has
Beijing with leaders and foreign ministers of the
sought to secure investment opportunities in Latin America
Community of Latin American and Caribbean States
for its infrastructure firms and to reduce excess capacity in
(CELAC), a region-wide organization that excludes the
steel, cement, and other related commodities.
United States and Canada. At the forum, China and CELAC
countries agreed to a five-year cooperation plan covering
Total China-Latin America trade increased from $17 billion
politics, security, trade, investment, finance, infrastructure,
in 2002 to almost $262 billion in 2014 and was valued at
energy, resources, industry, agriculture, science, and
$257 billion in 2017. In 2015, PRC President Xi set a goal
people-to-people exchanges. At a second China-CELAC
of total China-Latin America trade reaching $500 billion in
ministerial held in January 2018, both sides agreed to an
10 years. China’s imports from Latin America and the
updated cooperation plan extending through 2021 and
Caribbean amounted to about $126 billion in 2017,
China invited Latin American countries to participate in its
accounting for 7% of China’s overall imports; China’s
Belt and Road Initiative, which is focused on infrastructure
exports to the region amounted to $131 billion, accounting
development in various regions around the world.
for 5.7% of China’s total exports. China has become the top
trading partner of Brazil, Chile, Peru, and Uruguay. Major
A 2016 PRC policy paper on Latin America and the
Chinese imports from the region in 2017 were primarily
Caribbean stated that China seeks to strengthen cooperation
natural resources, including ores (31%), soybeans (19%),
on the basis of “equality and mutual benefit” in several key
petroleum (16%), and copper (9%). Major PRC exports to
areas, including exchanges and dialogues, trade and
Latin America included electrical machinery and equipment
investment, agriculture, energy, infrastructure,
(21%); machinery and mechanical appliances (15%); motor
manufacturing, and technological innovation. The paper
vehicles and parts (6%); and a wide array of industrial and
states that China will “actively carry out military exchanges
consumer products.
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link to page 2 link to page 2 China’s Engagement with Latin America and the Caribbean
In the aftermath of U.S. withdrawal from the proposed
labor and environmental standards. From 2006 to 2015, the
Trans-Pacific Partnership (TPP) free trade agreement in
United States and China held seven bilateral consultations
January 2017, China participated in a meeting with the
on Latin America.
remaining 11 TPP signatories (including Chile, Mexico,
and Peru) regarding future trade integration in the Asia
In contrast, the Trump Administration has viewed China’s
Pacific region. Although the remaining TPP signatories
engagement in Latin America with more suspicion. Its 2017
have concluded their own trade agreement without the
National Security Strategy states that “China seeks to pull
United States, all three Latin American signatories to the
the region into its orbit through state-led investments and
TPP also have expressed interest in moving forward with
loans” and expresses concern about China’s support for
further trade integration with China.
“the dictatorship in Venezuela.” The U.S. Southern
Command’s 2018 posture statement expresses concern that
Chinese cumulative foreign direct investment (FDI) in
China’s economic engagement enables it to expand its
Latin America and the Caribbean reached around $200
influence over key U.S. regional partners and promote
billion in 2017 (including territories with large offshore
unfair labor practices, and that China’s space and
financial sectors), according to PRC figures. The region has
telecommunications ventures in the region create U.S.
become the second-largest destination for Chinese FDI,
commercial and security vulnerabilities. More recently,
more than half in natural resources. AidData, a research
following El Salvador’s decision to switch diplomatic
consortium, estimated that from 2000 to 2014, China
relations from Taiwan to China in August 2018, the White
provided Latin America and the Caribbean with $53 billion
House issued a statement asserting that it would reevaluate
in development loans and other assistance, making it the
U.S. relations with the Salvadoran government. Along these
third-largest regional recipient of such assistance from
lines, some Members have called for cuts in U.S. assistance
China, after Africa and Central and Eastern Europe.
to those countries switching their diplomatic recognition to
Taiwan. S. 3406 would authorize the Secretary of State to
Chinese banks (China Development Bank and China
consider modifying the U.S. diplomatic presence or
Export-Import Bank) have become the largest lenders in
adjusting U.S. foreign aid for those countries that
Latin America. Accumulated lending has surpassed $150
downgrade relations with Taiwan.
billion (2005-2017); Venezuela, Brazil, Ecuador, and
Argentina are the top recipients of that funding (see Table
U.S. warnings about China have been met with skepticism
1). For Venezuela and Ecuador, much of the financing has
in the region, with some countries calling on the United
been provided through loans-for-oil deals. In recent years,
States to respect their sovereign decisions. Some analysts
China’s banks provided more financing to the region than
contend that China’s primary interest and influence in the
was provided by the World Bank and the Inter-American
region remain largely economic, and that the possibility of
Development Bank combined. A significant amount of the
the PRC creating a sphere of influence in Latin America
lending has been for infrastructure projects, as well as for
remains small. Despite some affinity between Beijing and
oil and gas and mining projects. Such loans typically have
some authoritarian Latin American governments and some
less stringent terms, do not impose policy conditions, and
general support in the region for China’s role as a
have less rigorous environmental guidelines compared to
counterweight to U.S. power, some argue that China’s
the loans of major international financial institutions.
appeal is limited due to deep political, social, and cultural
differences and language barriers. Some observers argue
Table 1. China: Financing in Latin America, 2005-2017
that recent U.S. disengagement in the region, marked by
such actions as withdrawal from the TPP and efforts to
Country
Amount (U.S. billions)
reduce U.S. foreign aid, coupled with growing U.S. trade
Venezuela
$62.2
frictions with China and some Latin American countries,
Brazil
$42.1
may encourage greater PRC-Latin American cooperation.
Argentina
$18.2
Ecuador
$17.4
Some analysts have expressed concerns about the potential
Bolivia
$3.5
harmful effects of China’s economic engagement on Latin
America’s development. They
Trinidad and Tobago
$2.6
maintain that some countries
Jamaica
$2.1
have amassed unsustainable levels of debt owed to the PRC
Mexico
$1.0
and that their economies risk becoming less competitive in
Other Countries
$1.3
manufacturing and agricultural technologies and more
Total
$150.4
dependent upon commodities exports to China and
elsewhere. Some argue that PRC support extends a lifeline
Source: Gallagher, Kevin P. and Margaret Myers, “China-Latin
to leaders with poor records of governance and can
America Finance Database,” Inter-American Dialogue, 2017.
exacerbate corruption. Furthermore, although some Chinese
companies have improved their conduct in the region, many
U.S. Policy Concerns and Considerations still do not adhere to international environmental, labor, and
Under the George W. Bush and Obama Administrations,
safety standards.
U.S. officials, while recognizing concerns about China’s
influence, generally viewed China’s engagement positively
as a contributor to the region’s economic growth. The
Mark P. Sullivan, Specialist in Latin American Affairs
Thomas Lum, Specialist in Asian Affairs
overarching goal of U.S. policy was for China to contribute
economically to the region in a transparent fashion,
IF10982
following international rules and complying with local
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China’s Engagement with Latin America and the Caribbean


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