Updated December 14, 2021
China’s Engagement with Latin America and the Caribbean
As the People’s Republic of China (PRC) has increased its
manufacturing, and technological innovation. It noted that
engagement with Latin America and the Caribbean (LAC)
China will “actively carry out military exchanges and
over the past 20 years, U.S. policymakers have raised
cooperation” with countries in LAC but emphasizes that
questions regarding potential implications for U.S. interests
China “does not target or exclude any third party.”
in the region. China’s engagement with the region has
grown significantly since 2001, particularly in terms of
Another of Beijing’s apparent goals in LAC is to isolate
diplomatic and economic ties. This growth reflects China’s
Taiwan by attempting to lure away Latin American and
global “soft power” efforts and “influence operations”
Caribbean countries that maintain diplomatic relations with
worldwide. A succession of Chinese leaders and other
Taiwan, also known as the “Republic of China.” Currently,
officials have visited the region to court governments. In
eight countries in LAC (out of 14 countries worldwide,
turn, regional leaders and officials have frequently visited
including the Vatican) recognize Taiwan; the remaining 25
China. The PRC has signed various bilateral partnership
countries recognize the PRC. Panama, the Dominican
agreements with countries throughout LAC, including
Republic, and El Salvador switched recognition to the PRC
“comprehensive strategic partnerships” with Argentina,
in 2017-2018, and Nicaragua switched on December 9,
Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.
2021. In Honduras, President-elect Xiamara Castro pledged
to establish relations with the PRC but her transition team
Diplomacy
maintains that her government will maintain relations with
Beijing’s diplomatic overtures in LAC underpin China’s
Taiwan.
economic activities and help institutionalize China’s
engagement in the region and garner support in
Economic Relations
international fora. Some analysts argue that China’s
China’s economic goals in LAC include securing access to
activities in LAC reflect a global strategy to reduce U.S.
raw materials (such as oil, ores, and minerals) and
dominance, although the activities do not aim to challenge
agricultural goods (especially soybeans); establishing new
the United States directly or militarily. China’s diplomatic
markets for Chinese goods, including high value-added
efforts include being an observer at the Organization of
products; and partnering with LAC firms to access and
American States, a member of the Inter-American
develop technology. China also has sought investment
Development Bank (IDB) and the Caribbean Development
opportunities in Latin America for its infrastructure firms.
Bank, and a participant in the Asia Pacific Economic
Cooperation forum. China has sold Coronavirus Disease
Total China-LAC trade increased from almost $18 billion in
2019 vaccines and has provided medical assistance and
2002 to almost $316 billion in 2019. In 2020, despite the
loans to pay for vaccines to about a dozen countries in
decline in world trade due to the pandemic, China’s total
LAC. China and the United States are the leading suppliers
trade with the region dipped only slightly, to $315 billion.
of vaccines to the region, according to Wilson Center data.
In 2020, China’s imports from LAC amounted to $165
billion, consisting primarily of natural resources, including
Since 2015, PRC President Xi Jinping has participated in
ores (35%), soybeans (17%), mineral fuels (12%), meat
three summits with leaders and foreign ministers of the
(7%), and copper (6%). China’s exports to the region in
Community of Latin American and Caribbean States
2020 amounted to $150 billion, with major exports
(CELAC), a region-wide organization that excludes the
including electrical machinery and equipment (23%),
United States and Canada. Xi addressed the Third China-
machinery and mechanical appliances (16%), and motor
CELAC Ministerial in December 2021 via video message.
vehicles and parts (6%). China has become the top trading
The meetings have promulgated “cooperation plans”
partner of Brazil, Chile, Peru, and Uruguay and the second-
covering politics, security, trade, investment, finance,
largest trading partner for many other countries. China has
infrastructure, energy, resources, industry, agriculture,
free-trade agreements with Chile, Costa Rica, and Peru.
science, and people-to-people exchanges. At the 2018
summit, China invited countries in LAC to participate in its
According to the China Global Investment Tracker database
Belt and Road Initiative (BRI), which focuses on PRC-
maintained by the American Enterprise Institute
backed infrastructure development around the world. At
(https://www.aei.org/china-global-investment-tracker/),
least 19 countries in LAC participate in the BRI.
which tracks transactions of $100 million or more, China’s
investments in LAC from 2005 to mid-2021 amounted to
In 2016, the PRC government released its second policy
$133 billion, with Brazil accounting for $61 billion and
paper on LAC. The paper stated China seeks to strengthen
Peru $25 billion. Energy projects accounted for 60% of
cooperation on the basis of “equality and mutual benefit” in
investments; metals/mining accounted for 25%. The
several key areas, including exchanges and dialogues, trade
database also shows China’s construction projects in LAC
and investment, agriculture, energy, infrastructure,
from 2005 to mid-2021 were valued at $63 billion, with
https://crsreports.congress.gov
link to page 2 
China’s Engagement with Latin America and the Caribbean
energy projects accounting for 51% and transportation
income countries. Latin America is to be featured in the
accounting for 28%.
initiative, which is expected to launch in 2022.
Chinese banks (China Development Bank and China
The U.S. Southern Command (SOUTHCOM) has
Export-Import Bank) became large lenders in LAC more
expressed strong concerns about China’s activities in LAC.
than a decade ago, although amounts have declined in
Its 2021 posture statement states that China continues to
recent years and there were no such development loans in
increase its activities across all domains in the region:
2020. Accumulated loans amounted to over $137 billion
cyber, space, extractive and energy industries,
from 2005 to 2020, with Venezuela, Brazil, Ecuador, and
transportation hubs, roads, infrastructure,
Argentina the top recipients, according to the China-Latin
telecommunications, legal and illegal fishing, agriculture,
America Finance Database hosted by the Inter-American
and military training. SOUTHCOM contends that China
Dialogue (see Figure 1). A majority of the lending (68%)
donates security supplies and equipment to gain access and
has been for energy projects, and 18% has been for
win favor with regional security forces and uses medical
infrastructure projects. Such loans typically lack policy
diplomacy to its advantage as leverage. It also warns the
conditions and have less stringent terms and less rigorous
PRC is “seeking to establish global logistics and basing
environmental guidelines compared with the loans of major
infrastructure in our hemisphere in order to project and
international financial institutions.
sustain military power at greater distances.”
Figure 1. China: Financing in LAC, 2005-2020
In recent years, U.S. warnings about China have been met
with some skepticism in LAC and among some regional
experts. Some analysts contend that China’s primary
interests and influence in the region remain largely
economic and diplomatic and that the possibility of the
PRC creating a military sphere of influence in Latin
America remains small. Some argue that China’s appeal is
limited due to deep political, social, and cultural differences
and language barriers. Nevertheless, some analysts have
expressed concerns about the potential harmful effects of
China’s economic engagement on LAC’s development,
including that many Chinese companies do not adhere to
Source: Created by CRS with data from Kevin P. Gal agher and
international environmental, labor, and safety standards.
Margaret Myers, “China-Latin America Finance Databases,” Inter-
They maintain that some countries have amassed
American Dialogue, 2021, at https://www.thedialogue.org/map_list/.
unsustainable levels of debt owed to the PRC and have
U.S. Policy Concerns and Considerations become dependent on commodities exports to China. Some
argue that PRC support extends a lifeline to leaders with
Under the George W. Bush and Obama Administrations,
poor governance records and exacerbates corruption.
U.S. officials, while recognizing concerns about China’s
growing influence, generally viewed China’s engagement
117th Congress Action. Legislative initiatives have been
in LAC positively. The overarching goal of U.S. policy was
introduced in both houses to improve the U.S. ability to
for China to contribute economically to the region in a
compete with China worldwide, including in LAC. In June,
transparent fashion, following international rules and
the Senate passed S. 1260, which, among its LAC
complying with local or international labor and
provisions, would authorize a capital increase for the IDB;
environmental standards. From 2006 to 2015, the United
would require strategies to increase exports of U.S. goods
States and China held seven bilateral consultations on LAC.
and services and to strengthen U.S. economic
The Trump Administration viewed China’s engagement in
competitiveness and promote good governance, human
LAC with more suspicion and often warned countries in the
rights, and the rule of law; and would require a report
region about engagement with China. In 2020, the
assessing China’s engagement with international
Administration issued a strategic framework for the
organizations and the defense sector in LAC. In July, the
Western Hemisphere, which included among its priorities
House Foreign Affairs Committee reported H.R. 3524, with
countering economic aggression and malign political
some of the same LAC provisions found in S. 1260,
influence from external actors, such as China.
although not the IDB provision, and additional provisions
to strengthen U.S. engagement with the Caribbean. In
The Biden Administration’s Interim National Security
November, the Speaker and Senate Majority leader issued a
Strategic Guidance, issued in March 2021, describes China
statement that the House and Senate would go to
as a strategic competitor and asserts that the Administration
conference to reconcile the two bills.
will work to reinvigorate and modernize U.S. alliances and
partnerships around the world. The guidance notes that the
The compromise National Defense Authorization Act for
United States will confront China when its behavior
FY2022 (approved by the House on December 7 as an
threatens U.S interests and values. In the context of
amendment to S. 1605) would require a report on efforts by
strategic competition with China, President Biden and G-7
the PRC to expand its presence and influence in LAC. The
leaders agreed in June 2021 to launch a global
measure awaits final Senate action.
infrastructure initiative, Build Back Better World (B3W), to
advance infrastructure development in low- and middle-
Mark P. Sullivan, Specialist in Latin American Affairs
Thomas Lum, Specialist in Asian Affairs
https://crsreports.congress.gov
China’s Engagement with Latin America and the Caribbean
IF10982
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