Updated February 24, 2022
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 is to isolate Taiwan by
diplomatic and economic ties. This growth reflects China’s
attempting to lure away LAC countries that maintain
global “soft power” efforts and “influence operations”
diplomatic relations with Taiwan, also known as the
worldwide. A succession of Chinese leaders and other
“Republic of China.” Currently, 8 countries in LAC (out of
officials have visited the region to court governments. In
14 countries worldwide, including the Vatican) recognize
turn, regional leaders and officials have frequently visited
Taiwan; the remaining 25 countries recognize the PRC.
China. The PRC has signed various bilateral partnership
Panama, the Dominican Republic, and El Salvador
agreements with countries throughout LAC, including
switched recognition to the PRC in 2017-2018, and
“comprehensive strategic partnerships” with Argentina,
Nicaragua switched in December 2021. Honduran President
Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.
Xiomara Castro stated her government would maintain
relations with Taiwan for now, despite an electoral
Diplomacy
campaign pledge to establish relations with the PRC.
Beijing’s diplomatic overtures in LAC underpin China’s
economic activities and help institutionalize China’s
Economic Relations
engagement in the region and garner support in
China’s economic goals in LAC include securing access to
international fora. Some analysts argue that China’s
raw materials (such as oil, ores, and minerals) and
activities in LAC reflect a global strategy to reduce U.S.
agricultural goods (especially soybeans); establishing new
dominance, although the activities do not aim to challenge
markets for Chinese goods, including high-value-added
the United States directly or militarily. China’s diplomatic
products; and partnering with LAC firms to access and
efforts include being an observer at the Organization of
develop technology. China also has sought investment
American States, a member of the Inter-American
opportunities in Latin America for its infrastructure firms.
Development Bank (IDB) and the Caribbean Development
Bank, and a participant in the Asia Pacific Economic
Total China-LAC trade increased from almost $18 billion in
Cooperation forum. China has sold Coronavirus Disease
2002 to $318 billion in 2020. China’s imports from LAC
2019 vaccines and provided medical assistance and loans to
amounted to $168 billion in 2020, consisting primarily of
pay for vaccines to about a dozen countries in LAC.
natural resources, including ores (35%), soybeans (17%),
mineral fuels (12%), meat (7%), and copper (6%). China’s
Since 2015, PRC President Xi Jinping has participated in
exports to the region in 2020 amounted to $150 billion,
three summits with leaders and foreign ministers of the
with major exports including electrical machinery and
Community of Latin American and Caribbean States
equipment (23%), machinery and mechanical appliances
(CELAC), a region-wide organization that excludes the
(16%), and motor vehicles and parts (6%). China has
United States and Canada. Xi addressed the Third China-
become the top trading partner of Brazil, Chile, Peru, and
CELAC Ministerial in December 2021 via video message.
Uruguay and the second-largest trading partner for many
The meetings have promulgated “cooperation plans”
other countries. China has free-trade agreements with Chile,
covering politics, security, trade, investment, finance,
Costa Rica, and Peru and, in February 2022, launched talks
infrastructure, energy, resources, industry, agriculture,
with Ecuador for an agreement.
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. To
(https://www.aei.org/china-global-investment-tracker/),
date, 21 countries in LAC participate in the BRI; Argentina
which tracks transactions of $100 million or more, China’s
joined in February 2022, which could pave the way for
investments in LAC from 2005 to 2021 amounted to $140
increased Chinese investment in the country.
billion, with Brazil accounting for $64 billion and Peru $25
billion. Energy projects accounted for 59% of investments;
In 2016, the PRC government released its second policy
metals/mining accounted for 24%. The database also shows
paper on LAC. The paper stated China seeks to strengthen
that China’s construction projects in LAC from 2005 to
cooperation on the basis of “equality and mutual benefit” in
2021 were valued at $66 billion, with energy projects
several key areas, including exchanges and dialogues, trade
accounting for 51% and transportation accounting for 29%.
and investment, agriculture, energy, infrastructure,
https://crsreports.congress.gov
link to page 2 
China’s Engagement with Latin America and the Caribbean
Chinese banks (China Development Bank and China
transportation hubs, roads, infrastructure,
Export-Import Bank) became large lenders in LAC more
telecommunications, legal and illegal fishing, agriculture,
than a decade ago, although amounts have declined in
and military training. SOUTHCOM contends that China
recent years and there were no such development loans in
donates security supplies and equipment to gain access and
2020. Accumulated loans amounted to over $137 billion
win favor with regional security forces and uses medical
from 2005 to 2020, with Venezuela, Brazil, Ecuador, and
diplomacy to its advantage as leverage. It also warns the
Argentina the top recipients, according to the China-Latin
PRC is “seeking to establish global logistics and basing
America Finance Database hosted by the Inter-American
infrastructure in our hemisphere in order to project and
Dialogue (see Figure 1). A majority of the lending (68%)
sustain military power at greater distances.”
has been for energy projects, and 18% has been for
infrastructure projects. Such loans typically lack policy
In recent years, U.S. warnings about China have been met
conditions and have less stringent terms and less rigorous
with some skepticism in LAC and among some regional
environmental guidelines compared with the loans of major
experts. Some analysts contend that China’s primary
international financial institutions.
interests and influence in the region remain largely
Figure 1. China: Financing in LAC, 2005-2020
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
international environmental, labor, and safety standards.
They maintain that some countries have amassed
unsustainable levels of debt owed to the PRC and have
become dependent on commodities exports to China. Some
argue that PRC support extends a lifeline to leaders with
Source: Created by CRS with data from Kevin P. Gal agher and
poor governance records and exacerbates corruption.
Margaret Myers, “China-Latin America Finance Databases,” Inter-
American Dialogue, 2021, at https://www.thedialogue.org/map_list/.
117th Congress Action. In December 2021, Congress
U.S. Policy Concerns and Considerations completed action on the National Defense Authorization
Act for Fiscal Year 2022 (P.L. 117-81), which includes a
Under the George W. Bush and Obama Administrations,
provision (Section 1138) requiring a report by June 30,
U.S. officials, while recognizing concerns about China’s
2022, on efforts by China to expand its presence and
growing influence, generally viewed China’s engagement
influence in LAC.
in LAC positively. The overarching goal of U.S. policy was
for China to contribute economically to the region in a
Both houses also approved broad bills to improve the U.S.
transparent fashion, following international rules and
ability to compete with China worldwide, including in
complying with local or international labor and
LAC. In June 2021, the Senate approved S. 1260, the
environmental standards. From 2006 to 2015, the United
United States Innovation and Competition Act of 2021, and
States and China held seven bilateral consultations on LAC.
on February 4, 2022, the House approved H.R. 4521, the
The Trump Administration viewed China’s engagement in
America COMPETES Act of 2022. Both bills would
LAC with more suspicion and often warned countries in the
require a strategy to strengthen U.S. economic
region about engagement with China.
competitiveness and promote good governance, human
rights, and the rule of law in LAC. Both would require a
The Biden Administration’s Interim National Security
report assessing China’s engagement in international
Strategic Guidance, issued in March 2021, describes China
organizations and the defense sector in LAC; would support
as a strategic competitor and asserts that the Administration
U.S. defense cooperation in the region; and would increase
will work to reinvigorate and modernize U.S. alliances and
U.S. engagement with civil society regarding
partnerships around the world. The guidance notes that the
accountability, human rights, and the risks of pervasive
United States will confront China when its behavior
surveillance technologies. S. 1260 also would require a
threatens U.S interests and values. In the context of
strategy to increase exports of U.S. goods and services to
strategic competition with China, President Biden and G-7
LAC and would authorize a capital increase for the Inter-
leaders agreed in June 2021 to launch a global
American Development Bank. H.R. 4521 also would
infrastructure initiative, Build Back Better World (B3W), to
increase U.S. engagement with the Caribbean. It would
advance infrastructure development in low- and middle-
require a strategy to expand U.S. educational and cultural
income countries. Latin America is to be featured in the
diplomacy (and a report on China’s related activity in
initiative, which is expected to launch in 2022.
LAC), a report on multilateral efforts to address
Latin American fentanyl trafficking and efforts between
The U.S. Southern Command (SOUTHCOM) has
China and Latin America to combat such trafficking, and a
expressed strong concerns about China’s activities in LAC.
report on major Chinese infrastructure investments in LAC.
Its 2021 posture statement states that China continues to
increase its activities across all domains in the region:
cyber, space, extractive and energy industries,
Mark P. Sullivan, Specialist in Latin American Affairs
https://crsreports.congress.gov
China’s Engagement with Latin America and the Caribbean
IF10982
Thomas Lum, Specialist in Asian Affairs
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https://crsreports.congress.gov | IF10982 · VERSION 15 · UPDATED