Updated May 4, 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
jointly develop technology. China also has sought
American States, a member of the Inter-American
investment opportunities in Latin America for its
Development Bank (IDB) and the Caribbean Development
infrastructure firms.
Bank, and a participant in the Asia Pacific Economic
Cooperation forum. China has been a large supplier of
Total China-LAC trade increased from almost $18 billion in
Coronavirus Disease 2019 vaccines to the region, although
2002 to nearly $449 billion in 2021. China’s imports from
most have been sold rather than donated.
LAC amounted to $221 billion in 2021, consisting
primarily of natural resources, including ores (42%),
Since 2015, PRC President Xi Jinping has participated in
soybeans (16%), mineral fuels and oils (10%), meat (6%),
three summits with leaders and foreign ministers of the
and copper (5%). China’s exports to the region in 2021
Community of Latin American and Caribbean States
amounted to $228 billion, with major exports including
(CELAC), a region-wide organization that excludes the
electrical machinery and equipment (21%), machinery and
United States and Canada. Xi addressed the Third China-
mechanical appliances (15%), and motor vehicles and parts
CELAC Ministerial in December 2021 via video message.
(7%). China has become the top trading partner of Brazil,
The meetings have promulgated “cooperation plans”
Chile, Peru, and Uruguay and the second-largest trading
covering politics, security, trade, investment, finance,
partner for many other countries. China has free-trade
infrastructure, energy, resources, industry, agriculture,
agreements with Chile, Costa Rica, and Peru and, in
science, and people-to-people exchanges. At the 2018
February 2022, launched talks with Ecuador.
summit, China invited countries in LAC to participate in its
Belt and Road Initiative (BRI), which focuses on PRC-
According to the China Global Investment Tracker database
backed infrastructure development around the world. To
maintained by the American Enterprise Institute and the
date, 21 countries in LAC participate in the BRI; Argentina
Heritage Foundation (https://www.aei.org/china-global-
joined in February 2022, which could pave the way for
investment-tracker/), which tracks transactions of $100
increased Chinese investment in the country.
million or more, China’s investments in LAC from 2005 to
2021 amounted to $140 billion, with Brazil accounting for
In 2016, the PRC government released its second policy
$64 billion and Peru $25 billion. Energy projects accounted
paper on LAC. The paper stated China seeks to strengthen
for 59% of investments and metals/mining accounted for
cooperation on the basis of “equality and mutual benefit” in
24%. The database also shows that PRC construction
several key areas, including exchanges and dialogues, trade
projects in LAC from 2005 to 2021 were valued at $66
and investment, agriculture, energy, infrastructure,
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China’s Engagement with Latin America and the Caribbean
billion, with energy projects accounting for 51% and
activities in LAC. Its 2022 posture statement asserted that
transportation accounting for 29%.
the PRC and its state-owned enterprises continued to target,
recruit, and bribe officials at all levels in order to expand
Chinese banks (China Development Bank and China
their economic, political, and military influence in LAC.
Export-Import Bank) became large lenders in LAC more
According to SOUTHCOM, PRC activities have included
than a decade ago, although amounts have declined in
“investments in strategic infrastructure, systematic
recent years and there were no such development loans to
technology and intellectual property theft, disinformation
LAC in 2020 or 2021. Accumulated loans amounted to
and propaganda campaigns, and malicious cyber activity –
$138 billion from 2005 to 2021, with Venezuela, Brazil,
all with the goal of expanding long-term access and
Ecuador, and Argentina the top recipients, according to the
influence in this hemisphere.”
China-Latin America Finance Database hosted by the Inter-
American Dialogue (see Figure 1). A majority of the
U.S. warnings about China at times have been met with
lending (69%) has been for energy projects, and 19% has
some skepticism in LAC and among some regional experts.
been for infrastructure projects. Such loans typically lack
Some analysts contend that China’s primary interests and
policy conditions and have less stringent terms and less
influence in the region remain largely economic and
rigorous environmental guidelines compared with the loans
diplomatic and that the possibility of the PRC creating a
of major international financial institutions.
military sphere of influence in LAC remains small. Some
argue that China’s appeal is limited due to deep political,
Figure 1. China: Financing in LAC, 2005-2021
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. China also has
exported surveillance technologies that some observers fear
could be used to violate privacy or other rights. Some also
argue that PRC support extends a lifeline to leaders with
poor governance records and exacerbates corruption.
117th Congress Action. In December 2021, Congress
Source: Created by CRS with data from Kevin P. Gal agher and
enacted the National Defense Authorization Act for Fiscal
Margaret Myers, “China-Latin America Finance Database,” Inter-
Year 2022 (P.L. 117-81), which includes a provision
American Dialogue, 2022, at https://www.thedialogue.org/map_list/.
(Section 1138) requiring a report by June 30, 2022, on the
PRC’s efforts to expand its presence and influence in LAC.
U.S. Policy Concerns and Considerations
The George W. Bush and Obama Administrations, while
Both houses also have approved broad bills to improve the
recognizing concerns about China’s growing influence,
U.S. ability to compete with China worldwide, including in
generally viewed China’s engagement in LAC positively.
LAC. The Senate approved S. 1260, the United States
The overarching goal of U.S. policy was for China to
Innovation and Competition Act of 2021, in June 2021, and
contribute economically to the region in a transparent
the House approved H.R. 4521, the America COMPETES
fashion, following international rules and complying with
Act of 2022, in February 2022. In March 2022, the Senate
local or international labor and environmental standards.
approved H.R. 4521, substituting the language of S. 1260,
From 2006 to 2015, the United States and China held seven
and the measure went to conference in April. Both versions
bilateral consultations on LAC. The Trump Administration
would require a strategy to strengthen U.S. economic
viewed China’s engagement in LAC with more suspicion
competitiveness and promote good governance, human
and often warned countries in the region about engagement
rights, and the rule of law in LAC; require a report
with China.
assessing China’s engagement in international
organizations and the defense sector in LAC; support U.S.
The Biden Administration’s Interim National Security
defense cooperation in the region; and increase U.S.
Strategic Guidance, issued in March 2021, describes China
engagement with civil society regarding accountability,
as a strategic competitor and asserts that the Administration
human rights, and the risks of pervasive surveillance
will work to reinvigorate and modernize U.S. alliances and
technologies. The Senate version also would require a
partnerships around the world. The guidance notes that the
strategy to increase exports of U.S. goods and services to
United States will confront China when its behavior
LAC and authorize a capital increase for the Inter-American
threatens U.S. interests and values. In the context of
Development Bank. The House version also would increase
strategic competition with China, President Biden and G-7
U.S. engagement with the Caribbean; require a strategy to
leaders agreed in June 2021 to launch a global
expand U.S. educational and cultural diplomacy (and a
infrastructure initiative, Build Back Better World (B3W), to
report on China’s related activity in LAC); and require
advance infrastructure development in low- and middle-
reports on major Chinese infrastructure investments in LAC
income countries, including in Latin America.
and on multilateral efforts to address Latin American
fentanyl trafficking, including efforts between China and
In recent years, the U.S. Southern Command
Latin America to combat such trafficking.
(SOUTHCOM) has voiced strong concerns about China’s
https://crsreports.congress.gov
China’s Engagement with Latin America and the Caribbean
Thomas Lum, Specialist in Asian Affairs
IF10982
Mark P. Sullivan, Specialist in Latin American Affairs
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https://crsreports.congress.gov | IF10982 · VERSION 17 · UPDATED