Updated December 28, 2022
China’s Engagement with Latin America and the Caribbean
As the People’s Republic of China (PRC, or China) has
manufacturing, and technological innovation. It noted that
increased its engagement with Latin America and the
China will “actively carry out military exchanges and
Caribbean (LAC) over the past 20 years, U.S.
cooperation” with countries in LAC but emphasized that
policymakers, including in Congress, have raised questions
China “does not target or exclude any third party.”
regarding potential implications for U.S. interests in the
region. China’s engagement with LAC has grown
Another of Beijing’s apparent goals is to isolate Taiwan by
significantly since 2001, particularly in terms of diplomatic
attempting to lure away LAC countries that maintain
and economic ties. A succession of PRC leaders and
diplomatic relations with Taiwan, which officially calls
officials have visited LAC to court governments, reflecting
itself the “Republic of China.” Currently, 8 countries in
China’s global “soft power” efforts and “influence
LAC (out of 14 countries worldwide, including the Vatican)
operations” worldwide. Regional leaders and officials, in
recognize Taiwan; the remaining 25 in LAC recognize the
turn, have frequently visited China. The PRC has signed
PRC. Panama, the Dominican Republic, and El Salvador
various bilateral partnership agreements with countries
switched recognition to the PRC in 2017-2018, and
throughout LAC, including “comprehensive strategic
Nicaragua switched in December 2021. Honduran President
partnerships” with Argentina, Brazil, Chile, Ecuador,
Xiomara Castro, inaugurated in January 2022, stated her
Mexico, Peru, and Venezuela.
government would maintain relations with Taiwan for now
despite a campaign vow to establish relations with the PRC.
Diplomacy
Beijing’s diplomatic overtures in LAC underpin China’s
Economic Relations
economic activities. They also help institutionalize China’s
China’s economic goals in LAC include securing access to
engagement in LAC and garner support in international
raw materials (e.g., oil, ores, minerals) and agricultural
fora. Some analysts argue that the PRC’s activities in LAC
goods (especially soybeans); establishing new markets for
reflect a global strategy to reduce U.S. dominance, although
Chinese goods, including high-value-added products; and
the activities do not aim to challenge the United States
partnering with LAC firms to access and jointly develop
directly or militarily. China’s diplomatic efforts include
technology. China also has sought opportunities in Latin
being an observer at the Organization of American States, a
America for its infrastructure firms. China’s projected
member of the Inter-American Development Bank and the
slower economic growth in the near term, however, may
Caribbean Development Bank, and a participant in the Asia
result in weaker PRC demand for LAC exports and
Pacific Economic Cooperation forum. China has supplied
decreased PRC capital flows to the region.
Coronavirus Disease 2019 vaccine doses to many LAC
countries, albeit largely through sales rather than donations;
Total China-LAC trade was valued at $448 billion in 2021.
most doses in the region have come from elsewhere.
China’s imports from LAC amounted to $221 billion in
2021, consisting primarily of natural resources, including
Since 2015, China’s top leader Xi Jinping has participated
ores (42%), soybeans (16%), mineral fuels and oils (10%),
in three summits with leaders and foreign ministers of the
meat (6%), and copper (5%). China’s exports to the region
Community of Latin American and Caribbean States
in 2021 amounted to $227 billion, with major exports
(CELAC), a region-wide organization that excludes the
including electrical machinery and equipment (21%),
United States and Canada. Xi addressed the Third China-
machinery and mechanical appliances (15%), and motor
CELAC Ministerial in December 2021 via video message.
vehicles and parts (7%). 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 and,
science, and people-to-people exchanges. At the 2018
in February 2022, launched talks with Ecuador, which
summit, China invited countries in LAC to participate in its
reportedly were almost complete as of December 2022.
Belt and Road Initiative (BRI), which focuses on PRC-
backed infrastructure development around the world. To
According to the China Global Investment Tracker database
date, 21 countries in LAC participate in the BRI; most
maintained by the nongovernmental organizations
recently, Argentina joined in February 2022.
American Enterprise Institute and the Heritage Foundation,
China’s investments in LAC from 2005 to mid-2022
The PRC government’s second policy paper on LAC,
amounted to $143 billion, with Brazil accounting for $64
released in 2016, stated that China seeks to strengthen
billion (45%) and Peru $25 billion (17%). Energy projects
cooperation on the basis of “equality and mutual benefit” in
accounted for 59% of investments and metals/mining
several key areas, including exchanges and dialogues, trade
accounted for 24%. The database also shows that PRC
and investment, agriculture, energy, infrastructure,
construction projects in LAC from 2005 to mid-2022 were
https://crsreports.congress.gov

---

link to page 2
China’s Engagement with Latin America and the Caribbean
valued at $65 billion, with energy projects accounting for
political, and military influence in LAC. According to
49% and transportation accounting for 31%.
SOUTHCOM, PRC activities have included “investments
in strategic infrastructure, systematic technology and
Chinese banks (i.e., China Development Bank and China
intellectual property theft, disinformation and propaganda
Export-Import Bank) became large lenders in LAC more
campaigns, and malicious cyber activity—all with the goal
than a decade ago, although amounts have declined in
of expanding long-term access and influence in this
recent years; the two institutions issued no such
hemisphere.”
development loans to the region in 2020 or 2021.
Accumulated loans amounted to $138 billion from 2005 to
At times, U.S. warnings about China have been met with
2021, with Venezuela, Brazil, Ecuador, and Argentina the
some skepticism in LAC and among some regional experts.
top recipients (see Figure 1). A majority of the lending
Some analysts contend that China’s primary interests and
(69%) has been for energy projects, and 19% has been for
influence in the region remain largely economic and
infrastructure projects. Such loans typically lack explicit
diplomatic and that the possibility of the PRC creating a
policy conditions and have less stringent terms and less
military sphere of influence in LAC remains small. Some
rigorous environmental standards compared with the loans
argue that China’s appeal is limited due to deep political,
of major international financial institutions.
social, and cultural differences and language barriers.
Figure 1. China: Financing in LAC, 2005-2021
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. In
some LAC countries, however, civil society groups,
journalists, and academics have exposed or resisted some

PRC activities involving issues such as corruption, poor
Source: Created by CRS with data from Kevin P. Gal agher and
business practices, and influence operations.
Margaret Myers, “China-Latin America Finance Database,” Inter-
American Dialogue, 2022, at https://www.thedialogue.org/map_list/.
117th Congress Action. In December 2021, Congress
enacted the National Defense Authorization Act for Fiscal
U.S. Policy Concerns and Considerations Year 2022 (FY2022 NDAA; P.L. 117-81), which required a
The George W. Bush and Obama Administrations, while
report (Section 1338) on the PRC’s efforts to expand its
recognizing concerns about China’s growing influence,
presence and influence in LAC. In December 2022,
generally viewed China’s engagement in LAC positively.
Congress enacted the FY2023 NDAA (P.L. 117-263),
The overarching goal of U.S. policy was for China to
which requires reports on activities undertaken by China
contribute economically to LAC in a transparent fashion,
and Russia intended to increase their influence in LAC
following international rules and complying with local or
(Section 6524); PRC port infrastructure purchases and
international labor and environmental standards. From 2006
investments globally critical to U.S. interests and national
to 2015, the United States and China held seven bilateral
security (Section 1259); and Chinese financing of port
consultations on LAC. The Trump Administration viewed
infrastructure globally (Section 6526).
China’s engagement in LAC with more suspicion, often
warning countries in LAC about engagement with China.
Both houses approved bills to improve the U.S. ability to
compete with China, including in LAC. In June 2021, the
The Biden Administration’s National Security Strategy
Senate approved S. 1260, the United States Innovation and
describes China as a strategic competitor but maintains that
Competition Act of 2021, and in February 2022, House
the Administration will avoid the temptation to see the
approved H.R. 4521, the America COMPETES Act of
world solely through the prism of strategic competition. It
2022. In March 2022, the Senate approved H.R. 4521,
states that because the Western Hemisphere impacts the
substituting the language of S. 1260. Ultimately, many
United States more than any other region, the
provisions, including those on LAC, were not included in a
Administration will continue to deepen partnerships in LAC
later version of the bill enacted in August 2022 (P.L. 117-
to advance economic resilience, democratic stability, and
167). Both House and Senate versions of H.R. 4521, would
citizen security. The Administration also vows to help
have, among other LAC provisions, required a strategy to
protect LAC from external interference or coercion,
strengthen U.S. economic competitiveness and promote
including from the PRC.
good governance, human rights, and the rule of law in
LAC; required a report assessing the PRC’s engagement in
The U.S. Southern Command (SOUTHCOM) has voiced
international organizations and the defense sector in LAC;
strong concerns in recent years about China’s activities in
and supported U.S. defense cooperation in LAC.
LAC. Its 2022 posture statement asserted that the PRC and
its state-owned enterprises continued to target, recruit, and
Mark P. Sullivan, Specialist in Latin American Affairs
bribe officials at all levels to expand their economic,
Thomas Lum, Specialist in Asian Affairs
https://crsreports.congress.gov

---

China’s Engagement with Latin America and the Caribbean

IF10982


Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.

https://crsreports.congress.gov | IF10982 · VERSION 18 · UPDATED

---