China’s presence in Latin America is no longer defined by the big headline numbers that dominated the 2000s and 2010s. The era of large, state bank financed oil deals and dazzling infrastructure announcements has given way to a quieter, more selective, and more strategic engagement. Trade volumes remain immense, new shipping routes are opening, and Chinese brands have become ubiquitous across the region. Yet investment patterns, sectors of interest, and the tools Beijing prefers have changed.
Latin America has not slipped off China’s radar. Rather, the region has been assigned a different role in Beijing’s global strategy. China is shifting from building out a visible footprint everywhere to securing control over specific nodes, exporting technology and standards, and deepening security relationships with receptive partners. Latin American governments, meanwhile, are reassessing the benefits and risks of Chinese engagement at a time when the United States is again central to their trade and investment prospects and when domestic politics are sensitive to deindustrialization and economic dependence.
A serious policy discussion about China in Latin America needs to start with this recalibration. The question is not whether China is “in” or “out” of the region. It is how Beijing’s new playbook changes the balance of opportunity and vulnerability for Latin American states, and what options those states still have to shape the terms of engagement.
From big loans to selective leverage
Over roughly two decades, China moved from peripheral actor to central player in Latin American economics. Trade between China and South America multiplied more than twenty times between 2000 and 2020, rising from about 12 billion to 315 billion dollars, with projections that it could exceed 700 billion by 2035. Chinese development banks extended more than 140 billion dollars in loans to the region between 2005 and 2022, much of it to energy and infrastructure projects in countries that had limited access to Western finance.
This “first phase” of engagement followed a recognisable pattern. Chinese policy banks financed large projects, often backed by commodity export commitments. State owned enterprises built hydropower dams, highways, and ports. Governments celebrated “south south” cooperation and the arrival of an alternative to the IMF and World Bank.
That world has faded. The Belt and Road Initiative continues globally and reached a record 123 billion dollars in deals in 2024, with a growing share in green energy projects. But Latin America’s share of that engagement has fallen sharply. Recent analysis of Belt and Road data shows that Latin American BRI countries experienced their lowest level of Chinese engagement in almost a decade, with steep drops in investment and only modest growth in construction activities.
Chinese outward direct investment in Latin America and the Caribbean has also lost momentum. One monitoring study notes that Chinese OFDI to the region in 2024, at about 8.5 billion dollars, was down nearly 12 percent from the prior year and less than half the level seen in 2019, far below the 2010 peak. At the same time, the Economic Commission for Latin America and the Caribbean reports that Chinese FDI accounted for only around 2 percent of total recorded foreign direct investment into the region in 2024, compared with 38 percent from the United States and 15 percent from the European Union.
Several forces inside and outside China explain this retrenchment. Beijing has tightened control over overseas lending after a decade of problematic projects, debt distress, and reputational hits in many developing countries. Chinese banks are under pressure to manage domestic risks and clean up balance sheets. Latin American debt crises and political volatility have made large sovereign loans less attractive. And in Latin America itself, civil society resistance, environmental litigation, and cost overruns have complicated big ticket infrastructure ventures.
Yet this is not a withdrawal. Trade in goods is still expanding. Chinese exports to Latin America grew by 13 percent between 2023 and 2024, including robust growth in both advanced and low tech products. Chinese exports of electric vehicles to the region jumped by 55 percent in 2023 alone, reaching about 4.2 billion dollars. Chinese firms continue to invest in ports, logistics, energy distribution, and manufacturing. In Brazil, Chinese investment more than doubled in 2024 to 4.2 billion dollars, with new projects in electric vehicles, logistics, and digital services.
The difference is scale and focus. Beijing is no longer chasing every opportunity to finance a dam or railway. It is concentrating on a smaller set of assets and sectors where control brings lasting leverage: ports and shipping routes, power grids and distribution networks, critical minerals processing, digital infrastructure, and security and policing cooperation.
Control of nodes, not just volumes
One pillar of the new playbook is control over physical nodes that anchor trade flows between Latin America and Asia. Chinese companies have become major investors and operators in regional ports. A recent study using a new database identified 37 port projects in Latin America and the Caribbean tied to Chinese firms, including concessions, construction, and acquisitions. A complementary investigation concludes that Chinese entities are principal investors or administrators in roughly one third of the region’s deep water ports.
The Chancay port in Peru illustrates the logic. The project, led by COSCO with Peruvian participation, involves a multi billion dollar deep water terminal near Lima, designed primarily to serve trade with Asia, especially copper and agricultural exports. Estimates suggest that Chancay will cut shipping times to Chinese ports by nearly two weeks and serve as a hub for regional exports. In April 2025, Guangzhou port in China launched a direct shipping route to Chancay, with COSCO vessels expected to reduce logistics costs by around 20 percent.
From a commercial perspective, these projects bring capital, technology, and capacity. From a strategic perspective, they embed Chinese firms at chokepoints in regional and interoceanic trade. The CSIS “No Safe Harbor” report argues that such positions could, in extreme scenarios, give Beijing the ability to gather sensitive data, prefer certain cargoes, or threaten to constrain flows in a crisis. Critics of this view, including analysts writing from Beijing, have pushed back, warning against speculation about military use and pointing to the commercial character of most operations.
The political sensitivity is real. In Panama, U.S. pressure over Chinese influence around the canal contributed to the government’s decision not to renew its Belt and Road cooperation agreement with China in 2025, even as Chinese president Xi Jinping publicly backed Panama’s sovereignty and criticized outside interference. Similar frictions appear in debates over port concessions in the Caribbean and Brazil.
Beijing’s adjustment to this pushback has not been to abandon port and logistics investments, but to be more careful in how they are structured and justified. Partnerships increasingly involve local state owned or private firms, and Chinese actors present themselves as long term commercial partners rather than geopolitical players. Yet the strategic value of controlling crucial nodes remains clear in Chinese internal discourse.
Technology, vehicles, and the digital layer
A second pillar of the new approach lies in the export of technology, especially where Chinese firms have a strong cost and scale advantage. Electric vehicles, batteries, telecom equipment, and digital platforms are central here.
China’s domestic EV market is saturated and intensely competitive. Latin America, with growing urban middle classes, weak public transport in many cities, and limited local manufacturing, is an attractive destination. Chinese EV exports to the region, including to Mexico, Brazil, Chile, and Colombia, have surged, growing by more than half in value in 2023. This is not only an export story. Chinese auto makers are setting up assembly and manufacturing bases, for example in Brazil and Mexico, both to serve local markets and to explore routes into North America and Europe as trade barriers shift.
Telecommunications and surveillance technology are another frontier. Chinese companies have long been present in the region’s telecom sector. Huawei and ZTE have supplied network equipment in many countries and participated in 4G and 5G rollouts. Chinese firms have also supplied “safe city” surveillance systems featuring cameras, facial recognition, and integrated monitoring platforms to municipalities in Argentina, Brazil, Bolivia, Ecuador, Guyana, Suriname, and others.
This hardware is often bundled with financing and training. Under Xi Jinping’s Global Security Initiative, launched in 2022, China has expanded law enforcement and policing cooperation with developing countries. In Latin America, this takes the form of training courses for police and internal security forces, study visits, and equipment packages.
Chinese companies are also present in the broader digital ecosystem. E commerce platforms, payment systems, and logistics providers are increasingly active in the region. Beijing’s longer term ambition to internationalize the renminbi and promote Chinese digital standards finds a natural testing ground in such markets.
The export of technology and standards matters because it locks in dependencies that are harder to unwind than simple trade flows in commodities. Once a city’s surveillance system, a bank’s payment rails, or a telecom network is built around Chinese hardware and software, replacing it is technically and financially costly. That gives Beijing long term influence even if headline FDI remains modest.
Security and military diplomacy in the background
Alongside trade and technology, China has quietly deepened its security relationships in the region. This is the third key aspect of the new playbook.
For more than a decade, China has sold arms to Latin American states, including aircraft, vehicles, radar systems, and small arms, particularly to governments facing restrictions on purchases from Western suppliers. Venezuela, Bolivia, Ecuador, and Argentina have all acquired Chinese equipment.
More recently, the emphasis has shifted from hardware sales toward training, education, and institutional ties. Chinese and Russian military diplomacy in Latin America now includes a dense web of officer education programs, joint exercises, high level visits, and symbolic deployments. A new dataset compiled by CSIS shows that Chinese military education and training for Latin American officers already outstrips that of the United States in some measures, with more students enrolled in Chinese institutions than in U.S. military colleges from around 2020 onward.
Concrete examples include Chinese participation in Brazil’s Operation Formosa exercises in 2024 alongside U.S. troops, a first for the People’s Liberation Army in a major Brazilian drill. At the same time, law enforcement and internal security cooperation under the Global Security Initiative has expanded, with Chinese agencies offering police training, cyber security collaboration, and surveillance infrastructure to regional partners.
Security cooperation serves multiple purposes for Beijing. It builds familiarity between officers and institutions, shapes perceptions of China as a capable and benign partner, and creates openings for defence industrial links. It also gives Chinese actors insight into the internal security structures of partner states, which can matter if domestic unrest or political crises arise.
From the Latin American side, Chinese security cooperation is attractive partly because it comes with fewer conditions on human rights or internal governance. Police and security services can acquire tools and training without the layers of oversight that accompany U.S. or European assistance. That appeal, however, sits uneasily alongside concerns among local civil society and some political actors about surveillance, privacy, and the risk of enabling repression.
Latin American reactions: pushback and pragmatism
Latin America’s response to this new phase is not uniform. Governments are recalibrating their China policies in light of domestic politics, economic pressures, and shifting relations with Washington.
Some states are leaning further into Chinese partnerships as part of a broader repositioning in world politics. Colombia’s decision to seek membership in the BRICS New Development Bank and its active engagement with Belt and Road projects under President Gustavo Petro sit in this camp, even as Bogotá insists on maintaining a balanced relationship with the United States. Venezuela, Cuba, and Nicaragua see China as a crucial counterweight to U.S. pressure and sanctions, and Beijing is happy to signal political solidarity in return.
Others are hedging. Brazil courts Chinese investment and trade while seeking to diversify partners and retain strategic autonomy. President Lula’s government has welcomed Chinese capital in green industry and electric vehicles but also insists on local content and technology transfer. Brazilian officials openly state their desire to avoid simple “screwdriver” assembly operations that create few domestic linkages.
There is also growing unease about the structure of trade. Several countries are running widening deficits with China as imports of manufactured goods, especially vehicles and electronics, outpace exports of commodities. Analysts have noted that some Latin American governments are considering, or have already adopted, trade measures to stem surges of Chinese imports, particularly in the automotive sector.
Civil society actors and local communities have mounted opposition to some Chinese backed mining and infrastructure projects on environmental and social grounds. Courts in countries like Ecuador and Peru have ruled against projects that violate consultation obligations with Indigenous communities, regardless of the origin of the investor. These dynamics complicate Beijing’s ability to present itself as a purely benign partner.
At the same time, Latin American policymakers are acutely aware that Chinese capital and markets remain important, especially as global growth slows and traditional Western lenders offer limited new resources. The challenge is to gain more bargaining power over the terms of engagement without closing off access entirely.
Implications for Latin American agency
China’s new playbook does not eliminate room for Latin American agency. It changes where that agency can be exercised.
The old model of large sovereign loans gave governments significant discretion in how to use funds but often limited their ability to renegotiate once debt burdens became unsustainable. Today, with fewer big loans on offer and more emphasis on equity investments, joint ventures, and project finance, Latin American authorities have more room to influence project design and regulatory frameworks up front.
The growing importance of ports, grids, digital infrastructure, and security cooperation, however, raises the stakes of early decisions. Concessions for strategic assets, contracts for data sensitive technologies, and memoranda of understanding on policing can have long term consequences that are difficult to reverse.
Three points deserve particular attention.
First, diversification. ECLAC’s data show that Chinese FDI, while highly visible, remains a small share of total foreign investment, dwarfed by U.S. and European flows. This reality gives Latin American states leverage if they choose to use it. They can encourage competition among external partners, insist on transparent bidding, and design regulatory frameworks that prevent any single foreign actor from gaining excessive control over critical infrastructures. That requires coordination among domestic agencies and political continuity beyond election cycles.
Second, value capture. Chinese firms will continue to seek access to Latin American raw materials, markets for manufactured exports, and nodes in global shipping. Governments in the region can tilt negotiations toward greater local processing, technology transfer, and workforce development. Brazil’s insistence on localization in EV investments is one example. Mining and energy concessions can tie approvals to commitments on local value chains, environmental performance, and contributions to broader development plans. This is not a trivial task and can backfire if demands are unrealistic, but it is one of the few levers available.
Third, governance and norms. Engagement with Chinese security and digital providers poses particular risks for civil liberties and institutional independence. Latin American legislatures, courts, and civil society groups can push for oversight of surveillance systems, clear rules on data storage and access, and public reporting on foreign police and military training arrangements. Where institutions are weak, external actors, including the European Union and international organizations, can support regulatory capacity building and help align standards with democratic practices.
China will continue to offer attractive packages that combine speed, financing, and visible infrastructure. The new playbook adds the promise of technology, security assistance, and a place in the rhetoric of South–South solidarity. Latin American states still have choices about which parts of that package to accept and on what terms.
Implications for external partners
Although this brief focuses on China’s strategy, the adjustments in Beijing’s approach have direct implications for other actors.
For the United States, the shift is a warning against complacency. It is true that U.S. capital dominates FDI in Latin America and that nearshoring is pulling production back toward the hemisphere. But China’s quieter focus on ports, digital infrastructure, and security education allows it to entrench influence in areas where U.S. attention has been inconsistent. Military diplomacy figures show that Chinese institutions are training more Latin American officers than U.S. counterparts in some categories, while Chinese companies continue to gain experience operating strategic ports.
If Washington wants to remain the preferred security and economic partner, it will need to invest in areas that Latin American governments actually prioritise: infrastructure that boosts competitiveness, digital connectivity that is affordable, and security assistance that addresses everyday crime and corruption without heavy handed conditionality.
For Europe, the main risk lies in being squeezed between U.S.–China rivalry and Latin American demands for autonomy. European firms still enjoy strong reputations in sectors such as renewable energy, transport, and finance. Yet Europe’s collective share in FDI to the region has been shrinking, and Chinese and U.S. actors are faster in some strategic sectors. European policymakers will need to decide whether Latin America is a priority theatre for their global economic security agenda or a secondary concern.
For multilateral institutions, China’s evolving approach presents both challenges and openings. Institutions such as the IDB, CAF, and the World Bank can play a convening role, encouraging transparent frameworks for port concessions, digital standards, and critical mineral governance that include Chinese entities but limit the scope for unilateral leverage. At the same time, the rise of China linked banks and funds, such as the New Development Bank, shows that the global development finance landscape is becoming more plural.
Conclusion
China’s engagement with Latin America is not fading. It is evolving. The headline figures of the first phase have given way to a more targeted strategy that seeks control over key logistic hubs, exports of competitive technologies, and deeper security ties under the banner of new global initiatives. Trade remains strong, even as investment flows become more selective and Africa and Asia absorb a larger share of Belt and Road expansion.
This new playbook is better aligned with Beijing’s own constraints and ambitions. It uses limited capital to secure long term influence, pursues partnerships that reinforce China’s role as a technology and security provider, and leverages narratives about south–south cooperation and multipolarity to frame its presence as a counterweight to U.S. dominance.
Latin American governments are not passive in this story. They are weighing Chinese offers against dependence risks, searching for ways to extract more value from foreign engagement, and responding to domestic pressures over jobs, environment, and sovereignty. Some will lean closer to Beijing, others will hedge, and many will seek to exploit competition between external powers.
The outcome will not be determined in Beijing or Washington alone. It will emerge from a series of very concrete choices in capitals from Mexico City to Brasília, Lima, Bogotá, and beyond: which port concessions to approve, which telecom vendors to license, which police training programs to accept, which conditions to place on EV assembly plants, miners, and grid operators.
Understanding China’s new playbook helps identify what is at stake in those decisions. The more Latin American states recognise where Beijing’s priorities now lie, the better they can use competition to their advantage, rather than simply adjusting to a new form of dependency under another name.
