Trump’s phobia of China, which he considers a true absolute evil (but one that is better to deal with in order to try to keep it under control), is fully justified, despite his unstable and capricious behaviour. The problem is how to do it. This is especially true in what Washington continues to consider its “backyard”: Latin America and its various sub-regions: Mexico (which geographically is part of North America), the Caribbean, the small Central America and Southern America proper. All these entities, in their profound differences, represent an area of great economic potential and strategic interest for Beijing’s project of global domination and, specifically, a real gun to the head of the USA.
The Chinese strategy, while not free from weaknesses and shortcomings, appears coherent and far-reaching, giving ample space to the economic dimension, the real critical point in relations between Washington and the rest of the Western Hemisphere. In just two decades, the economy of the People’s Republic of China growth from the 3% of global gross domestic product (GDP) in 2002 to 18% in 2022. During the same period, trade between the PRC and the Latin American and Caribbean region has multiplied 26-fold, from 12 billion US dollars in 2000 to 315 in 2020. In addition, China intends to expand its influence globally and establish international trade mechanisms less focused on the US currency and the global financial system led by Washington. For this reason, China is developing its own payment system and increasing the number of trade agreements in yuan in order to strengthen the importance of this currency in the global market.
Although China’s defence budget is the second largest in the world, Beijing’s real power comes from finance, economics and technology. Aware of this reality, China is apostatizing from global economic penetration through the Belt and Road Initiative (BRI), to cover global logistics routes and gain economic and, consequently, political influence on the international stage. Since its launch in 2013, the BRI involves over a hundred countries and international organizations, with which China has signed cooperation agreements. A decade later, the BRI has expanded, with different formats and frameworks, to Europe, Asia, Africa, Latin America and the Caribbean, developing infrastructure and raising growing concerns in the United States and Europe.
A New Global Architecture that Challenges Old Structures
In September 2022, the then-US Vice President Kamala Harris, during a visit to Japan, declared that “China is dismantling the key elements of the rules-based international order”, referring to the rules of a world order established in the United States during the Bretton Woods Conference in July 1944, where bankers, diplomats, politicians and economists from 44 countries agreed on a new scheme to ensure the stability of the monetary system and finance the reconstruction of countries affected by WWII. Among the proposals for changing the old geopolitical paradigm there was the establishment of an exchange system based on the dollar, but tied to gold (since the US owned three-quarters of the world’s gold), as well as the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD, known as the World Bank). With these instruments, the US dollar not only replaced the British pound from the leading position as the reference element for global trade and the financial market (reflecting the collapse of Great Britain from a hegemonic power to a regional power after the WWII) and imposed the dollar as the global currency of exchange, but also favoured the establishment of geo-economic instruments of global power such as the IMF (which monitors the global economy and individual states, grants assistance to countries facing balance of payments problems and provides practical assistance to member states) and the World Bank (which provides financing, policy advice and technical assistance to the governments of developing countries), reaffirming its political and economic power. It is symptomatic that the two institutions, even nominally part of the UN system, are not based in New York, where the organization has its HQ, but are located directly in Washington and are perceived as instruments of US influence in the world.
However, 27 years later, in the midst of the Vietnam War and faced with the serious crisis that the US was experiencing due to its high deficits, the President Richard Nixon devalued the dollar and declared the inconvertibility of the dollar into gold on August 15, 1971. Finally, in 1973, Nixon ended the fixed exchange rate; as a result, the Federal Reserve no longer needed to maintain a stable relationship between banknotes and gold. From that moment on, the dollar became a purely fiduciary currency. This means that, currently, the dollar has no physical backing with the precious metal and is based on the trust of the international community in the proper functioning of the American economic system. However, other powers such as China and Russia are trying to establish a new world economic order, less dependent on the dollar and the financial system led by the US. In this regard, in 2002, the Chinese economy accounted for 3% of global GDP and held less than 1% of patents filed globally. As previously reported, in 2022 its economy already accounted for 18% of global GDP and held nearly 47% of global patents filed, with the Chinese firms like Huawei are now the world leaders in technology patents in the telecommunications and digital transformation sector. Undoubtedly, these data show that China is making great geoeconomic progress, competing with the US on the trade and financial front.
Considering that SWIFT (Society for Worldwide Interbank Financial Telecommunication) is an international cooperative organization that provides a financial messaging platform to its user community (about 11,000 financial and corporate entities in over 200 countries) which complies with international sanctions imposed by the US and the EU, both Russia (and consequently China) have set up their own independent payment systems to avoid the threat of such sanctions. On the one hand, Russia, following the annexation of Crimea in 2014 (and at risk of exclusion from SWIFT), established—through the Central Bank of Russia—its own payment system, the SPFS, which connects over 400 Russian institutions, mostly banks, but by the end of 2021 had already connected 23 banks from Armenia, Belarus, Germany, Kazakhstan, Kyrgyzstan and Switzerland. On the other hand, in 2015, with the support of the People’s Bank of China, Beijing launched the CIPS (Cross-Border Interbank Payment System), its own SWIFT, to internationalize the use of the renminbi (the official currency of China, whose basic unit is the yuan). As of September 2023, the CIPS covers over 4,300 banking institutions in 182 countries and regions around the world. Due to the good relations between Moscow and Beijing, the Russian SPFS is expected to integrate with the Chinese CIPS, although the official dates are not yet known.
Over the past year, Russia has started trading in yuan due to Western sanctions on its exports, imports and energy trade, triggered by Russia’s invasion of Ukraine in February 2022. In doing so, China is attempting to dismantle the current economic order and prepare an architecture of yuan-denominated trade agreements in order to increase the currency’s relevance in global markets and challenge the US dollar’s dominance in international trade. In March 2023, China’s state-owned oil and gas giant CNOOC and France’s TotalEnergies completed the first market-wide liquefied natural gas (LNG) transaction, paying in yuan for nearly 65,000 tonnes of LNG imported from the UAE. In addition, in November 2023, China and Saudi Arabia signed a swap deal (a currency exchange between two countries that serves as a conditional loan between central banks) worth about $7 billion in yuan. This deal has significant symbolic value, as Saudi Arabia is the world’s largest oil exporter. In April, Bangladesh made its first yuan-denominated payment to Russia, amounting to $300 million, for the construction of a nuclear power plant, a project 90% financed by a $12.65 billion Russian government loan.
China’s central bank currently has 29 active swap deals, worth more than $4 trillion. In this context, China has also expressed its intention to increase the presence of the yuan in Latin America, having become a key trading partner and an important source of financing for some countries in the region. In 2015, China and Chile signed investment and currency exchange agreements and announced the opening of the first yuan clearing bank in the region. In addition, in March 2023, the Chinese Ministry of Foreign Affairs confirmed the signing of a memorandum of cooperation with Brazil that will help promote bilateral trade and investment in yuan. To this end, the Industrial and Commercial Bank of China (ICBC) and the Brazilian bank BBM agreed to reduce transaction costs with a direct exchange rate between the real (the Brazilian currency) and the yuan, allowing the Brazilian entity to join the CIPS. Similarly, in April 2023, the Argentine Ministry of Economy announced the activation of the swap agreement with China, which allows the payment in yuan of over 1.04 billion dollars of imports from the Asian country.
Similarly, in July 2023, the Bolivian Ministry of Economy reported that financial transactions totalling 278 million yuan had been completed in just two months, predicting an increase in the use of that currency following the export of Bolivian lithium carbonate. Chinese companies CTL (Contemporary Amperex Technology) and Citic Guoan, as well as the Russian company Uranium One Group, a subsidiary of Rosatom, have committed to investing nearly $2 billion in Bolivia to produce 50,000 tons of lithium carbonate per year starting in 2025. However, it should be noted that despite the recognized progress of the Chinese currency in world trade and the self-appreciation expressed by the authorities in Beijing, this currency is still far from becoming the most used currency in international transactions, since the yuan currently represents only 2.7% of the market, compared to 41% of the US dollar. Aware of this reality, China has promoted other mechanisms to progress both in the political and global economic spheres.
A New, Global and Obscure “Silk Road”
Although China has increased its defence budget by 7.2% in 2023, making it the second largest in the world after the US, as mentioned, Chinese influence is based on finance, economics and technology. In this sense, Beijing has focused on global economic penetration through a new and global ‘Silk Road’, the BRI, an international infrastructure project (maritime, land and digital) that Chinese President Xi Jinping launched in 2013 to connect the country with Asia and the rest of the world with the aim of gaining global economic and political influence. Since then, the BRI has exceeded $1trillion in cumulative participation, while China has signed over 200 cooperation agreements with 152 countries and 32 international organizations. Now the BRI is present in Europe, Asia, Africa and Latin America, but it faces criticism, concerns and challenges.
In Europe, for example, in 2015, the Montenegrin government signed an agreement with the state-owned China Communications Construction Company to build the first 41 kilometres of a 163-kilometer highway that runs from south to north across the country. To realize this project, Montenegro received a loan of nearly $1 billion from Exim Bank, also a Chinese state bank. Following allegations of corruption and bribery, the project has been delayed for two years, and the current Montenegrin government is at high risk of default, as the country will otherwise have to give up sovereignty over parts of its territory, following an arbitration procedure to be held in China in accordance with Chinese law. Many Western countries have criticized Montenegro’s decision and warned of the consequences of what they call “debt trap” diplomacy, a Chinese strategy parallel to offers to participate in the BRI to leverage its economic power and seize assets if countries default. Of course, these accusations are firmly denied by Beijing, which claims that the lending and financing practices within the BRI are based on international standards also used by other countries and that they are not blackmail policies and/or blackmail methods.
In 2016, the Chinese state-owned company COSCO Shipping Corporation acquired 67% of the share capital of the Greek port of Piraeus, the largest logistics hub for Greece and the Eastern Mediterranean, for $396 million. A deal that could generate revenues of up to $1.613 billion for the Greek public budget, thanks to a dividend and an annual fee that COSCO will pay for the 36-year concession to manage the port infrastructure. Most recently, in May 2023, the German government announced that it would allow COSCO to sell 24.9% of a terminal in the port of Hamburg. It should be noted that the Chinese company intended to acquire 35% of that terminal; however, these aspirations had to be limited to 24.9%, since this reduction allows the head of the then German Chancellor Olaf Scholz to approve it without going through the government, where liberals and environmentalists could have blocked the operation if the percentage ceded exceeded 25%. This, considering that the port of Hamburg is of strategic importance for German industry and one of the most important in Europe. The loans and infrastructure investments that China has made in Europe have generated criticism and concern among the EU, NATO and the US, since the more assets of this type China has in Europe, the greater its influence on the continent.
However, developing the BRI in Europe seems difficult. In December 2023, four years after becoming the only G7 country to join Beijing’s infrastructure project, Italy formally withdrew from the project, due to frustration over unfulfilled promises and Italy’s strategic reassessment (in reality, political contortions due to the change in government majority with the victory of the post-fascist party led by Giorgia Meloni and unsustainable pressure from Washington, NATO and the EU to end this agreement). In fact, the promises of interesting business did not arrive for a country like Italy, which is heavily dependent on the success of exports. Of the 21.5 billion dollars of business expected for 2019, little or nothing arrived in Italy, with the People’s Since then, Italian exports to China have increased from $14.5 billion to $18.5 billion, while Chinese exports to Italy have increased from $33.5 billion to $50.9 billion. This shows that the BRI, despite Beijing’s dazzling promises, can be much less attractive to partners who are blinded by the promises.
Due to its geographical proximity, Asia represents another area of interest for Beijing’s political expansionism (disguised as economic means). In October 2023, Indonesia, seeking a more independent position vis-à-vis Australia and the United States, inaugurated the first high-speed railway line in Southeast Asia, partly financed by China through loans, connecting the capital Jakarta with the city of Bandung (where the 1955 conference that gave rise to the Non-Aligned Movement was held). After a four-year delay and an additional cost of $1.2 billion, the project was completed at a cost of $7.27 billion. In this regard, China has become the largest creditor to several countries in the region, generating hard-to-repay debts and creating political dependence and strategic subjugation.
An example is Colombo. In 2010, Sri Lanka obtained a loan from China for the construction of the Hambantota port, on the condition that the project would be built by the China Harbour Engineering Company. However, due to a default on its debt, Sri Lanka was forced to lease Hambantota harbour to China for 99 years for $1.12 billion in December 2017, angering New Dehli, which sees this as a step in Beijing’s long-term control drive, the so-called “string of pearls”, surrounding the Indian peninsula with agreements and bases and meddling in the politics of neighboring countries. The construction and leasing of this port have raised concerns not only about alleged bribes given to Sri Lankan officials and politicians in exchange for their support for the project, but also about the potential military use of the port. Although the port leasing agreement rules out military use of the site by the Chinese Navy, India and Western countries fear that the Sri Lankan government could be pressured to allow it since it is still heavily indebted to China. In 2022, Sri Lanka declared bankruptcy, with the PRC as its largest creditor with almost 52% of its total debt. But Asia, paradoxically, is the area where the BRI has performed least due to strong hostility from many actors, which have significant financial resources such as Japan, South Korea, Singapore and Australia. These investments present greater immediate security concerns: they put China in a position to fully exploit the economic potential of key points, such as ports, in a region where control of shipping lines is essential. With Chinese companies controlling the development of a port, the Beijing government can interfere in the physical development of the facility, perhaps to ensure that infrastructure is built that will benefit the navy.
The previous and current Australian governments have been criticized for agreeing to a 99-year lease of the Port of Darwin to Chinese company Landbridge. Criticism has focused on security concerns, such as whether the Chinese government could allow the facility to be used for military surveillance or sabotaged in times of tension. Local media reported that the Port of Darwin has signed a memorandum with the Port of Shenzhen for “friendly cooperation.” The aim is to increase trade ties between the ports, which would mean Chinese companies, such as shipping lines, would be more economically involved in the Port of Darwin. In October 2023, the Department of Prime Minister and Cabinet completed a review of the circumstances of the Darwin Port lease, concluding that a robust regulatory system would address risks to critical infrastructure, and that existing monitoring mechanisms were sufficient and, as a result, the Government did not need to cancel or amend the lease. However, the review did not appear to address the issue that decisions about Darwin Port development are now in non-Australian hands. The Australian Government’s June 2024 divestment order against Chinese-linked entities that hold stakes in rare earth mining company Northern Minerals is an example of what In Africa, on the other hand, taking advantage of donor fatigue and their strategic uncertainties (starting with Washington’s schizophrenic approaches), Beijing is multiplying its presence and interference, becoming the continent’s main economic partner. But to counter Chinese pressure, in 2022 the EU countries committed to investing 164 billion dollars in the African continent by 2027, through an ambitious digital transformation and sustainable development plan called “Global Gateway.”
Chinese pressure stems from the need for raw materials (especially hydrocarbons and mineral resources to continue its industrialization and growth process) and the availability of excess capital that it wishes to invest abroad. On the other hand, African states have a wealth of natural resources, lack capital and infrastructure to drive their growth and are increasingly disappointed and disillusioned by the quality of the economic partnership with the West. Furthermore, demands for democratization, transparency and respect for human and minority rights have irritated African political leaderships, who seem to be dealing with a partner less interested, or not at all, in these aspects, making the “Global Gateway” financial credit line subject to tough competition. Trade has increased from $1 billion in 1992 to over $100 billion in 2008, and it is estimated that this figure could reach $300 billion by 2035.
In this light, it is clear why Xi Jinping’s first official visit as head of state, both in 2013 and on the occasion of his re-election in 2018, was to Africa. However, China is not only the region’s largest trading partner, but also one of its main creditors. Africa has accumulated a debt of $153 billion with Beijing, which between 2000 and 2019 granted 1,143 loans to governments on that continent. Chinese investment in Africa is significant; for example, of Africa’s 231 commercial ports, 61 were built by Chinese firms. China has also built 10,000 kilometres of railways on the continent. Kenya is set to begin construction of the $4.5 billion Naivasha-Malaba railway, marking a major step forward in the country’s plan to complete a high-speed rail corridor stretching from the port of Mombasa to the Ugandan border town of Malaba, and paving the way for a future link with South Sudan. China’s involvement in completing the line extension underscores the growing cooperation between Kenya and China in the largest infrastructure development project led by Beijing’s state-owned firms through financing, technical expertise, construction and direct management with its own staff. Since its launch in 2017, the railway has become the backbone of Kenya’s transport sector, contributing 2-3% to the country’s GDP and continuing to play a key role in transforming logistics and tourism. A commercial and political relationship of mutual need and interest has thus been established.
A clear example of this type of bilateral relationship is known as the “Angola model,” a formula in which China offers financial aid in the form of loans and infrastructure construction in exchange for natural resources. In 2002, after decades of violence and civil war, Angola had achieved a certain degree of stability and needed development funding. In this context, China approached the country offering loans in exchange for considerable amounts of oil. Angola is the African country that not only has the second largest oil reserves on the continent, but has also received the largest amount of Chinese loans, approximately 42.6 billion dollars between 2000 and 2019. However, these development opportunities are hindered by various economic and political factors in African states, including high levels of corruption, which make it impossible to reduce poverty and inequality in the region. Furthermore, Beijing is involved in a fierce rivalry with the United States and the European Union over the completion of the “Lobito Corridor”, a transcontinental logistics route (mainly rail, but not only) that aims to connect the Atlantic coast of Angola with the ports of the Indian Ocean in order to exploit the gigantic mines in the area and also connect the mining and port areas of South Africa and Namibia. For this reason, China not only builds power plants, dams, bridges, roads, ports and railways in Africa, but, as mentioned, is deeply interested in importing several raw materials from the continent: oil from Sudan and Angola, uranium from Namibia and Niger, cobalt and coltan from the Democratic Republic of Congo, among others.
This close relationship raises concerns in Western countries, such as the United States and the European Union, because if African governments’ finances become excessively dependent on Chinese funds, their political and economic decisions could be heavily influenced by Beijing’s priorities, exacerbating the consequences of the “debt trap” mentioned above. In Djibouti, in August 2017, Beijing opened its first (official) overseas military base. This military base covers an area of 360,000 square meters and has a 600-meter-long pier, a helipad, an airstrip capable of receiving military transport aircraft, ammunition and/or weapons depots, administrative offices and accommodation for a naval infantry battalion. This base is not far from military bases of the US, France, Japan, Saudi Arabia and Italy (and the regular presence of British, Norwegian and German military). The policies of Djiboutian President Ismail Omar Guelleh, in power since 1999, promote the granting of concessions for the establishment of foreign military bases as a source of revenue for the public treasury, with revenues estimated between 20 and 60 million dollars for each of these facility. But Djibouti, in addition to the benefits of hosting the Chinese military base, also gets the reconstruction of the docks, facilities and port warehouses.
Once again, the railway seems to be a linchpin of Beijing’s penetrations (which benefit from the technical background of its own high-speed rail network, which now reaches almost 50,000 kilometres and is constantly expanding), with the construction of a high-speed railway line Addis Ababa-Djibouti, connecting the 752 kilometres that separate the Ethiopian capital from the sea, passing through Djibouti. This important transport asset for goods and passengers, in which the PRC has invested about 4 billion dollars, is vital both for Ethiopia (a member of BRICS since January 2025), which lost its access to the sea after the independence of Eritrea, and for Djibouti, since all of Ethiopia’s foreign trade passes through Djibouti, along with goods, raw materials and hydrocarbons from the Central African Republic, Sudan and South Sudan, among others. In addition, China is determined to create a similar complex on the Atlantic coast. Media sources have indicated that the country targeted would be Equatorial Guinea. The former Spanish colony, independent since 1968 and since then subjected to an authoritarian regime, is very rich in oil and is located in a strategic area, close to other oil-rich countries such as Gabon, DRC, Nigeria, Cameroon, Angola (enclave of Cabinda). The country, despite Chinese interests, is deeply involved in the US-led Africom defence cooperation, training and assistance and hosts a French-led training centre for small African navies; the presence of a Chinese military installation would in some ways replicate the situation in Djibouti, but with a less effective, but highly symbolic, presence on the Atlantic Ocean front.
The Far West
While China’s pressures and attempts to penetrate Europe, Asia and Africa are the focus of studies, attention and concern from states, economic think tanks and military forces, very little attention is paid to what is happening in Latin America and the Caribbean. Over the past two decades, trade between the PRC and the region has grown 26-fold, from $12 billion in 2000 to $315 billion in 2020, with an estimated reach of over $700 billion by 2035 and $1 trillion in 2050. These figures are not the result of chance, but rather a clear political decision by the Chinese leadership to expand its influence in this important region. In 2008, the PRC published its first White Paper on Regional Policies, updated in 2016, outlining its priorities and growing interest in the region through a trade and financial strategy. In this document, Beijing outlines its ambitions in trade, industrial investment, financial cooperation, energy and resources cooperation, infrastructure cooperation, and manufacturing cooperation. However, China’s interest in the region extends beyond trade and investment to include the political, social, and cultural spheres, and more recently security (for example, providing military training assistance and materials to Bolivia, Ecuador, and Guyana, and plans to expand the scope and presence of the Chinese Coast Guard in anti-drug and fisheries enforcement).
However, while China’s political and economic diplomacy is developing in the region, it is also working in the cultural sphere. In this context of soft power, Confucius Institutes are a key instrument of cultural diplomacy. Created in 2004 and funded by the Chinese government, these institutes are present in 162 countries with 500 institutions worldwide. In Latin America, there are 41 centers on university campuses, where they teach, finance cultural tourism to China and cultural events, as well as scholarships to study in China. According to the Chinese leadership, Beijing’s cultural diplomacy not only strengthens knowledge and mutual understanding between countries, but also complements its political and economic diplomacy, facilitating understanding in sociocultural terms (favouring the creation of lobbies for future penetration and ties). For this reason, China is committed to strengthening both bilateral relations with states in the region and relations with multilateral organizations operating there. In this regard, in 2004 Beijing joined the Organization of American States (OAS) as a permanent observer member and, in 2009, it became a non-debtor member of the Inter-American Development Bank (IDB), where it invested 350 million dollars to finance various programs in the region. Likewise, the creation of the China-CELAC (Community of Latin American and Caribbean States) Forum at the end of 2014, with the aim of promoting the development of the Comprehensive Cooperation Partnership between China and the region, demonstrates not only the great interest that the Asian giant has in the region, but also the pragmatic way it uses to achieve its objectives. In this perspective, it could be realistic for China to multiply these agreements in order to create a partnership network thanks to the presence of sub-regional pacts at various levels such as the Andean Pact, MERCOSUR, the Pacific Alliance, the Central American Integration System (SICA), the Caribbean Community (CARICOM) and the Union of South American Nations (UNASUR).
In this regard, it can be said that the cooperation system established by China is based on two pillars. The first is the realization of the concept “1+3+6”, mentioned by President Xi Jinping in 2014, in Brazil, during the BRICS meeting; where the “1” refers to a program as a guide for cooperation (as stated, the 2015-2019 Cooperation Plan agreed at the first ministerial meeting of the China-CELAC Forum, in 2015), the “3” refers to the three drivers of the components as the driving force of cooperation (trade, investment and financial cooperation), and the “6” refers to the six elements as the key points of cooperation (natural resources, infrastructure, agriculture, manufacturing, scientific and technological innovation, information technology). The second pillar, is another formula: “3x3x3” introduced by the Prime Minister, Li Keqiang, introduced during his visit to Latin America in May 2015; where the first “3” refers to the three channels to improve continental interconnection (logistics, electricity and information technology), the second “3” refers to the virtuous interaction that must exist between three important actors (enterprises, society and government), and the third “3” refers to funds, credit and security in cooperation projects. It seems that Beijing has developed a specific approach and policies for the region, showing that there is no prospect in supporting “regime changes”. Currently, China is not only the main trading partner of Argentina, Brazil, Chile and Peru, but also the main recipient of exports from Brazil, Chile, Cuba, Peru and Uruguay. However, due to the growth of trade relations, there are significant differences in trade products, since while the countries of the region mainly export raw materials, China exports manufactured and high-tech products to this region. In addition, trade relations between the region and China are concentrated in a few areas: 70% of exported goods are crude oil, copper and soybeans, and 90% of imports are shipped from Brazil, Chile, Peru and Venezuela.
In this context, China shows its interest in the region not only for the abundant natural resources that this region offers and the opportunities that open up a market of about 600 million inhabitants to accommodate its finished and high-tech products, but also for its interest in supporting the “One China” policy, where there are 8 (Guatemala, Belize, Haiti, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, and Paraguay) among the last 13 states that still maintain diplomatic relations with Taiwan. Over the past decade, due to Beijing’s growing economic power and its steadfast refusal to accept relations with states recognized by Taiwan, Panama (2017), the Dominican Republic (2018), Nicaragua (2021), and Honduras (2023) have severed relations with Taiwan and recognized the PRC as the sole legitimate government representing China. As in Africa (in particular), Chinese ‘offers’ are widely recognized and appreciated in most countries in the region. Unlike institutions led by the United States and the European Union, Beijing’s development finance institutions do not condition loans on the economic performance of beneficiaries, changes in economic policies, or democratic guarantees. Between 2005 and 2022, Chinese financial institutions have lent $136 billion (mainly Brazil, Venezuela, Ecuador, and Argentina). The FDI chapter has seen Chinese institutions disburse $160 billion, with plans to reach $250 billion by 2030 and beyond.
In addition, China is one of Argentina’s three main trading partners (with a trade exchange of 20 billion dollars in 2021) and one of its main investors in infrastructure, energy and communications projects. Other important projects include a fertilizer plant, a power plant in the province of Tierra del Fuego, to be added to the plants for the production of batteries for electric vehicles and automobiles, as well as contracts for the exploration, exploitation, production, marketing and industrialization of lithium. In the context of relations between Beijing and Buenos Aires, the completion of the construction, in 2018, of a ground station belonging to the China National Space Administration, the “Escola Espacio Lejano”, located in the Argentine province of Neuquén, part of a network of Chinese ground stations installed in Argentina, Bolivia and Venezuela, has generated concern in the US, given that these ground stations could be used not only for civilian but also military purposes. Many of these agreements were initiated before the arrival at the Casa Rosada of the rope dancer president Javier Milei, who, despite an ideological sympathy for Trump, regarding relations with Beijing, maintains an ambiguous attitude, not initiating any serious change of course in relations with Beijing, but keeping open the possibility of an economic dialogue and promising to visit the Chinese capital as soon as possible for a greater economic partnership and taking time for Washington’s requests not to join the CIPS system.
Another very recent example of the transcontinental penetration of Chinese interests and companies is the announcement that China Eastern Airlines will launch a new air route in December connecting Shanghai and Buenos Aires, with a stopover in Auckland, New Zealand (among other things, this announcement has irritated the Wellington government and will probably be rejected with a severe reprimand to the New Zealand authorities and companies, demonstrating how it is becoming increasingly difficult for Beijing to penetrate an increasingly hostile and alert environment). Chile, a country governed by a left-wing coalition, was among the first to have significant trade with China, reaching 70 billion dollars in 2024. Energy, automotive, raw materials, especially the highly sought-after copper (20 billion dollars out of 70), electricity, mining development, tourism, agroindustry. Likewise, it should be noted that, at the end of 2022, there were 21 Chinese companies in Colombia operating in sectors such as infrastructure, logistics, automotive, among others. Therefore, the PRC is launching 38 projects in that country, with turnarounds that barely exceed 2 billion dollars, but with the prospect of massive growth.
In addition, China is one of Argentina’s three main trading partners (with a trade exchange of 20 billion dollars in 2021) and one of its main investors in infrastructure, energy and communications projects. Other important projects include a fertilizer plant, a power plant in the province of Tierra del Fuego, to be added to the plants for the production of batteries for electric vehicles and automobiles, as well as contracts for the exploration, exploitation, production, marketing and industrialization of lithium. In the context of relations between Beijing and Buenos Aires, the completion of the construction, in 2018, of a ground station belonging to the China National Space Administration, the “Escola Espacio Lejano”, located in the Argentine province of Neuquén, part of a network of Chinese ground stations installed in Argentina, Bolivia and Venezuela, has generated concern in the United States, given that these ground stations could be used not only for civilian but also military purposes.
Many of these agreements were initiated before the arrival at the Casa Rosada of the acrobat president Javier Milei, who, despite an ideological sympathy for Trump, regarding relations with Beijing, maintains an ambiguous attitude, not initiating any serious change of course in relations with Beijing, but keeping open the possibility of an economic dialogue and promising to visit the Chinese capital as soon as possible for a greater economic partnership and taking time for Washington’s requests not to join the CIPS system. Another very recent example of the transcontinental penetration of Chinese interests and companies is the announcement that China Eastern Airlines will launch a new air route in December connecting Shanghai and Buenos Aires, with a stopover in Auckland, New Zealand (among other things, this announcement has irritated the Wellington government and will probably be rejected with a severe reprimand to the New Zealand authorities and companies, demonstrating how it is becoming increasingly difficult for Beijing to penetrate an increasingly hostile and alert environment). Chile, a country governed by a left-wing coalition, was among the first to have significant trade with China, reaching 70 billion dollars in 2024. Energy, automotive, raw materials, especially the highly sought-after copper (20 billion dollars out of 70), electricity, mining development, tourism, agroindustry. Likewise, it should be noted that, at the end of 2022, there were 21 Chinese companies in Colombia operating in sectors such as infrastructure, logistics, automotive, among others. Therefore, the PRC is launching 38 projects in that country, with turnarounds that barely exceed 2 billion dollars, but with the prospect of massive growth.
Conclusion
China undoubtedly looks to set up an international trade less dependent on the dollar and the US-led financial system; to this end, it has entered into numerous trade agreements in yuan to increase the currency’s relevance in global markets. However, this currency is still far from supplanting the dollar in international transactions. Aware of this situation, Beijing has focused on global economic penetration through the BRI over the last decade, seeking to expand into other continents. In Africa, for example, the PRC has managed to position itself not only as the region’s main trading partner, but also as its main creditor, generating a commercial and political relationship of mutual need and interest. This situation is of concern to the US and EU, since if African governments (and other continents) become excessively dependent on Chinese funds, their political and economic decisions could be strongly influenced by Beijing.
Despite a significant financial flow (although recently reduced since the launch of the BRI), the development opportunities offered by these loans and investments are hampered by Africa’s historical problems, including high levels of mismanagement and corruption. In addition to focusing on Africa, Europe and Asia, China shows special interest in Latin America and the Caribbean, a region that not only has abundant natural resources, but also the largest number of states that maintain diplomatic relations with Taiwan. And reducing their number is an important element of the global policy of isolating the “rebel island”. It should be noted that trade between China and this region has multiplied by 26 in the last two decades, becoming the main trading partner of Argentina, Brazil, Chile and Peru, as well as the main destination of exports from Brazil, Chile, Cuba, Peru and Uruguay. However, the trade relationship between Beijing and the subcontinent is very concentrated, since, as mentioned above, only five products account for 70% of goods exported to China, while 90% of these goods are exported to four countries. Contrary to popular belief, China still has a long way to go to displace other players such as the US and the EU from the region. By comparison, in 2020, China’s trade with the subcontinent accounted for 32% of US-EU trade with the Western Hemisphere. At the same time, between 2000 and 2020, Chinese foreign direct investment (FDI) in the subcontinent accounted for only 7% of Washington and Brussels’ combined FDI.
However, China’s interest in Latin America is evident not only in the trade and investment spheres, but also in the political, social and cultural spheres, with the desire to demonstrate to regional actors that there is no need for “regime change,” a persistent tool in Washington’s policies toward the region (during the Cold War, by promoting coups and later implementing it through democratic elections and political processes). Although the United States continues to be the most influential country in the hemisphere, it is true that for Washington, having its main competitor acting in the area closest to it is a highly worrying factor, especially since the US does not yet have a clear strategy to counter it. However, compared to other powers, China has made its interests known in the region through visible policies, which could turn it into one (or another) area of conflict between Washington and Beijing. Currently, the position of the main countries in the region towards these great powers responds to their national interests, aligning themselves with the US and the EU in terms of values and with China in terms of economic interests. The influence (and control) that China is exerting in the Western Hemisphere on infrastructure, companies and critical interests has raised alarm among several actors, considering that many states are not sufficiently aware of the reasons and are not sufficiently ready and strong to negotiate fair agreements in order to protect their independence and national sovereignty.
