In a bold strategic move that underscores the deepening rivalry between Washington and Beijing, China has unveiled a massive US$9.2 billion credit line and infrastructure investment fund aimed at Latin American and Caribbean nations. This initiative, announced at the China-CELAC (Community of Latin American and Caribbean States) ministerial forum on May 13, is Beijing’s latest attempt to position itself as an alternative global partner—one that promises development without strings, in stark contrast to Washington’s historically domineering stance in the region.
Framed around the language of peace, multilateralism, and mutual respect, Chinese President Xi Jinping opened the summit with a pointed jab at U.S. foreign policy. “Bullying and hegemony will only lead to self-isolation,” Xi said, while pledging billions in development credit and expanded cooperation in clean energy, trade, and infrastructure.
The timing of this economic offensive could not be more critical. Several Latin American and Caribbean countries are actively reassessing their economic ties with the United States after years of strained relations and protectionist policies under the Trump administration, whose “America First” doctrine included punitive tariffs against regional exporters. While the Biden and now Rubio administrations have attempted to mend fences, the legacy of suspicion and strategic neglect lingers—leaving a power vacuum China is eager to fill.
Beijing’s credit line is more than an economic overture—it is a geopolitical statement. For Washington, Latin America has traditionally been a zone of exclusive influence. Yet in recent years, the region has emerged as a key battleground in the U.S.-China rivalry. From trade deals to 5G networks, lithium mines to port construction, Beijing is making sustained inroads, and Washington is increasingly anxious.
At the summit, Chinese Foreign Minister Wang Yi did not mince words. Urging Latin American ministers to “join hands” with Beijing, he accused an unnamed country (read: the United States) of “using tariffs as a weapon to bully others.” The narrative from Beijing is clear: China is offering partnership, while the U.S. offers pressure.
The recent caricature shared on X (formerly Twitter) by Chinese Foreign Ministry spokesperson Lin Jian captured the sentiment. “The US is in no position to point fingers at the cooperation between China and LAC countries,” he wrote, claiming that U.S. engagement had left the region with “open veins,” referencing Eduardo Galeano’s iconic critique of imperialist exploitation.
Behind the war of words lies a profound transformation of regional economics. As of late 2024, China had overtaken the U.S. as South America’s largest trading partner, with bilateral trade reaching US$427 billion in just the first nine months of the year. In parallel, China has signed free trade agreements with Chile, Peru, and Costa Rica. In November 2024, it inked an enhanced FTA with Peru expected to increase trade by 50%.
Beyond trade, China is pouring capital into Latin America’s infrastructure. The Chancay Port in Peru, built by the Chinese state-owned shipping giant COSCO, is emblematic of China’s long-term vision. Costing US$3.5 billion, it’s more than a commercial gateway—it’s a geopolitical chess piece. Though over 4,000 miles from California, the port brings China within reach of U.S. maritime interests. U.S. defense officials have warned that its deep-water facilities could serve dual-use purposes, including housing military survey vessels under the guise of commercial activity.
The United States sees red flags. Speaking in Panama earlier this year, U.S. Secretary of State Marco Rubio warned regional governments that “economic cooperation with the CCP comes with military consequences.” The statement came just before Panama—a key ally and host of the Panama Canal—withdrew from the Belt and Road Initiative (BRI) following U.S. pressure.
The BRI, President Xi Jinping’s signature foreign policy project, remains the backbone of China’s expansion. Of the 33 countries in Latin America and the Caribbean, 22 have signed on to the BRI. Though Panama’s exit was a political win for Washington, signs indicate that China’s reach continues to deepen. In Colombia, President Gustavo Petro has reportedly shown openness to BRI integration, despite U.S. objections.
China’s investment strategy is as broad as it is deep:
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Electric vehicle (EV) factories in Mexico and Brazil.
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Lithium mining projects in Argentina, Bolivia, and Chile—the so-called “lithium triangle” essential to global battery production.
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Hydropower plants and solar farms to build influence in clean energy, a strategic sector for future development.
Between 2005 and 2020, China’s two main policy banks—the Export-Import Bank and the China Development Bank—issued more than US$141 billion in loans to Latin American governments, mostly for infrastructure and energy.
While many countries welcome the infusion of cash, Washington remains wary, warning that these projects are often encumbered by non-transparent terms, high-interest debt, and political strings. U.S. officials frequently cite the case of Sri Lanka’s Hambantota Port, which was leased to China after the island nation defaulted on debt obligations.
Perhaps more alarming for Washington than trade deals or loans is the strategic infrastructure China is building. The line between commerce and military use is becoming increasingly blurred.
The U.S. Southern Command has repeatedly flagged Chinese-operated ports like Chancay and others as potential military assets. The Espacio Lejano space tracking facility in Argentina, operated by the Chinese military under a 50-year lease, has raised fears that it could be used to monitor U.S. satellite activity or even aid in guiding hypersonic missiles.
So far, China has avoided establishing any permanent military bases in the region. But the use of civilian infrastructure for strategic purposes—sometimes called “civil-military fusion”—remains a core concern for U.S. defense planners.
China’s role in digital infrastructure also unsettles Washington. Telecom giant Huawei, blacklisted by the U.S. over national security concerns, remains active in many Latin American markets. It has provided 3G and 4G networks and is working with Brazilian firms to prototype 5G technology. Surveillance systems developed by Huawei, including facial recognition tech, are now active in Peru and Bolivia.
Caught between two giants, many Latin American nations are trying to navigate a middle path. They need Chinese investment and trade but are wary of alienating the United States. Meanwhile, Washington expects loyalty, if not exclusivity, in return for aid and defense cooperation.
This balancing act is growing harder. Brazil, under President Luiz Inácio Lula da Silva, has pushed for a multipolar world order, occasionally aligning with BRICS (Brazil, Russia, India, China, South Africa) interests over Washington’s. Mexico, while closely linked to the U.S. through NAFTA/USMCA, has seen increasing Chinese investments in key industrial sectors.
In the past, Washington might have leaned on its historical and security alliances. Today, that leverage is eroding.
Latin American leaders have grown skeptical of lectures about democracy and transparency, especially when juxtaposed with the economic realities of U.S. disinvestment and protectionism. China’s pitch—no interference, fast money, and long-term development—has appeal, particularly in countries looking to modernize infrastructure and digitize economies without political strings.
Beijing’s credit line is a warning shot to Washington: the Western Hemisphere is no longer off-limits. As China dangles billions in investment, trade partnerships, and BRI cooperation, the U.S. finds itself needing to respond with more than rhetoric and pressure.
There are already signs of Washington recalibrating. The Biden and Rubio administrations have each announced counter-initiatives to reengage Latin America, such as the Americas Partnership for Economic Prosperity (APEP) and expanded loans via the Inter-American Development Bank (IDB). But critics argue these efforts lack the scale and speed of China’s moves.
The U.S. still holds advantages: military alliances, cultural ties, diaspora links, and geographic proximity. But China’s strategy of sustained engagement, large-scale financing, and non-interference diplomacy is reshaping the regional landscape.
