By: Michael Castillo
Since the turn of the century, the People’s Republic of China has systematically reshaped its engagement with Latin America, evolving from a peripheral actor into a central economic and strategic force. This transformation reflects Beijing’s deliberate, multifaceted strategy, which integrates trade, infrastructure investment, and diplomatic initiatives to secure long-term economic and geopolitical influence in the region.
China’s increasing demand for Latin American resources has been a principal driver of this shift. In 2000, China accounted for less than 2 percent of the region’s total exports; today, it is Latin America’s second-largest trading partner after the United States. The region has become a critical supplier of agricultural commodities such as soybeans, beef, and sugarcane, comprising nearly one-third of China’s total food imports. Moreover, China has prioritized investment in the “lithium triangle” of Argentina, Bolivia, and Chile, which holds the majority of global lithium reserves —a resource critical to China’s expanding electric vehicle and renewable energy sectors.
Beyond trade, Chinese state-owned enterprises have become major investors in Latin America’s energy, infrastructure, and technology sectors. The Belt and Road Initiative (BRI), launched in 2013, has been a key mechanism for expanding Beijing’s regional presence, with 22 of 33 Latin American nations formally joining the initiative. Through the BRI, China has facilitated extensive Chinese investment in transportation, logistics, and industrial infrastructure. One of the most ambitious projects under this framework is the proposed $3.5 billion mega port in Peru, designed to enhance maritime trade efficiency between Latin America and Asia.
China’s growing presence in Latin American infrastructure has also introduced new geopolitical tensions, particularly concerning the Panama Canal. Originally constructed by the United States in 1914 and transferred to Panama in 1999, the canal is a crucial artery for global commerce, accommodating approximately 5-6 percent of total trade. In recent years, companies tied to Beijing have acquired significant stakes in Panamanian infrastructure, constructing bridges, roads, and key port terminals at both ends of the canal. Consequently, China has become the canal’s second-largest user, raising concerns in Washington about the potential vulnerabilities associated with Beijing’s expanding role.
President Donald Trump has expressed his opinions on China’s expanding influence and alleged control of the Panama Canal. On social media, he claimed that the “wonderful soldiers of China” were “lovingly, but illegally, operating the Panama Canal,” a statement denied by both Panamanian and Chinese officials. Trump reiterated this assertion during his inauguration address, declaring, “China is operating the Panama Canal, and we didn’t give it to China. We gave it to Panama, and we’re taking it back.” These remarks underscored Washington’s growing apprehension regarding Beijing’s strategic foothold in Latin America. In response, newly appointed Secretary of State Marco Rubio announced that his first official trip abroad would be to Panama, signaling a renewed U.S. effort to counterbalance China’s regional influence.
As China expands its footprint, Latin America remains a critical battleground in the intensifying strategic competition between the world’s two largest economies. The evolving dynamics of this relationship will have profound implications for trade, governance, and international law, shaping the future of global economic and political power.
