China and South America
President Xi Jinping rarely has the opportunity to open a Belt and Road Initiative (BRI) project himself, but in Peru on November 14th he had the chance to do just that. Xi and his Peruvian counterpart, President Dina Boluarte, participated in the opening ceremony of the new superport at Chancay, a city on the Pacific coast some 78km north of the capital, Lima. The scale of the new port is staggering: it broke ground in 2011 and cost $3.5 billion (including a $1.3 billion investment by the Chinese government). When fully online it will be South America’s first smart port, serving Chile and Ecuador as well as Peru. Initial projections expect it to generate $4.5 billion a year and create 8,000 jobs directly linked to the functioning of the port.
Xi was in South America to attend the APEC meeting in Peru and the G20 meeting in Brazil, but taking time out of his schedule to participate in the port opening ceremony via video link highlights just how high the development of China-Latin America relations are in his list of foreign policy priorities. Indeed, the transformation of China into one of the most important partner countries for South America will probably be one of the major legacies of his presidency.
Xi Diplomacy
Prior to 2000, China and Latin America had minimal opportunities for exchange. Some South American students did study in China, and others in the region took inspiration from the Chinese revolution. A sizable Chinese labor force had also migrated to the Pacific coast in the 19th and 20th centuries. However, the actual material and cultural exchange at a national level between China and Latin American countries was comparatively slight. The situation today is completely different, and only the United States of America can challenge China for influence in the region. A crude indication of the dramatic change in the nature of the relationship can be found by looking at trade: In 2000, China-Latin America trade was about $12 billion; by the end of 2023, it was $489 billion, and the World Economic Forum estimates that number will reach $700 billion by 2035. Even taking into account inflation, this is a truly staggering increase in a relatively short period of time.
The Chinese pivot to Latin America is not entirely down to President Xi, but he has certainly helped foster the growth of China-Latin America ties. As early as July 2014, Xi would give a speech in Brasilia to 11 Latin American countries proposing a shared future, and later that year opened the Forum of China and the Community of Latin American and Caribbean States (China-CELAC Forum) to help facilitate this relationship. He has visited the region 5 times since becoming president of China, signed free trade agreements with Peru, Chile, Costa Rica, Ecuador, and Nicaragua, agreed bilateral currency agreements with Argentina and Chile, and welcomed 22 nations into the BRI. He has probably done more than any other single Chinese politician in history to build China’s relationship with the region.
The Chancay Port is a good example of this dynamic: construction on the port started prior to Xi’s presidency, but on becoming president he embraced the project, making it part of the BRI, and ultimately took part in the opening ceremony. China’s increasing involvement in Latin America started before Xi took office in 2013, but since then, he has made Chinese involvement in the region a key plank in his foreign policy.
China's Impact on Latin America
The Chancay Port is the most recent mega-project to hit the headlines, but it isn’t the only one China is building in the region. For example, in Suriname, Chinese engineers were involved in building a hybrid micro-grid that brought 24-hour electricity to some villages for the first time and is helping Suriname in its green transition. In Brazil, China helped build the Belo Monte Hydropower Plant. In Colombia, congestion in Bogota was eased by the Chinese-engineered light rail network. The list goes on: by the end of 2023 China was involved in over 200 infrastructure projects, while Chinese companies have invested roughly $171 billion in the region.
Not all of China’s projects have been economic in nature. For example, the Health Silk Road (HSR), started in 2015 to promote public health within and between BRI countries, has been very active in Latin America. During COVID-19, the actions of the HSR helped to create a lot of goodwill towards China across the region when the HSR distributed medical supplies worth around $215 million. Chinese health authorities also distributed something like 1.5 billion doses of the Chinese Covid vaccines across Latin America - a welcome development in a region that was hit particularly hard by the pandemic.
The Future of China-Latin America Relations
China has become Latin America’s second-largest partner, behind only the U.S. But China’s influence isn’t spread equally throughout the region. The vast majority of Chinese trade in Latin America is with just three countries: Brazil, Chile, and Peru. In Central America and the Caribbean (where the U.S. influence is much greater), China and Chinese companies have much less of a presence. What this means is that in some South American countries, China has already or is soon to eclipse the U.S. as their most important strategic partner.
The Trump presidency will probably further exasperate this divide as those countries already close to China become even closer in order to gain some protection from the wrath of Trump’s aggressive economic posture. What is certain, however, is that China’s relationship with Latin America is now too deep for even the bellicose Trump administration to uproot.
Further Reading
Cultural Exchange Between South America and China
Xiplomacy: Far apart, close in heart -- China-Latin America cooperation
Chancay Port: A Win-Win Development?
Page Editor: Jin Yulin
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