The inauguration of Peru’s colossal $3.6 billion Chancay mega-port in late 2024 marked a significant milestone in China’s ambitious global infrastructure development strategy, the Belt and Road Initiative (BRI). This project, like many others facilitated by Beijing across Latin America, offers a clear illustration of the multifaceted benefits China accrues, often at a substantial long-term cost to the host nation. The Chancay port, for instance, dramatically reduces transit times between Latin America and Asia by a fortnight, significantly accelerating the flow of Chinese manufactured goods, such as electric vehicles, into the region, while simultaneously streamlining the export of raw materials essential for China’s vast industrial complex.
Financially, the arrangement disproportionately favors China. For an investment of approximately $1.6 billion out of the total $3.6 billion project cost, the state-owned port giant Cosco secured a commanding 60% stake. Furthermore, the Peruvian government’s revision of foreign ownership regulations granted Cosco exclusive operational rights to the deep-water port for a period of up to 60 years. This meticulously structured deal underscores Beijing’s strategic foresight and long-term economic planning. President Xi Jinping, who presided over the port’s opening, pledged an additional $9 billion in credit for BRI-aligned projects in Latin America in early 2025. This commitment, made even as the Chinese economy navigates a period of slower growth, highlights Beijing’s continued appetite for strategic investments in regions that align with its global economic objectives. The funding for these initiatives typically originates from a complex network of policy banks, commercial lenders, state-owned enterprises, sovereign wealth funds, and public-private partnerships, as detailed in a United Nations report.
Historically, BRI investments in Latin America primarily focused on conventional infrastructure projects, including roads, railways, airports, dams, and ports. The Chancay port is one of at least a dozen facilities either wholly or partially owned or managed by Chinese entities. However, China’s state-controlled conglomerates are increasingly diversifying their investments into newer, high-growth sectors. Recent analyses indicate that PowerChina, a major state-owned energy and infrastructure company, has invested in 11 Latin American nations. In Peru, for example, PowerChina acquired two electricity suppliers for an estimated $3 billion, effectively granting China significant control over the country’s electricity distribution network. Beyond power infrastructure, Chinese companies are actively involved in operating Latin America’s largest solar plant in Jujuy, Argentina, and a wind farm in Coquimbo, Chile, further cementing their presence in the region’s renewable energy landscape.
The technological frontier is another area where Chinese firms are making substantial inroads. Huawei, a prominent high-tech company, has established a strong presence in emerging infrastructure sectors such as artificial intelligence, smart city development, and 5G telecommunications. By 2020, Huawei was responsible for managing over half of the internet connections in Curitiba, Brazil. While not formally part of the BRI, Brazil has emerged as Beijing’s largest trading partner within the region. Tulio Cariello, director of content and research at the Brazil-China Business Council, noted to Dialogue Earth that despite Brazil’s non-formal BRI affiliation, there is significant alignment with the initiative’s spirit, evidenced by substantial investments in infrastructure, particularly in the energy sector, as well as in ports, storage, and logistics.
In a region acutely in need of foreign capital, Brazil stands as one of the 20 countries that have inked deals with China, with Colombia being the most recent signatory. Nations such as Brazil, Argentina, Peru, Chile, Ecuador, and, most contentiously, Venezuela, have entered into deep economic partnerships with Beijing, raising concerns among activist organizations about the potential for excessive Chinese control over their national futures. China’s investment footprint in Peru extends to its mining, hydropower, transmission, and copper sectors. Discussions are also underway between Brazil and Beijing regarding a trans-continental rail link that would connect the Amazon basin, an area where China already holds significant interests, to the Pacific coast, thereby offering an alternative to the Panama Canal.
Argentina, which received an $18 billion currency swap lifeline from Chinese banks to navigate its debt crisis, is also a recipient of BRI-financed hydropower dams and space-tracking facilities, the latter of which has drawn significant scrutiny from the United States. Venezuela, meanwhile, is heavily indebted to China, with a substantial portion of this debt being settled through oil exports, a practice that has had detrimental effects on its domestic economy. A primary driver for China’s engagement in Latin America remains the region’s abundant critical minerals, particularly within the "lithium triangle" encompassing Chile, Argentina, and Bolivia. This focus has ignited robust domestic criticism regarding the wholesale export of raw and rare materials that could potentially be processed and exploited for greater economic benefit within the countries themselves.
In the initial phases of the BRI’s expansion into Latin America, Chinese officials often favored engagement with authoritarian regimes or governments with centralized decision-making processes over established democratic, market-driven economies. Parsifal D’Sola, a China expert based in Colombia, diplomatically observed to Dialogue Earth that Beijing tends to "favor state-to-state relations, which facilitates the entry of projects and financing in countries where decision-making is concentrated in a small group and the market plays a secondary role." More pointedly, Evan Ellis, a professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute, argues that while China may not actively seek to foster anti-democratic regimes, such governments find in China a "willing partner." Following a period of tighter financial controls on large-scale projects as Beijing awaited returns on earlier investments, President Xi’s recent pledge of substantial new credit signals a renewed push for BRI expansion in the region.
The economic entanglement between China and Latin America has grown exponentially. In 2024, bilateral trade reached $518 billion, according to official Chinese statistics. This trade dynamic primarily involves China importing agricultural produce to feed its vast population and minerals to fuel its high-tech industries. For example, BYD, the world’s largest electric vehicle manufacturer, has taken over a former Ford plant in Brazil’s Bahia region. In essence, Latin American nations export low-value commodities like soy, copper, lithium, iron ore, and oil, while importing high-value manufactured goods such as machinery, electronics, electric vehicles, and turbines. This exchange positions Latin America unfavorably within the global supply chain, a stark contrast to China’s consistent and strategic economic implementation.
This growing economic relationship has unfolded against a backdrop of what many observers perceive as a relative neglect of Latin America by the United States, its traditional economic partner. Despite the U.S. remaining the region’s largest trading partner, engagement from Washington has been limited. Former President Joe Biden made only two visits to South America, and Donald Trump made just one during his first term. Trump’s approach, characterized by punitive tariffs on Brazil and threats concerning the Panama Canal, has arguably alienated regional leaders.
Senior U.S. military officials have expressed increasing alarm over Beijing’s expanding influence in Latin America. General Laura Richardson of the U.S. Southern Command has warned that China’s presence is "on the 20-yard line, to our homeland," specifically citing the potential military applications of the Chancay Port for surveillance of American naval and commercial vessels. Strategic think tanks like the Atlantic Council have highlighted the broader geopolitical implications, noting that a global network of 38 Cosco-operated ports could present significant logistical challenges for foreign militaries in the event of a conflict in regions like Taiwan or the South China Sea, potentially impeding the movement of ships and supplies to the Indo-Pacific.
Not all BRI projects have proceeded without incident. Global research suggests that as many as one-third of BRI projects worldwide encounter delays, are not completed, or face significant challenges. In Ecuador, a dam project has been mired in disputes over structural defects, and recipient nations frequently grapple with unsustainable debt burdens, with China often securing repayment in kind, such as through oil exports from Venezuela. Allegations of severe environmental damage at the Chancay site were reportedly suppressed.
Panama stands as a notable exception, having chosen to withdraw from BRI-related projects. Despite assurances to former President Trump regarding the sovereignty of its canal, Panamanian President Jose Raul Mulino has excluded China from planned infrastructure initiatives. Other nations, like Mexico, have opted to remain outside the BRI framework, demonstrating a cautious approach to deeper entanglement with Beijing. Nevertheless, China’s trajectory of expanding trade with Latin America appears robust. Trade figures have surged from over $450 billion in 2021 to $518 billion three years later, representing an increase of more than 40 times since the turn of the century. Projections suggest this figure could reach $700 billion within the next decade, underscoring the enduring and expanding economic influence of the Dragon in the Americas.
