Beijing has signalled it intends to deepen engagement with Latin America, issuing its first official policy paper on the region in nearly a decade as Washington moves to reassert influence
The contest between the United States and China is heating up for influence in Latin American countries as trade, infrastructure and access to strategic resources in the region take centrestage and greater geopolitical weight.
The rivalry has sharpened in recent months following the Trump administration’s push to reassert US primacy in the Western Hemisphere and curb the role of “non-Hemispheric competitors”, a reference widely understood to mean China. In turn, Beijing has signalled that it intends to deepen its engagement with Latin America, issuing its first official policy paper in December on the region in nearly a decade.
What was once a largely economic relationship is increasingly being viewed in strategic terms by both sides, bringing ports, energy assets, minerals and political alignments in Latin America into focus.
How shifting global power narratives are reshaping Latin America
China’s 6,700-word policy paper, which came just days after Trump’s new national security strategy, framed its engagement with Latin America as part of a broader realignment in global power. It said a “significant shift is taking place in the international balance of power,” a phrase frequently used by Chinese president Xi Jinping to argue that US global dominance is fading.
In the policy paper, Beijing cast itself as a long-standing partner of the Global South, including Latin America and the Caribbean, and signalled its intention to deepen diplomatic, economic and institutional ties. The document expanded on China’s earlier 2016 policy to include governance and security cooperation, indicating a wider scope of engagement.
Meanwhile, the US, in its security paper, framed China’s growing footprint as a strategic challenge, particularly where economic influence is seen aligning with critical infrastructure and security-sensitive assets.
What is driving China’s growing presence in Latin America
China’s expanding role in Latin America is more rooted in economics until now. It has displaced the US as the largest trading partner for several countries in the region and has steadily increased its role as a source of finance and investment. It has become the top trading partner for countries such as Brazil, Peru and Chile, with trade exceeding $500 billion in 2024 and continuing to grow.
Beijing offers credit lines, such as a $9 billion pledge at the 2025 China-CELAC Forum. These moves fill gaps left by perceived US disengagement, boosting China’s role in agriculture, ports and digital systems.
A major pillar of this engagement is the Belt and Road Initiative, which now includes 24 signatories in Latin America.
Chinese officials and analysts argue these investments address infrastructure gaps that have been created due to limited Western financing. However, US officials have increasingly begun to view such projects through a security lens, especially where they involve ports, energy grids or digital systems that could carry dual-use risks.
Why critical minerals and energy have become flashpoints
Strategic resources are another key driver of rivalry between the two superpowers, as Latin America is a major source of critical minerals such as lithium and copper, which are essential for electric vehicles, batteries and clean energy technologies.
China has invested heavily across the so-called Lithium Triangle of Argentina, Bolivia and Chile, and in copper in Peru. Beijing also plays a dominant role in mineral processing and refining. Metals, minerals and mining remain the largest destination for Chinese outbound investment in the region, even as their share has declined from earlier peaks.
Chinese outbound foreign direct investment in Latin America and the Caribbean mining and minerals sector totalled $8.53 billion in 2024, part of a broader $55.62 billion for 2020–2024, where the sector captured 38.41 per cent ($21.37 billion).
Energy investment is also significant, as Chinese state-owned companies have built or acquired stakes in power generation and transmission assets, particularly in Brazil, aligning with Beijing’s broader push towards renewable and non-fossil energy projects.
US policymakers increasingly see these trends as creating long-term dependencies that could affect supply chains and strategic autonomy.
Why Venezuela and Panama have emerged as early test cases
The competition between the two nations is evident in Venezuela and Panama.
On one hand, China has condemned US sanctions and the use of military power against Nicolas Maduro’s administration, arguing that the US is showing “unilateral bullying” tactics. On the other hand, at a UN Security Council session last December, China’s deputy permanent representative Sun Lei stated that the Beijing administration opposed actions that encroach upon the sovereignty of nations.
Some experts point out that China’s support has been mostly in the form of words, with no forecast of direct military involvement.
Meanwhile, Panama has emerged as a more sensitive flashpoint. Trump has repeatedly argued that China holds excessive influence over the Panama Canal, a strategic chokepoint for global trade. After coming under US pressure, Panama withdrew from the Belt and Road Initiative last year and scaled back high-level engagement with Beijing.
In March last year, a BlackRock-backed consortium announced a deal to acquire control of container ports at either end of the canal from a Hong Kong-based operator that had managed them since 1996. The move was widely seen as aimed at easing US concerns.
Chinese authorities have since pressed for changes that would shift control to Cosco, highlighting how commercial assets have become entangled in strategic rivalry.
How Washington is responding to China’s regional push
The Trump administration has relied on a mix of tariffs, diplomatic pressure and security arguments to counter China’s influence, while keeping trade flows in areas such as agriculture and rare-earth minerals open.
In response to questions on China’s regional posture, the White House has said it is acting to restore American strength at home and abroad.
