Geopolitically, many in China long considered Latin America a distant region—almost “the end of the Earth.” That perception has changed dramatically. Over the past two decades, a steadily warming relationship, driven largely by expanding commercial ties, has taken shape.
Amid this shift, a central debate in the West is whether China’s growing presence represents a deliberate geopolitical campaign or an organic, pragmatic response to unmet economic demand in the region.
“These were not primarily geopolitical choices, but pragmatic economic decisions driven by local needs and opportunities,” said Francisco Urdinez, an associate professor at the Pontifical Catholic University of Chile and author of Economic Displacement: China and the End of U.S. Primacy in Latin America, in an interview with the author. His research shows that governments across the region had been seeking partners capable of financing large-scale projects quickly, and China proved willing and able to meet those demands.
China is now the top trading partner for several South American economies and has emerged as a major source of long-term financing for infrastructure projects that Western lenders have been reluctant or unable to support.
Between the early 2000s and 2020, U.S. investment and development finance in Latin America stagnated as Washington focused on the Middle East and domestic priorities. During the same period, Chinese trade, investment and credit surged—particularly in energy, transportation and extractive industries.
In Argentina, Chinese policy banks helped finance multi-billion-dollar hydroelectric dams in Patagonia, projects designed to ease chronic energy shortages that constrained economic growth. In Peru, a deep-water port at Chancay, built by Chinese shipping giant COSCO, is expected to become South America’s largest Pacific hub, shortening shipping times to Asia and reshaping regional trade routes.
According to Urdinez, both cases reveal common patterns. Most importantly, local development needs were not being addressed by the U.S. or other Western countries. As a result, “Latin American actors—whether national governments or subnational entities—actively exercised agency in seeking out and shaping these partnerships with China,” he said.
Unlike Western development lenders, Chinese banks have often offered financing with fewer political conditions and faster disbursement, an attractive option for countries facing urgent infrastructure deficits. Urdinez argues in his book that “influence in the region is built primarily on economic foundations.” China’s approach has relied heavily on commercial actors rather than military or security alliances. Chinese firms typically enter markets through joint ventures, long-term supply contracts, or public tenders, while Beijing has avoided formal defense commitments in the region. This has allowed Latin American leaders to frame engagement with China as compatible with continued ties to the U.S.
That balancing act, however, is becoming increasingly difficult.
Washington has signaled a renewed focus on Latin America. In the newly released Pentagon 2026 National Defense Strategy, the document states that the U.S. “will actively and fearlessly defend America’s interests throughout the Western Hemisphere,” describing this posture as “the Trump Corollary to the Monroe Doctrine.”
The Monroe Doctrine, articulated in 1823, established the Western Hemisphere as a U.S. sphere of influence by excluding European powers and effectively designating the region as America’s strategic “backyard.”
Under the policy, U.S. officials have increasingly warned that ports, telecommunications networks and energy assets built by Chinese firms could pose national security risks.
“This is an impossible position that will likely lead to regional fragmentation,” Urdinez said. “Some countries—particularly smaller Central American and Caribbean nations—may be forced or choose to align more closely with the U.S., while larger South American countries, where economic displacement is already structural, are likely to maintain or even deepen ties with China despite U.S. pressure.”
As the U.S. seeks to reassert its role in the hemisphere, analysts argue that the real challenge lies in offering credible economic alternatives rather than relying on political or security pressure. Without sustained investment and expanded market access, they warn, efforts to counter China’s influence are likely to ring hollow.
Warning that great-power competition risks overriding local interests, Urdinez said, “Latin America’s primary need is development, not geopolitical alignment. Forcing countries to choose sides diverts resources and attention from addressing poverty, inequality, infrastructure gaps, and climate challenges. It creates instability and resentment.” –The Daily Mail-Beijing Review news exchange item
