Amid a temporary deescalation of trade tensions with the United States, Beijing looks to continue building its influence in South America.
Communist China is moving to strengthen its ties with Latin America, inking several new diplomatic and economic agreements with nations there in recent weeks.
Speaking at a forum for Chinese and Latin American leaders in Beijing earlier this month, Chinese Communist Party (CCP) leader Xi Jinping said his regime stood ready to “join hands” with Latin America through political, economic, and security exchanges.
In a thinly veiled swipe at current U.S. trade policy, Xi said that there were “no winners in tariff wars or trade wars” and sought to position trade with China as a key means of diversifying supply chains away from the United States.
To that end, Xi promised to “stand united” with Latin American nations, pledging to boost imports, encourage Chinese companies to increase their investments there, and expand cooperation on clean energy, 5G communications, and artificial intelligence.
Beijing has since moved to initiate a suite of interlocking initiatives that aim to systematically build out China’s presence in Latin America and increase its political sway over the South American continent and the Caribbean.
CCP Offers Billions in New Credit
Key to Xi’s efforts was the announcement of a new, $9.2 billion line of credit to support infrastructure investment in Latin American and Caribbean nations.
While the funding package is smaller than similar initiatives in recent years due to China’s own slowing economy, the move nevertheless represents a major push toward expanding the CCP’s influence throughout the region via financial ties.
Notably, the credit line will be denominated exclusively in Chinese yuan, thereby encouraging Latin American nations to diversify their debts away from the U.S. dollar.
Just days after the announcement of the credit line, Colombia’s government also announced it had applied to join the China-based New Development Bank, as the nation seeks ways to balance losses from cuts to U.S. foreign aid.
Colombian President Gustavo Petro said that he was excited by the possibility that the bank might finance a new 75-mile canal connecting Colombia’s Atlantic and Pacific Ocean coastlines, which he said could position the country at the “heart” of trade between South America and Asia, and provide an alternative shipping line to the Panama Canal.
The New Development Bank was established a decade ago as a project of Brazil, Russia, India, China, and South Africa, the so-called BRICS nations, and intended to counter U.S. dollar-led institutions like the World Bank and Inter-American Development Bank.
Frank Xie, business professor at the University of South Carolina, told The Epoch Times that such investments were likely aimed at creating an alternative trans-oceanic trade route now that the Trump administration was attempting to assert more economic control over the Panama Canal.
“The CCP obviously still wants to support the trans-oceanic railway and connect the Atlantic and Pacific Oceans through land transportation in South America at this time, and wants to bypass the Panama Canal,” he said. “I think this is part of the CCP’s global strategy.”
