By Shashank Pattekar, International Banker
On May 13, the Fourth Ministerial Meeting of the China-CELAC (Community of Latin American and Caribbean States) Forum took place, in which Beijing played host to government representatives of 33 countries of the CELAC region. With a raft of development initiatives agreed between the two parties and against the backdrop of a United States-initiated trade war that has adversely impacted much of the trading world, including Latin America, China continues to advance its economic goals in a hotly contested region, increasingly so at the expense of its superpower rival.
Among notable goodies unveiled by China during the summit were a credit line of 66 billion yuan (US$9.15 billion) for the region and a visa-free travel policy for LAC (Latin America and the Caribbean) countries. Beijing also pledged to scale up cooperation on several key security issues, including cybersecurity, counterterrorism, anti-corruption, drug control and combating international organised crime, as well as help countries across the continent “strive to maintain regional security and stability” through the implementation of “law enforcement training projects” and “equipment assistance”.
“We ride the tide of progress together to pursue win-win cooperation,” China’s President Xi Jinping declared during his keynote speech at the summit, noting that the trend of economic globalisation had allowed China and LAC countries to deepen cooperation in trade, investment, finance, science and technology, infrastructure and many other fields. China’s president also revealed that trade between China and LAC countries in 2024 exceeded $500 billion for the first time, meaning that China is likely to have overtaken the United States as Latin America’s largest trading partner, and that trade had increased by more than 40 times since the beginning of this century. Beijing will also encourage Chinese companies to boost their investments in Latin America, China’s president acknowledged.
“Under the framework of high-quality Belt and Road [BRI] cooperation, the two sides have implemented more than 200 infrastructure projects, creating over a million jobs,” Xi Jinping added. “The China-LAC satellite cooperation program has set a model for high-tech South-South cooperation. The inauguration of Chancay Port in Peru has established a new land-and-sea connectivity link between Asia and Latin America. China has signed free trade agreements with Chile, Peru, Costa Rica, Ecuador, and Nicaragua.”
Such developments come at a time when China’s main economic rival in the region, the United States, has embarked on a brutal trade war with virtually the entire trading world, one that has not only frayed the US-China trading relationship but also played suitably into China’s economic ambitions in Latin America. President Xi Jinping was only too keen to reiterate his government’s position at the forum that there would be no winners in this trade war and that “bullying or hegemonism only leads to self-isolation”.
Despite agreeing with the US to cut sky-high tariffs on both sides for 90 days, moreover, the Chinese president confirmed that his country stood ready to “join hands” with Latin American countries “in the face of seething undercurrents of pure political and bloc confrontation and the surging tide of unilateralism and protectionism”. The president also reminded the summit that China and LAC countries were members of the Global South and thus shared such common goals as independence, autonomy, development, revitalisation, fairness and justice.
“What the people of Latin America and the Caribbean seek are independence and self-determination, not the so-called new Monroe Doctrine,” China’s assistant foreign minister, Miao Deyu, was additionally quoted as saying by Chinese state media in reference to the principle adopted by the US government in the early 1800s to exert considerable American dominion over much of the Western Hemisphere. Some have suggested that the Trump Administration is attempting to revive this approach to foreign policy.
Competition between China and the US over influence in Latin America is starting to sizzle, with the occasional confrontational flashpoint surfacing, as is perhaps best exemplified by the ongoing dispute over the Panama Canal. Trump has been determined to wrest control of the canal from China and has been applying much pressure on CK Hutchison Holdings, the Hong Kong-based conglomerate that owns and operates ports at both ends of the strategically important waterway. This pressure resulted in CK Hutchison agreeing to sell the ports in March to a BlackRock-led consortium in a deal worth $22.8 billion. In response, Beijing has exerted its own weight on CK Hutchison, with Chinese antitrust authorities opening an investigation into the proposed deal, which has not yet been finalised. US pressure has also prompted Panama to agree to exit China’s Belt and Road Initiative (BRI).
While one Latin American country looks to be on the way out of China’s flagship global infrastructure-development initiative, another is on the verge of signing up, with Colombia having signed a joint cooperation plan for the BRI at the China-CELAC Forum. Colombia thus becomes the latest of more than 20 nations in the region and more than 150 nations worldwide to join the BRI, which was launched by Xi Jinping in 2013 to resurrect China’s ancient trade routes and expand global economic cooperation through infrastructure investments.
During his visit to Beijing, Colombia’s president, Gustavo Petro, hailed his country’s thriving economic relationship with China. “This photo seeks to revive multilateralism, for Europe to gain independence, for Slavic peoples to speak directly to each other, for Gaza to be filled with food rather than bombs, for humanity’s main objective today to be not war but decarbonizing the economy for life,” Petro posted on X, in reference to a picture taken of China’s president alongside several CELAC leaders. “That America goes from Alaska to Tierra del Fuego, and that its main objective today is not to expel migrants, but to make the clean energy potential of the South become a reality to achieve a 100 percent clean matrix in North America, a decisive fact to stop global warming and make life flourish.”
Colombia’s foreign minister, Laura Sarabia, described the move as the “boldest step in decades” for the country. “The signing of this cooperation plan opens up a horizon of endless opportunities in trade, investment, and tourism. There is no turning back: Colombia is resolutely opening up to the world,” Sarabia posted on X.
Given its strong historic ties with the US, moreover, Colombia’s decision to join the BRI underscores the willingness and ability that Latin American countries increasingly possess for diversifying their economic exposures between the world’s two economic heavyweights, which, in turn, should usher in more opportunities for growth and development in the region. It also further underlines the growing trend of multipolarity observed across the world, with countries and regions now able to engage economically with several leading economies, such as China, India and Russia, instead of depending solely on the United States.
It is not surprising that the CELAC side has been equally effusive in its praise of the flourishing economic relationship it has cultivated with China. “It is an honour to participate in the China-CELAC Forum in Beijing, a space that renews the dialogue between the political community of Latin American, Caribbean countries and the People’s Republic of China,” Chilean President Gabriel Boric posted on X during the summit. “The path of cooperation with China is a great opportunity to move forward from a perspective of equality, mutual benefit, and shared development.”
“Our relationship with China is very strategic. We want to learn and to attract more investment to Brazil as well. We want more railways, more subways, more technology. We want artificial intelligence,” said Brazil’s leader, Luiz Inácio Lula da Silva (popularly known as Lula), who arrived in Beijing on May 10 for a five-day state visit. “We want everything they can share with us—and the correct word is ‘share,’ because we need to learn to work together so that this relationship can bear the fruits we need.”
Lula also reportedly confirmed at the time that Chinese companies would invest a hefty R$27 billion ($4.8 billion) in Brazil, including R$6 billion of investments by automobile manufacturer Great Wall Motor Company (GWM) and the acquisition of a copper mine in the northeastern Brazilian state of Alagoas by Chinese state-owned mining enterprise Baiyin Nonferrous Group (BNMC).
Aside from political representatives, meanwhile, Latin America’s corporate world also projects enticing opportunities arising from the intensifying China-US rivalry in the region. “If Latin America plays its cards well, I think [it] could benefit from this volatility,” Marcos Galperin, chief executive officer and founder of Mercado Libre (often called the Amazon of Latin America), recently told CNBC. Galperin said he saw a strong likelihood of a “permanent shift” in US-China trade relations. “I don’t know how it’s going to end, but I think the situation where everything was manufactured in China and was consumed in the US, and China bought T-bills and in a way financed that, I think that dynamic is kind of over.”