As the geopolitical influence of the United States contracts under successive waves of nationalist retrenchment, China has strategically advanced into Latin America and the Caribbean (LAC), trying to reshape the region’s diplomatic and economic landscape. Beyond rhetorical commitments to South-South cooperation, Beijing has built an intricate architecture of influence that relies less on regional multilateralism and more on asymmetrical bilateral engagements. This quiet recalibration of power not only challenges the longstanding hemispheric dominance of the United States but also raises critical questions about how sovereignty, policy autonomy, and long-term development in the LAC region may be reconfigured under China’s expanding presence. While its engagements are set in the narratives of cooperation and mutual benefit, the asymmetries of power, finance, and influence are glaring.
China joined institutions like the Organization of American States (OAS) or partnered with the Community of Latin American and Caribbean States (CELAC), but the US’s predominance in these organizations curtailed its influence. However, the relationship has taken on a multidimensional character since. With China offering an alternative model of development, the question is, will the region pivot east, and how is China encouraging multiple strategic hedging in its favor?
Engagement through the China-CELAC Forum
China positions the China–CELAC Forum as its primary multilateral platform for engaging Latin America and the Caribbean. Since its launch under President Xi Jinping at the 2014 summit in Brazil, the Forum has served as the central pillar of Beijing’s regional multilateral diplomacy. While the relationship between China and the region has been dominated by economic interests such as exports and financing for infrastructure projects, the 2015-19 period saw an increase in the soft power outreach. While narratives spin this as a cultural charm, it is a part of a calculated effort to entrench long-term influence in the region. President Xi, recognizing this, committed in 2016 to increase the provision of training opportunities for over 10,000 Latin Americans over three years. In the 2015–2019 Action Plan, special emphasis was placed on soft power instruments, which included 6,000 government scholarships and 400 vocational master’s programs, as well as cultural events like the 2016 Year of Cultural Exchange. Confucius Institutes, with 39 centers across 20 countries, extend China’s ideological reach into classrooms, civil society, and future policymaking circles.
These initiatives are a strategic intent to have a cadre of local players familiar with and potentially sympathetic to Chinese norms, governance models, and development narratives. However, the 2019–2021 and 2022–2024 plans marked a shift in focus, with significantly less emphasis on educational cooperation and a renewed prioritization of high-tech sectors, port development, and digital and financial infrastructure. For example, the joint CELAC–China Action Plan of 2021 offered a US$9 billion regional credit line for infrastructure, poverty reduction, and digital transformation. The plan explicitly promotes China’s financial tools, like Panda Bonds, and reflects Beijing’s broader attempt at internationalizing the RMB. Despite the high-level nature of the Forum, its outcomes depend largely on bilateral deals. Summits showcase Chinese priorities of BRI, development aid, and technology transfer, but do not by themselves alter domestic law or budgets. Implementation has typically depended on separate bilateral agreements. For instance, Argentina’s decision to join China’s BRI was sealed in a bilateral agreement during a state visit in February 2022, a commitment not mandated by any CELAC declaration. Similarly, China’s $9 billion credit line under the action plan was framed as a regional initiative, but its implementation has been in the form of bilateral lending. For example, infrastructure and social housing loans to Nicaragua, which China signed the FTA on August 31, 2023.
In the sectors of education and civil society, the pattern persists. The Action Plan’s cultural provisions put forth China’s broader GCI. But the actual implementation, such as the opening of Confucius Institutes in countries like Peru or Argentina, is handled on a country-by-country basis. Thus, while CELAC provides a forum for signalling mutual intent, the concrete influence on domestic policies has so far come via separate bilateral projects and financing.
Engagement with UNASUR and MERCOSUR
China’s role in other South American regional organizations has generally been peripheral, and this is not an oversight. The Union of South American Nations (UNASUR) was launched in 2008, with furthering regional autonomy attracting little formal Chinese participation. It was never institutionalized enough for Beijing to embed itself or seek any observer status. Rather, China went over the regional architecture and preferred to work directly with individual UNASUR members (Venezuela, Bolivia, or Ecuador) through bilateral loans. Likewise, China has maintained formal and informal dialogues with MERCOSUR and UNASUR member states, but these have produced only general memoranda. Bilateralism has prevailed even in the face of high-level exchanges for Beijing.
China’s major capital-intensive projects in Brazil for railways and nuclear energy were negotiated bilaterally rather than through the bloc’s apparatus. Even attempts to open trade negotiations with Uruguay encountered friction, as MERCOSUR requires consensus among its members. This meant that Beijing’s talks with Uruguay were effectively blocked by opposition from other member states, most notably Argentina. These institutional constraints within MERCOSUR further discouraged Beijing from seeking deeper bloc-level engagement. The dynamics show China’s engagement with sub-regional blocs in the region gives it more flexible engagements. It has often preferred parallel alternatives such as the BRI or China-led development funds over formal cooperation via UNASUR or similar institutions.
Influence on Domestic Policies: Case Examples
Beijing’s impact on domestic policies in the LAC is a deliberate model that sidesteps regional scrutiny. A striking example of China’s desire to shape the regional order on terms that maximize bilateral dependency is digital surveillance and security technology. Ecuador’s nationwide ECU-911 command center illustrates this, as it was funded by a 2012 Chinese loan of $240 million and built entirely by Chinese companies. The system uses Chinese-built thermal cameras, drones, facial-recognition AI, and even an Xi-inaugurated AI research lab. This transformation of Ecuadorian public safety policy also came through a bilateral loan agreement, not via any regional forum. Likewise, in telecommunications, Brazil’s decision in 2023 to include Chinese firm Huawei in its 5G rollout reveals similar dynamics. While this is a commercial decision, it does not exist in a vacuum and follows years of China’s strategy from vaccine diplomacy to investments in energy and agriculture.
In urban development, Nicaragua offers another example. Its China-backed housing program in 2023 to build over 12,000 subsidized homes emerged soon after Managua cut ties with Taiwan. These are rewards for their diplomatic realignment, framed as aids to the country, and hold high symbolic value. This again proves that Chinese development aid arrives where it is bilaterally requested, not from regional directives.
China is replicating its familiar playbook, where it consolidates bilateral dependency and avoids regional frameworks if they are seen as diluting China’s footprint. The roadmap begins with economic engagement supported by soft power tools, and later, if and when the conditions allow, come the military establishments. This is evident in China’s growing control over ports, including the latest linking of Chongqing Municipality with Peru’s Chancay Port and its involvement in over 30 ports across the region. In 2022 alone, Beijing has invested approximately 9 billion dollars in the region, and this outpaces its investments in the US or EU in that period. Diplomatic ties have also reached an all-time high, with 2023 seeing more heads of state from the LAC visiting China than ever before.
China’s multilateral engagement supplements its bilateral diplomacy; it uses forums like CELAC to announce and coordinate broad initiatives, but it influences specific reforms and projects through government-to-government agreements and financial partnerships rather than through binding regional mechanisms. For the region, China is now a key partner in its multiple hedging strategy, and as for Beijing, it is about placing itself where it now counts.
