China strengthens partnership with Latin America: billions in investments planned!

China strengthens partnership with Latin America: billions in investments planned!

China has announced that it will significantly expand trade relations with the Community of Latin American and Caribbean States (CELAC). At a recent forum in Beijing, Xi Jinping stressed that China is a "good friend and partner" of the region. This marks another step in China's strategy to expand its presence in Latin America and intensify cooperation in various areas. Xi also declared that there are no winners in tariff wars and underlined his commitment to the region with a pledge to increase imports from Latin American and Caribbean countries.

Amid a tense trade conflict with the United States, China and the United States have agreed to a temporary tariff reduction for 90 days, but mistrust remains high. The USA remains the CELAC region's most important trading partner, followed by China. For 2024, Beijing reported a trade volume with the region of 518.4 billion US dollars (approx. 466.8 billion euros).

China and Latin American Integration

China's interest is particularly focused on raw materials in Latin America, such as soybeans from Brazil and lithium from Chile. As part of its New Silk Road initiative, China is investing in infrastructure projects in the region and has already initiated more than 200 infrastructure projects. A prime example is the deep-water port of Chancay in Peru, which opened in November and is operated by China's state-owned shipping company Cosco.

Far from being a short-term development, China-Latin America relations have grown in importance over the course of the 21st century, particularly with the rise of China and the Belt and Road Initiative (BRI). The China-CELAC Forum was founded in 2014 to promote dialogue and cooperation between China and Latin American and Caribbean countries. The forum's methods and structures enable close collaboration.

Current challenges and opportunities

However, in recent years, CELAC has struggled with internal divisions and a lack of consensus, leading to a stalemate between 2018 and 2020. The Bolsonaro government's decision to suspend Brazil's participation in CELAC has further exacerbated uncertainty in regional integration. Following the reactivation of CELAC in 2020 under Mexico's pro tempore presidency, important virtual meetings took place, culminating in 2021 with the VI CELAC Summit in Mexico City.

At the forum, President Gabriel Boric of Chile emphasized the important role of the countries of the Global South in the development and platform of dialogue offered by the China-CELAC Forum. A new action plan covering the period from 2025 to at least 2027 is also expected to structure the cooperation. This could further strengthen the partnership between China and Latin America and create new opportunities for integrated development.

Geopolitical tensions, particularly regarding the Panama Canal, represent a point of conflict between the US and China in Latin America. While US President Trump claims that China has control over the Panama Canal, Beijing rejects this, pointing to further diplomatic challenges.

Overall, it remains to be seen how relations between China and CELAC will develop in the coming years. China's investments and commitment are promising, but regional tensions show that cooperation will not be without challenges.