In November of last year, Chinese President Xi Jinping was in Peru, cutting the ribbon on the $1.3 billion Chancay deep-water port. As the first \u201csmart port\u201d in South America\u2014boasting a network of highways, railways, data cables and power grids\u2014Chancay was built by Chinese state-owned shipping giant COSCO, which also operates the property.<\/p>\n\n\n\n
Beijing claims the port will generate 8,000 jobs and slash shipping costs between China and South America by 20%. It will also cut roughly 10 days off transportation times,<\/a> giving China an edge in trade and supply chains across the hemisphere.<\/p>\n\n\n\n The Center for Strategic and International Studies (CSIS) estimates that, once fully expanded, Chancay could handle 3.5 million containers per year, potentially making it the third-largest port in Latin America,<\/a> and the largest controlled entirely by a Chinese state-owned enterprise.<\/p>\n\n\n\n Past performance is not indicative of future results.<\/strong><\/p>\n\n\n\n The CSIS, in fact, has identified 37 seaports<\/a> in LAC with ties to Chinese companies. For comparison\u2019s sake, the U.S. does not operate any ports in the region.<\/p>\n\n\n\n How did we get here? After joining the World Trade Organization (WTO) in 2001, China\u2019s trade with Latin America grew an average of 31% a year for approximately the next decade. In 2024, bilateral trade between the two regions hit $518 billion, overtaking the U.S. as South America\u2019s top trading partner. Analysts expect that figure to reach $700 billion by 2035.<\/a> China is the largest buyer of Argentina\u2019s lithium, Venezuela\u2019s crude and Brazil\u2019s soybeans and iron ore.<\/p>\n\n\n\n Past performance is not indicative of future results.<\/strong><\/p>\n\n\n\n The world\u2019s second-largest economy is also the main builder of infrastructure, from metro stations in Bogot\u00e1 and Mexico City to hydroelectric dams in Ecuador. In just two decades, Beijing has financed over $286 billion in Latin American projects,<\/a> approaching its total investment in Africa.<\/p>\n\n\n\n One such example\u2014besides the Chancay seaport\u2014is Chile\u2019s new China-Chile Express submarine cable,<\/a> which aims to link the Pacific coast directly to Hong Kong. Some experts warn, however, that the project could exposure the continent to China\u2019s 2017 Cybersecurity Law, which could compel companies to cooperate with Chinese state intelligence.<\/p>\n\n\n\n For the U.S., I believe this is as much a crisis of neglect as it is of strategy.<\/p>\n\n\n\n While Washington has focused more on counterterrorism and short-term aid programs in LAC, China has played the long game, financing ports, railways and power grids. This in turn has helped foster goodwill and shaped its relationship with the region for decades and perhaps generations to come.<\/p>\n\n\n\n Between 2000 and 2021, Beijing financed an estimated $1.5 trillion worth of overseas development projects, 85% of them as loans rather than aid, making the country the largest official creditor to emerging markets.<\/a><\/p>\n\n\n\n In contrast, total U.S. foreign assistance, which has averaged around 1% of the federal budget, has barely kept pace with inflation (and, indeed, has been gutted by the second Trump administration.)<\/p>\n\n\n\n This has allowed China to present itself as the only offer on the table. Latin America\u2019s infrastructure deficit is enormous at an estimated $180 billion a year through 2030,<\/a> according to the Inter-American Development Bank (IDB). As the Heritage Foundation\u2019s Michael Cummingham warned last year:<\/a> \u201cIt\u2019s not like Washington gave [Latin America] a better alternative\u2026 The region\u2019s demand for infrastructure makes it ripe for the picking.\u201d<\/p>\n\n\n\n Trade is only part of the story. China is expanding its military and security presence in the region too. China now operates or co-manages at least eight ground stations in Latin America,<\/a> including deep-space tracking centers in Argentina, Venezuela, Bolivia, Chile and Brazil. These stations provide the People\u2019s Liberation Army (PLA) with global telemetry coverage and real-time spatial data.<\/p>\n\n\n\n Under the Global Security Initiative (GSI), proposed by Xi in 2022, Beijing has shifted toward domestic security, supplying tactical gear and facial-recognition systems to police forces from Panama to Ecuador. Huawei-built \u201cSafe City\u201d networks can now be found in more than 35 Latin American municipalities,<\/a> integrating thousands of cameras and emergency centers under Chinese-managed software.<\/p>\n\n\n\n Even the BRI blurs the line between civilian and military use. Peru\u2019s Chancay Port could serve future naval logistics for the PLA, while the Espacio Lejano space station in Neuqu\u00e9n, Argentina, already supports China\u2019s hypersonic and satellite-tracking capabilities.<\/p>\n\n\n\n All of this coincides with the Chinese yuan\u2019s ascent as a foreign reserve asset and settlement currency. According to the Bank for International Settlements (BIS), the yuan now accounts for 8.5% of global transactions,<\/a> up from 7% just three years ago and closing in on the British pound\u2019s 10.2% share. The U.S. dollar remains the global leader by far, representing nearly 90% of all transactions, but the yuan has made impressive strides, quadrupling its share of total transactions since 2013.<\/p>\n\n\n\n Past performance is not indicative of future results.<\/strong><\/p>\n\n\n\n As The Economist <\/em>put it, China\u2019s leader\u2019s \u201csense an epic opportunity.\u201d Fiscal deficits and political gridlock in the U.S. have shaken confidence in the greenback, which had its worst start to a year since 1973;<\/a> meanwhile, Beijing is pushing yuan-denominated trade through its Belt and Road partners.<\/p>\n\n\n\n China\u2019s strategy goes far beyond infrastructure projects, of course. It seeks to gain a lasting foothold in the Global South, with the BRI as its Trojan Horse.<\/p>\n\n\n\n Last week, Beijing announced it would further tighten export rules on rare earths, minerals that are vital to semiconductors and defense systems. This prompted President Trump to threaten sweeping new tariffs.<\/p>\n\n\n\n At the same time, the People\u2019s Bank of China logged its 11th consecutive month of gold purchases,<\/a> extending its push to de-dollarize and insulate its economy from U.S. sanctions and currency shocks.<\/p>\n\n\n\n Taken together, these moves reveal China\u2019s imperial ambitions, which include a network of ports, power grids and rails\u2014all designed not only to move goods but also exert influence.<\/p>\n\n\n\n —<\/p>\n\n\n\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/10\/COMM-china-latm-port-10102025.png\")
<\/figure>\n\n\n\nChina\u2019s Influence Reaches Every Corner of the Continent<\/strong><\/h3>\n\n\n\n
![\"China](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/10\/COMM-china-trading-partner-10102025.png\")
<\/figure>\n\n\n\n$180 Billion-Per-Year Infrastructure Spending Gap<\/strong><\/h3>\n\n\n\n
China\u2019s Military and Security Presence<\/strong><\/h3>\n\n\n\n
The Yuan\u2019s Ascent<\/strong><\/h3>\n\n\n\n
![\"the](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/10\/COMM-yuan-has-quadrupled-10102025.png\")
<\/figure>\n\n\n\nA Lasting Foothold in the Global South<\/strong><\/h3>\n\n\n\n