China and Latin America: Navigating Growth and Frictions in 2024
The year 2024 marked a period of continuity in the growing ties between the People’s Republic of China and Latin America and the Caribbean. Through significant investments, trade agreements, and increasing interest in strategic sectors such as infrastructure, mining, and technology, China expanded its influence, generating both opportunities and tensions across various fronts.
The most significant event of the year was undoubtedly the APEC summit held in Lima last November. Among the 16 heads of state who attended the event, media attention centered on Xi Jinping and the inauguration of the Chancay Multipurpose Port Terminal. During the summit, Xi held bilateral meetings with his counterparts Dina Boluarte, Gabriel Boric, and Joe Biden.
Following the positive trend of recent years, in 2024, China solidified its position as the top trading partner for most countries in the region. The strengthening of trade relations was evident in countries such as Bolivia, which achieved a historic trade surplus in exports to China, as well as in Peru and Nicaragua, which recorded notable increases in their exports. However, most countries in the region still maintain a trade deficit with China, with El Salvador being one of the most extreme cases.
Colombia has taken steps to join the Belt and Road Initiative. Ecuador ratified a Free Trade Agreement (FTA) eliminating tariffs on nearly 5,000 Chinese products. Meanwhile, countries like El Salvador and Honduras have made significant progress toward signing their own trade agreements with China. However, these advancements contrast with some tensions, such as Uruguay’s accusations against Argentina and Brazil of blocking its negotiations for an FTA with China. Another point of contention has been the tariffs imposed on Chinese steel by several countries in the region, reflecting significant protectionism in that sector.
Strategic investments in infrastructure, mining and transportation, have also been on the rise. The Chancay mega-port in Peru, a hub port expected to significantly impact maritime routes between the Asia-Pacific region and South America, was a prominent development. In Bolivia, an agreement with China financed a zinc refinery plant in Oruro. In Brazil, BYD progressed with the construction of an electric vehicle factory, investing $1.1 billion, and Sinovac invested $100 million in vaccine production.
Furthermore, the Chinese state-owned China Nonferrous Trade Co. Ltd acquired the Pitinga mine in the Amazon for $340 million, becoming the owner of Brazil’s largest tin reserve. In Nicaragua, China-funded infrastructure projects included gas storage facilities, emergency response initiatives, and educational development programs. Colombia saw progress in infrastructure projects such as the La Dorada-Chiriguaná corridor, while Mexico and Brazil opened new maritime trade routes.
The lithium industry has also been a key sector for Chinese investments in the region. Highlights include the collaboration between the CBC consortium and Yacimientos de Litio Bolivianos (YLB) to develop a pilot plant in the Salar de Uyuni with a $90 million investment and direct extraction technology. In Argentina, Ganfeng Lithium acquired a 15% stake in the Pastos Grandes project for $70 million, while the Chinese group Hanaq advanced its Doncella project in Salta by obtaining the Environmental Impact Declaration. However, tensions have emerged in this sector, such as Ganfeng Lithium’s legal challenge to cancel concessions in Mexico’s Sonora state.
Politically, China’s relations with countries in the region have strengthened despite existing tensions. For instance, Argentina began the year with strong criticisms of China from newly elected President Javier Milei, only to adopt a more pragmatic tone later, referring to the Asian country as “an interesting partner.” The easing of tensions was evident during the meeting between Milei and Xi Jinping at the G20 summit in Brazil, where the two countries agreed on export protocols for several Argentine agricultural products destined for China.
In Venezuela, China maintained its “non-intervention” stance in the country’s political crisis, exacerbated by the verified electoral fraud by Nicolás Maduro in the July elections. However, high-level bilateral visits increased notably throughout the year, with Vice President Delcy Rodríguez’s official visit to China in December 2024 standing out. This rapprochement could be interpreted as implicit support for the disputed government, a stance that has sparked analysis and debates in diplomatic circles.
China’s influence in the technology and telecommunications sector grew exponentially in 2024, with companies like Huawei playing a central role. In Brazil, the company signed agreements with operators such as Claro and Vivo to expand 5G network coverage in urban and rural areas, emphasizing integration with Industry 4.0 and smart agriculture. In Mexico, Huawei Cloud, the company’s cloud storage branch, has invested over 1.3 billion pesos in infrastructure since 2019.
However, the growth of Huawei and other Chinese information technology companies in the region has been accompanied by debates over sovereignty, security, and the geopolitical implications of this technological dependence, making it one of the most dynamic issues in Sino-Latin American relations. For example, Costa Rica enacted a cybersecurity regulation in 2023 prohibiting Chinese technology providers in telecommunications networks to safeguard data privacy and security. Huawei is still pursuing legal actionagainst the regulation, which it argues lacks technical grounds.
Diplomatically, tensions have increased regarding the official relations some regional countries maintain with Taiwan. Notably, the China-Paraguay-Taiwan triangle saw Beijing urging Paraguay to sever ties with Taiwan under the “One China” policy to ensure soybean imports remain unaffected. Similarly, Guatemala faced significant commercial retaliation, such as product delays at Chinese ports, due to its support for Taiwan.
Tensions between the United States, China, and Mexico over fentanyl trafficking escalated in 2024 amidst mutual accusations and a growing public health crisis in North America. The U.S. has identified China as the primary source of chemical precursors used in opioid production, while China denies these claims, arguing that responsibility lies with U.S. border control and international cooperation. Mexico, a key producer and trafficker of fentanyl to the U.S., has implemented stricter measures against cartels and strengthened cooperation with both nations. However, political dynamics and mutual distrust have hindered joint efforts to tackle this crisis, which continues to claim thousands of lives each year.
Migration issues have also emerged as a challenge. Over the past five years, Mexico experienced an exponential increase in irregular migration of Chinese citizens, rising from 33 detained in 2019 to over 11,000 in the first seven months of 2024. Ecuador suspended its visa exemption agreement with China, citing an “unusual increase in irregular migration flows” of Chinese citizens. In Colombia, the number of Chinese migrants crossing the dangerous Darién jungle on the border with Panama rose from 296 in the 2010-2019 period to over 12,000 by September 2024. Meanwhile, Chile and Panama have targeted and dismantled Chinese migrant trafficking networks. Most Chinese migrants aim for the U.S., driven primarily by limited economic growth opportunities in their home country.
In summary, 2024 was a pivotal year for Sino-Latin American relations, characterized by significant advances in trade, strategic investments, and political cooperation, but also marked by tensions and challenges in areas such as security, migration, and diplomacy. As the region deepens its ties with China, it becomes evident that balancing economic benefits with protecting sovereign interests is crucial to ensuring that this strategic relationship is both beneficial and sustainable in the long term