China sets a new record with BRI expansion, yet Latin America experiences shrinking involvement

China-Latin America Relations: Shifting Focus and Record Investments

In a significant development, China has continued to invest in coal despite President Xi Jinping's 2021 pledge to cut external financing for this energy source. This is just one aspect of the dynamic relationship between China and Latin America, a relationship that remains solid and is marked by mutual interest and growing investments.

The scale and importance of the relations were evident at the summit between China and the countries of Latin America and the Caribbean held in Beijing in May. During this summit, President Xi announced $10 billion in credits for the region. This announcement came amidst a period of record investments, with the first half of 2025 seeing the highest volume of deals under the Belt and Road Initiative (BRI), totaling $123 billion.

The electric vehicle sector is a new area of focus for China in its relationship with Latin America. Companies like BYD, GWM, and Chery have set up factories in countries like Brazil, with Chinese clean tech manufacturers investing a record $9.7 billion in green energy, such as wind and solar, during the same period.

Brazil, the main commercial partner of China in the region, received high investments from Chinese companies in the production of electric vehicles, wind turbines, electric grid infrastructure, and controversially, in the oil sector. South America exports large volumes of soy, copper, lithium, iron ore, and oil to support China's industrial economy.

China is also showing interest in Latin America's role as a global supplier of essential minerals such as lithium, copper, and rare earths. Costa Rica, with its pioneering policies on clean mobility, is attracting growing interest from Chinese exporters of parts and equipment.

However, it's not all about energy and minerals. The energy sector totaled $42 billion, the highest in a semester since the BRI began in 2013, with oil and gas leading at $30 billion. Meanwhile, large loans from Chinese state banks that marked the BRI in the 2010s have fallen to almost zero, causing large infrastructure projects funded by the initiative to dwindle.

Despite this shift, Chinese investment in the region is not decreasing but rather shifting towards new areas of focus, according to analysts. This is evident in the electric vehicle sector and the investment in green energy.

The BRI has expanded significantly, with around 150 countries having joined the initiative. The new record was driven by Africa, Central Asia, and the Middle East, which together concentrate more than two-thirds of the total invested by mid-2025.

However, not all countries in Latin America are part of the BRI. The first Latin American country to withdraw from the Belt and Road Initiative in 2025 was Panama.

Despite this, analysts agree that the relationship between China and Latin America remains solid, with the region at the center of interest of Chinese investors and other actors, especially in trade. China is the main supplier of agricultural products, minerals that fueled China's domestic infrastructure development, and now drive its high-tech industries for Latin American countries. In 2024, China's trade with Latin America totaled $518 billion, making China the second-largest commercial partner of Latin America and the largest of South America.

In conclusion, the relationship between China and Latin America is evolving, with a shift towards new areas of focus such as the electric vehicle sector and green energy. Despite this, the region remains an important partner for China, with mutual interests in trade, energy, and essential minerals.

China sets a new record with BRI expansion, yet Latin America experiences shrinking involvement