Chinese investment in Latin America will be selective

Significance

Chinese loans for large-scale infrastructure have largely stopped since 2019 and are unlikely to recover due to repayment problems and environmental concerns. Chinese corporations intend to expand in the region but prioritise profitability and access to key resources over political considerations when selecting projects.

Impacts

• Chinese corporations will consider reputational and political risk when choosing projects in Latin America.
• Latin American governments of different ideological orientations will continue to pursue closer ties with Beijing.
• US pressure on Latin America to reduce Chinese presence in strategic sectors will persist, but it will struggle to provide alternatives.