Growing Chinese involvement in Latin America is primarily aimed at creating economic opportunities for the country, while at the same time expanding its influence in local politics and security matters, according to US experts on Chinese-Latin American relations.

Speaking to the House Armed Services Committee last week, Admiral Craig Faller, the commander of US Southern Command, warned that China "seeks global dominance" and is increasingly active across Latin America, including through port deals, financial loans, IT infrastructure and exchange programs with regional militaries.

In an interview with LPO, Margaret Myers, the director of the Asia and Latin America Program at the Washington DC-based Inter-American Dialogue, said that while China has been involved in the region for decades, its presence has accelerated in recent years.

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This, she added, is partly a result of the country seeking to create new markets for Chinese products and obtain the resources it needs, ranging from oil and gas to soy and other agricultural products.

"There has also been a sort of internalization of Chinese companies and helping Chinese companies to become international actors and compete internationally with other companies in a wide range of sectors, but especially those with which China has a natural competitive advantage," she said. "We see these things sort of underpin the relationship and drive a lot of the engagement."

Currently, China is South America's most significant trading partner. In 2019, for example, Chinese companies invested a total of $12.8 billion in Latin America - much of it in physical infrastructure - which represented a 16.5% increase from the prior year.

Across the region, 19 governments in Latin America and the Caribbean have announced projects as part of China's $1 trillion Belt and Road Initiative (BRI), including a $3 billion port in Peru. 

China is South America's most significant trading partner. In 2019, for example, Chinese companies invested a total of $12.8 billion in Latin America - much of it in physical infrastructure - which represented a 16.5% increase from the prior year.

These investments, Myers added, are now increasingly diversifying into technology.

"China continues to be viewed as the country to go to for large-scale infrastructure and public works projects. New linkages are being built. Chinese companies are efficient and competitive," she said. "Now you're talking about computers, cloud computing facilities, artificial intelligence technologies. There's more competition between China and other companies in this space that didn't exist before."

In the past, US officials have warned countries in Latin America that are planning 5G networks that using the Chinese-firm Huawei - which has substantial links to the Chinese government -might pose a threat to national sovereignty over critical technology and infrastructure.

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In a separate interview with LPO, Evan Ellis, a research professor of Latin American studies at the US Army War College Strategic Studies Institute - and who has advised the US Congress on Chinese activities in the region - said that from a Chinese perspective, there is little distinction between economic, political and security objectives. 

China continues to be viewed as the country to go to for large-scale infrastructure and public works projects. New linkages are being built. Chinese companies are efficient and competitive

"The point isn't about getting political influence. The point is about how economic position creates other options, and those other options reinforce economic influence," he said. "For China, it's all about the money. But China wants to be in these technology sectors because they are strategically important."

Ellis explained that having a strong presence in Latin American technology sectors gives China the opportunity to obtain valuable intelligence - such as compromising data on leaders and trade secrets - that can, in turn, allow the country and its companies to gain an economic advantage.

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"These things can help the MSS (Ministry of State Security) obtain competitor technology or obtain information about competitor's bids when you're trying to get the deal for your own company," he said. "There is an endless stream of evidence of Chinese security services supporting their industrial policy through systematic technology theft."

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Additionally, Ellis said that potential Chinese access to Latin America data "is fundamentally undermining the ability of Latin American states to make sovereign decisions.

"It's undermining the ability of corporations to operate in Latin America when the core infrastructure that they have to use for their own phone calls for example, is vulnerable because of the choices of the states in which they are operating," he added.

 For China, it's all about the money. But China wants to be in these technology sectors because they are strategically important

Experts have noted that the Covid-19 pandemic created a clear opportunity for China to expand its activities in the region. Argentina President Alberto Fernández, for example, in January thanked China for "supporting Argentina's fight against Covid-19" and "building a community with a shared future for mankind."

"This has been a very clear opportunity for China," Myers said. "In the early months, China was providing PPE mostly in an effort to ensure a generally positive view of China among populations in Latin America. It was sort of a PR strategy."

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"Now, over many months of experimentation in different approaches, China sees this as a very clear opening and opportunity," she added. "China's policy in Latin America is a part of a dedication to the ‘global south' in a wide range of areas, including in a medical capacity. This is an opportunity to deliver."

These economic policies, Myers added, also give China greater leverage to pressure Latin America countries to switch their diplomatic recognition from Taiwan to the government in Beijing. Of the 15 countries in the world that still do not, nine are in Latin America and the Caribbean.

"I think it's a primary objective. China sees a lot of this as linked. Economic engagement and influence will translate to other sorts of influence," she said. "I don't think we can distinguish the economic and political objectives from one another so clearly."