[Salon] US-China Competition in Latin America: A New Strategic Frontier - Guest Post by Leon Hadar

e9ed42d319d1bd219bf9beee48b37e6086f57c5b71f778fbdc678861e350d329.png US-China rivalry in Latin America: a race for influence businesstimes.com.sg  US-China Competition in Latin America: A New Strategic Frontier By Leon Hadar Latin America has emerged as an unexpected battleground in the broader US-China strategic competition, transforming what was once considered Washington's "backyard" into contested geopolitical terrain. This shift reflects not only China's global ambitions but also the changing dynamics of hemispheric influence in the 21st century. China's Economic Footprint Over the past two decades, China has fundamentally altered its relationship with Latin America. Trade between China and the region reached a record high of $518.47 billion in 2024, up 6 percent year-on-year, according to China's Ministry of Commerce. This represents a dramatic increase from roughly $12 billion in 2000, making China the top trading partner for several South American nations including Brazil, Chile, and Peru. Chinese investments have poured into critical sectors: infrastructure projects under the Belt and Road Initiative (to which 21 of the 31 countries in the region have now signed on), mining operations for lithium and copper essential to the energy transition, agricultural commodities, and telecommunications networks. This economic engagement has given Beijing significant leverage. Countries facing fiscal constraints or infrastructure deficits have found Chinese financing appealing, particularly when it comes with fewer governance conditions than traditional Western lenders. The construction of ports, highways, and energy facilities by Chinese state-owned enterprises has created dependencies that extend beyond mere economics into the realm of strategic influence. The Chancay Port: A Gateway to the Pacific The November 2024 inauguration of the Chancay megaport in Peru exemplifies China's strategic infrastructure approach in the region. Located 80 kilometers north of Lima, this $1.3 billion Chinese-funded facility represents South America's first smart and green deepwater port capable of accommodating ultra-large container vessels. Operated by China's state-owned COSCO Shipping (which holds a 60 percent stake), the port cuts shipping times between China and Peru from 35 days to just 23 days—a reduction of nearly two weeks—and is expected to reduce logistics costs by over 20 percent. The port's strategic significance extends beyond Peru. It is designed to serve as a regional hub for South America, potentially facilitating trade from landlocked countries like Bolivia and even Brazil, where discussions are underway about a transcontinental railway connecting Chancay to Brazil's Atlantic coast. The facility features cutting-edge automation with unmanned cranes and Huawei 5G technology, and is expected to generate $4.5 billion in annual revenue while creating more than 8,000 direct jobs. However, Chancay has raised alarm bells in Washington. US military officials have expressed concerns about the port's potential dual civilian-military use. The facility gives China a significant foothold on South America's Pacific coast and potentially enhances Beijing's ability to project power in the Western Hemisphere, complicating US strategic calculations particularly regarding potential conflicts in the Indo-Pacific. The US Response: Between Neglect and Renewal For years, US engagement with Latin America was characterized by what many in the region perceived as benign neglect. Washington's attention repeatedly shifted elsewhere—to the Middle East, to Asia, to Europe—leaving Latin American nations feeling undervalued despite geographic proximity and historical ties. This created an opening that Beijing exploited with patient, systematic engagement. The United States has recently attempted to revitalize its hemispheric strategy. US Southern Command's 2024 and 2025 posture statements have explicitly identified China as the most concerning threat in the region. Admiral Alvin Holsey, SOUTHCOM's commander, assessed in February 2025 that "the actions of nations such as China and Russia" represent the primary challenges to US interests in the hemisphere. The command has emphasized that Chinese access, presence, and influence at strategic chokepoints such as the Panama Canal could imperil the United States' ability to rapidly respond in the Indo-Pacific during a crisis. SOUTHCOM has increased security cooperation activities from 1,014 in fiscal year 2024 to a planned 1,171 in fiscal year 2025. The command has invested $35 million in Peru's maritime domain awareness, $16 million in Costa Rican container scanning capabilities, and $13 million in Ecuadorian air surveillance radars. Additionally, the United States facilitated Argentina's acquisition of 24 F-16 fighter jets and supported Brazil's purchase of 12 UH-60M Black Hawk helicopters worth $950 million, explicitly positioning these sales as alternatives to Chinese military equipment. However, these efforts face significant challenges: they often come with more stringent requirements, deliver results more slowly, and must overcome decades of accumulated skepticism about US commitment to the region. The Trump administration's renewed focus on Latin America, including threats regarding the Panama Canal and Secretary of State Marco Rubio's early visits to Central America, signals heightened attention but also introduces uncertainty about the consistency and nature of US engagement. Beyond Economics: Technology and Security The competition extends well beyond trade and investment into technology and security domains. The debate over Huawei's infrastructure has become a microcosm of this broader contest. Eight Latin American nations have now installed Chinese 5G equipment, while 24 others use Chinese 3G/4G infrastructure, potentially making future 5G upgrades with Western companies cost-prohibitive. The United States has pressured Latin American nations to exclude Chinese technology from their telecommunications networks on security grounds. Some countries have complied; others have resisted, viewing the technology as cost-effective and the security concerns as overstated or pretextual. Chinese engagement with Latin American militaries, while modest compared to US defense relationships, has been growing. Joint exercises, equipment sales, and training programs have expanded China's security presence in a region where US military influence has historically been dominant. Meanwhile, Chinese space monitoring stations and GLONASS systems in countries like Nicaragua and Argentina raise concerns in Washington about strategic positioning in the Western Hemisphere. Latin American Agency and Pragmatism Perhaps the most important dimension of this competition is often overlooked: Latin American nations are not passive pawns but active players pursuing their own interests. Many governments have adopted a pragmatic approach, seeking to benefit from both relationships without fully aligning with either power. This hedging strategy allows them to access Chinese investment and markets while maintaining security ties with the United States. Countries like Brazil have been particularly adept at this balancing act, deepening economic ties with China while preserving strategic relationships with Washington. Others, facing US pressure to choose sides, have bristled at what they perceive as a return to Cold War-style binary thinking that ignores their sovereignty and agency. The Limits of Influence Both powers face constraints in Latin America. China's influence, while growing, remains primarily economic; it lacks the deep cultural, linguistic, and institutional ties that bind the United States and Latin America. Chinese soft power faces barriers, and Beijing's authoritarian governance model holds limited appeal in a region that has largely embraced democracy. The United States, meanwhile, must contend with its own historical baggage—decades of interventions, support for dictatorships, and economic policies that many Latin Americans blame for inequality and instability. Trust deficits accumulated over generations cannot be easily overcome, even with renewed attention and resources. As SOUTHCOM's posture statements acknowledge, the command operates in an environment of heightened expectations where partners want to see and feel American presence and commitment. The US-China competition in Latin America is likely to intensify as both powers recognize the region's strategic importance—not only for its natural resources (including 50 percent of the world's lithium reserves in Argentina, Bolivia, and Chile) and markets but also for its diplomatic support in international forums and its geographic position. The Chancay port represents a tangible manifestation of China's long-term commitment to reshaping trade routes and strategic access in the hemisphere. However, the outcome of this competition will not be determined solely in Washington or Beijing. Latin American nations will shape their own futures, leveraging great power competition to advance national interests while guarding their autonomy. The region's leaders increasingly recognize the value of maintaining relationships with both powers, even as they navigate pressure to align more explicitly with one or the other. The most constructive approach for both the United States and China would involve recognizing Latin American agency and focusing on what they can offer rather than what they can deny each other. For the region itself, the challenge lies in maximizing the benefits of engagement with both powers while avoiding the pitfalls of excessive dependence on either. In an increasingly multipolar world, Latin America's position between competing powers offers both opportunities and risks that will define the region's trajectory for decades to come.