The Silk Road Comes West

How China’s Belt and Road Initiative is Impacting LatAm, the Caribbean… and the World

How China’s Belt and Road Initiative is Impacting LatAm, the Caribbean… and the World

By Yousra Benkirane

After three years of a pandemic that revealed the vulnerability of global supply chains and a year of war in Ukraine that upended global food and energy markets, analysts say that globalization is at a turning point. Again. In a Foreign Affairs report, International Monetary Fund Managing Director Kristalina Georgieva warned of looming “geo-economic fragmentation.” Countries and companies are “re-evaluating global supply chains and undoing decades of integration,” she said at the World Economic Forum in Davos last year.

Predictions of dying globalization are not new, coming after the 2008 global financial crisis, the 2016 Brexit vote and Donald Trump’s election, and the COVID-19 pandemic outbreak in 2020. Yet, none of these led to the end of global economic integration. Instead of pointing to deglobalization, perhaps Western analysts should look at China’s massive expansion of global links.


In 2014, China proposed a massive infrastructure project to connect China with Europe, Asia, and Africa through a network of roads, railroads, ports, and other infrastructure investments. Launched by President Xi Jinping, the initiative includes two key elements: the development of a new Silk Road Economic Belt linking China by land with Central and South Asia, Russia, and Europe, and the development of a 21st century Maritime Silk Road, linking China by sea with South and Southeast Asia, the South Pacific, the Middle East, East Africa, and now Latin America and the Caribbean.

Originally known as the One Belt, One Road initiative, there were initially about 60 participating countries. The renamed Belt and Road Initiative (BRI) has since expanded to include 147 nations – ac- counting for two-thirds of the world’s population and 40 percent of the global GDP– including many in Latin America and the Caribbean who were formally invited to join the initiative in 2018.

According to Dr. Enrique Dussel Peters, a professor at the National Autonomous University of Mexico’s Graduate School of Economics and director of the Center for Chinese Mexican Studies, this program is “an explicit alternative to the globalization process we’ve been witnessing in the last 170 years,” alluding to a possible shift in leadership from Western hands. The professor also notes that China’s BRI is a well-publicized attempt to “improve the quality of living for the 99 percent of the population, not of the 1 percent.” President Xi himself claims the BRI is a “win-win” for both China and participating countries, an extension of China’s goal to eradicate absolute poverty.


For Latin America and the Caribbean (LAC), China’s investments could provide an opportunity for developing countries to fill the infrastructure gap that has historically led to economic underperformance. Even before the Chinese Minister of Foreign Affairs formally invited LAC countries to participate in the initiative in 2018, some were already informal participants. Panama became the first country to officially sign a BRI Memorandum of Understanding with China after breaking diplomatic relations with Taiwan in 2017. Since then, 20 of the 33 LAC countries have joined the BRI, with a few notable exceptions: Brazil, Colombia, and Mexico have received millions of investments in infrastructure projects from China but have yet to officially sign on.

There are, of course, concerns about how the BRI may affect Latin America and the Caribbean. Some analysts fear that increased Chinese investment could put some nations in a “debt trap,” where they become excessively dependent on Chinese loans with little hope of repaying them. In the West, many view the BRI as a “Trojan horse;” a way to subvert Western hegemony and spread China’s development model, threatening U.S. interests in BRI-participating countries. Concerns have also been raised regarding the environmental effects of several planned infrastructure projects.

Since the program’s launch, China has invested billions of dollars in infrastructure projects throughout the LAC region, including developing roads in Costa Rica, railways in Argentina, and a port in Trinidad and Tobago. Figures from the World Economic Forum show that as of 2021, infrastructure investments accounted for $26 billion in foreign investment from China.

Some notable works include: the second-longest bridge in Latin America, a $1.4 billion project in Brazil that generated 7,000 jobs; China National Nuclear Corporation’s $7.9 billion nuclear powerplant in Argentina, which generated 9,000 jobs; the $1.4 billion Puente sobre el Canal de Panamá, the fourth bridge over the Panama Canal, generating 4,500 jobs; $1.8 billion in the manufacturing of Mexico City metros; and the construction of 5G networks across the region by China-based tech company Huawei.

In terms of trade, figures from the World Economic Forum reveal that China is now LAC’s second-largest trading partner after the United States. In the early 2000s, trade between China and LAC was relatively modest, with the Chinese market accounting for less than two percent of LAC exports (totaling $12 billion). By 2021, trade with China reached a whopping $450 billion, accounting for 18 percent of LAC exports, and experts predict that it could exceed $700 billion by 2035. “Even in the cases where countries do not have diplomatic ties with China, the presence of China is growing in terms of trade, investment, infrastructure, and financing,” says Dussel Peters. In Miami, China is the largest source of imports, valued at $7 billion in 2022.

In addition to the infrastructure build-outs, Chinese loans and overseas foreign direct investment (OFDI) have ballooned in the region. Between 2005 and 2020, the Export-Import Bank of China and the state-owned China Development Bank collectively lent Latin American governments $137 billion, mostly to finance infrastructure and energy projects. According to the World Economic Forum, China’s largest borrower, Venezuela, has taken out loans from China totaling $62 billion since 2007. China is also a voting member of the Caribbean Development Bank and the Inter-American Development Bank.


Both critics and supporters view the BRI as an extreme shift in China’s international strategy – though Dussel Peters notes that, “This has been going on for 20-plus years, from trade to financing to investments to infrastructure projects… this is an ongoing process and – note the irony – this has been going on in the United States’ backyard.”

Indeed, records show that China has been heavily investing in infrastructure projects in LAC since the early 2000s. From 2005 to 2022, China invested in 192 infrastructure projects, creating 673,608 jobs. Its momentum has actually been recently declining as global disruptions continue to impact China’s economy. Nonetheless, relations with China have played an important part in the economic growth of LAC.

In the case of Peru, economic ties with China have been significant. The relationship has historically been centered around the mining sector, and Peru has been the top location for Chinese mineral investment in Latin America. Chinese firms hold around 30 percent of the country’s total mining investment portfolio.

The downside has been concern by Peruvians over the exploitation of the country’s natural resources and the environmental impact of these projects. One example is the Marcona Mine project, the first Chinese mine in South America and the largest iron ore producer in Peru, developed by Chinese company Shougang Hierro Perú SAA. It’s one of the most divisive projects in the country, with stacks of lawsuits alleging labor and environmental law violations, and the use of unethical practices to meet demand.

With its BRI program, China is moving away from investing in fossil fuels and mining, however, and more into transportation. From 2015 to 2019, China invested in some 29 energy projects in the LAC region. From 2020 to 2021, that number had dropped to 13.

As for the “debt trap” concerns, LAC’s foreign debt is mainly with the U.S., Europe, Japan, the International Monetary Fund (IMF), and the World Bank. According to Dussel Peters’ research, debt to China has yet to become a huge concern in LAC, and because loan conditions have made it difficult for LAC countries to increase debt from the IMF or World Bank, these nations are welcoming Chinese investments.

Will LAC countries be forced to choose between the U.S. and China? Doubtful. The presence of both countries is important for trade and investment. “The United States is still an unquestionable point of reference, culturally, politically, financially, and economically. But again, the reemergence of China has to be acknowledged,” says Dussel Peters.

As for Miami, the impact of China’s BRI on the city is likely to be mixed. On the one hand, increased Chinese investment in Latin America could lead to more trade and business opportunities for Miami-based companies. On the other hand, as China continues to expand its presence in Latin America, it could potentially dent Miami’s influence as a hub for trade and finance in the region. Overall, the impact of China’s BRI on Miami is difficult to predict, but the project is likely to have significant implications for U.S. relations with the LAC region.

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