Mexico News Report

In recent years Chinese economic ties in Latin American countries have increased greatly.

Brenda Estefan is a writer for Mexico’s Reforma newspaper and also a professor at IPADE Business School in Mexico City. (IPADE, Instituto Panamericano de Alta Dirección de Empresa, is the business school of Universidad Panamericano, a private Mexican university.)

Professor Estefan has an article on the China/Latin America topic in the America’s Quarterly, entitled Latin America’s China Ties Won’t Be Easily Severed .

Estefan writes that “Over the past two decades, while the U.S. focused on the War on Terror and conflicts in Iraq and Afghanistan, China strategically expanded its economic presence in Latin America and the Caribbean, transforming from a peripheral player into a key trading partner. Former U.S. Treasury Secretary Larry Summers acknowledged that he underestimated  this shift: ‘When a Latin American head of state asked me for something, I lectured them. While I was preaching, the Chinese were building airports.’ ”

Here’s how Estefan presents the big picture: “China has established a significant presence in many nations across the Western Hemisphere by lending to countries in urgent need, donating public libraries, building ports and roads, and extracting iron ore and vital minerals. Furthermore, trade between China, Latin America, and the Caribbean soared from $12 billion in 2000 to $315 billion in 2020, with projections indicating it could surpass $700 billion by 2035. China is now South America’s largest trading partner, with Brazil’s trade with China exceeding its trade with the U.S. by more than two to one. Beijing currently maintains ‘strategic partnerships’ with 10 of the 11 South American nations it engages with, with Guyana being the only exception, as it maintains only standard bilateral relations.“

Here is some information from the article about individual Latin American countries and their China relationship, concluding with Mexico:

COLOMBIA – “Seen by many as the staunchest and most loyal U.S. ally in the region, the U.S. is Colombia’s top trading partner, in contrast to the several South American countries whose largest trading partner is China. Still, Chinese imports have surged in recent years, making the Asian behemoth the country’s second-largest trade relationship.“

BRAZIL – “…Brazil—Latin America’s largest economy—is largely a lost cause for Washington, as it has significantly deepened its ties with Beijing. Chinese firms have invested in major infrastructure projects ranging from ports and railways to power grids. China is now Brazil’s largest trading partner, absorbing most of its exports, including soy, beef, coffee, and iron. In 2023, bilateral trade reached a record $181 billion. Moreover, Brazil and China have strengthened their geopolitical ties through BRICS, further complicating Washington’s ability to exert influence.”

ARGENTINA- “In Argentina, President Javier Milei presents a unique dynamic. While he shares a strong ideological affinity with Trump, his country’s economic ties to China—especially in the agricultural sector—are significant. The relationship between Argentina and China developed gradually between the 1970s and 2009, culminating in a major financial agreement: a currency swap between the Central Bank of Argentina (BCRA) and the People’s Bank of China (PBOC). The goal was to ensure Argentina’s exchange rate stability and strengthen bilateral trade. Since then, economic cooperation has deepened, with China becoming Argentina’s largest buyer of agricultural products.”

PERU- “Peru attracts the highest level of Chinese investment relative to GDP in Latin America. The most recent—and largest—of these investments is the Chancay deep-water port, designed to serve as a direct trade link between China and South America…”

CHILE – “Over the past seven years, Chinese investment in Chile has surged by 1,300%, with notable acquisitions in strategic sectors. Chinese firms now control over 60% of Chile’s electricity distribution market following purchases like Chilquinta and General Electricity Company (CGE).”

PANAMA “Following a visit by U.S. Secretary of State Marco Rubio, President José Raúl Mulino announced Panama’s withdrawal from China’s Belt and Road Initiative and indicated that his government might reconsider the concession granted to Hong Kong-based Hutchison Ports, which operates key terminals at both ends of the interoceanic canal.”

MEXICO
“Mexico is one of Washington’s most significant cases, given its deep economic integration with the U.S. through the USMCA. A recent article in The New York Times highlighted that China’s growing presence in Mexico’s auto industry is a key factor driving Trump’s push to expedite the USMCA trade agreement review. Since 2018, Chinese investment in Mexico has surged by 50% annually. In 2024, Mexico became China’s second-largest auto market, surpassed only by Russia. Manzanillo, the country’s busiest port, has seen a substantial rise in imports since 2020, mainly driven by Chinese goods. According to Norwegian logistics firm Xeneta, the Mexico-China trade route is now the fastest-growing in the world. Chinese companies have also played pivotal roles in major infrastructure projects in Mexico, including the Xochimilco-Tasqueña light rail and metro system upgrades in Mexico City and Monterrey. Even more, a recent study by Rice University’s Baker Institute suggests that Chinese investment in Mexico may be ten times higher than official figures indicate.“

“Trump understands that China’s presence in Mexico doesn’t technically violate USMCA terms, but that won’t alleviate his concerns. The idea of his primary geopolitical rival being deeply embedded in his largest trading partner—and positioned just across the 3,000-kilometer U.S.-Mexico border—is unacceptable. Unlike other Latin American nations, Mexico’s trade relationship with the U.S. is not merely important—it is fundamental to its economy, making it more vulnerable to Washington’s efforts to curb Beijing’s influence.“