China looking to Latin America & Caribbean for trade and commodities

This video from CNBC looks at how China is spreading its influence in Latin America and the Caribbean. China became their second-largest trading partner in 2021, with almost $450 billion worth of goods exchanging hands, up from $12 billion in 2000, or almost a 40-fold increase. China is primarily looking for soy to address a critical food security challenge at home.

Between 2005 and 2020, China invested more than $130 billion in the region, including $60 billion in Brazil, $27 billion in Peru, $27 billion in Chile, while Argentina received $12 billion of Chinese official foreign direct investment. The table below shows Chinese loans in the area and Venezuela is a good example of what could go wrong if you give huge loans to a poorly performing economy.

Belt and Road Initiative This is a vast  infrastructure and development project with the original purpose of connecting East Asia to Europe. The project has since expanded to Africa and all the way to Latin America. In 2022, Argentina joined 20 out of the 33 Latin American & Caribbean countries that have formally signed up to the Belt Road Initiative. This changed the nature of  investments in the region from basic material and energy sectors to include consumer goods, financial services, industrial goods,  telecommunication services and utilities.

Signing into the Belt and Road Initiative is a way of gaining diplomatic favour from China or being on the right side of things with China.

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