BEIJING: President Xi Jinping vowed on Tuesday to boost China’s footprint in Latin America and the Caribbean with a new $9 billion credit line and fresh infrastructure investment, although Brazil warned the region not to become overly reliant on foreign funding.

The world’s second-largest economy will disburse 66 billion yuan ($9.18 billion) in credit to the Community of Latin American and Caribbean States’ (CELAC) members, Xi told delegates from around 30 nations gathered in Beijing for the three-yearly China-CELAC Forum Ministerial Meeting.

“China and the countries of Latin America and the Caribbean are important members of the Global South. Independence is our glorious tradition, development and revitalisation our natural right, and fairness and justice our common pursuit,” Xi said.

Xi promised leaders including Brazilian President Luiz Inacio Lula da Silva and Colombian counterpart Gustavo Petro that China would also import more from Latin America and encourage its firms to boost investment.

Beijing has stepped up efforts in recent years to displace the United States as the region’s primary development partner, although Xi’s global “Belt and Road” infrastructure initiative (BRI) has encountered challenges in some countries.

China also sees courting the region as a way to squeeze self-ruled Taiwan. Seven of the 12 countries that have official diplomatic ties with the island, which Beijing considers one of its provinces, hail from Latin America or the Caribbean.

Haiti and Saint Lucia, which both recognise Taiwan, sent representatives to Beijing for the CELAC summit. Panama’s ambassador to China was also in attendance, although the Central American country has announced it does not intend to renew its BRI membership, which is set to expire in two to three years.

The fresh credit line, denominated in yuan, will be welcomed in many regional capitals, analysts say, although the funding is not immediately useful to countries struggling to service dollar-denominated debt.

“They are doing a lot more yuan-based deals like this, particularly for credit swap agreements that make it easier for the borrowing country to transact in RMB rather than USD,” said Eric Orlander, co-founder of the China-Global South Development Project.

“I think there is a case to be made that it is a win for Latin America in the sense that getting access to capital is now not as easy as it used to be.” The funding is just under half the amount Beijing offered during the inaugural China-CELAC Forum in 2015, although, as its $19 trillion economy has slowed, so has its willingness to lend.

Xi also announced visa-free travel would be rolled out to five countries, without specifying which ones. After the opening ceremony, delegates adopted a joint action plan covering cooperation through to 2027, a Chinese foreign ministry statement said.

US-China competition

The Forum comes as many Latin American and Caribbean states seek to negotiate better trade terms with the United States, following President Donald Trump’s “Liberation Day” tariffs.

Xi reiterated China’s opposition to the levies, while the Brazilian President urged the region not to become overly reliant on the world’s top economies.

Published in Dawn, May 14th, 2025