In just two decades, China has gone from being an emerging economic partner to a key player in Latin America. Its investments in ports, power grids, and infrastructure have consolidated its influence in the region. But alongside this visible progress, another has unfolded in the shadows: the expansion of Chinese criminal networks.
“China’s influence is not limited to traditional spheres of power and has turned organized crime into another front in its global power strategy,” investigative journalist Sebastian Rotella, an expert on transnational crime, told Diálogo.
Operating behind shipping containers, chambers of commerce, and cultural centers is a network that engages in money laundering; smuggling; human; and drug, and wildlife trafficking. According to research and experts, as explained in the first part of this report, this network operates with the tolerance — and even the functionality — of the Chinese state apparatus.
“It’s a tacit alliance between Chinese organized crime and the Chinese Communist Party [CCP] that turns transnational crime into a silent geopolitical weapon,” Rotella said.
The trade in chemical precursors for fentanyl is a striking example. Chinese companies, including state-owned ones, export inputs with no legitimate uses and even receive tax refunds. According to national security expert Leland Lazarus, Beijing’s reluctance to shut down websites that openly sell these precursors shows that, ultimately, this trade serves its interests. “The equation is clear. Crime generates dividends and, at the same time, aligns with Beijing’s strategic objectives,” Lazarus said.
Another key factor is state permissiveness and the diaspora. Various studies have documented how, since the mid-20th century, the CCP has maintained links with mafias and nationalist groups that have since become established in regions with a strong presence of Chinese migrants, including in Latin America.
“The relationship between the Chinese state and organized crime goes back a long way, but it has deepened in recent decades, especially under Xi Jinping,” Rotella explained. “His government has adopted a multifaceted approach ranging from information gathering and espionage to political influence and control of the diaspora. In this scheme, organized crime has become a key player.”
In this context, the diaspora plays a strategic role for both the mafias and the state itself. “They are the perfect bridge, combining cultural coverage, informal infrastructure, and closed communication circuits that become networks of trust where the boundaries between legal and illegal are blurred,” Rotella said.
The result is an unprecedented triangulation in the region, where China’s economic influence, the informal power of the diaspora, and the stealthy advance of mafias converge to fuel an expanding illicit ecosystem. “We are not dealing with a single dominant group, but with decentralized, flexible structures with a remarkable and worrying ability to remain under the radar,” Lazarus said.
Fujian: cradle of the diaspora and hidden power
Earth League International (ELI), known for its research on environmental and wildlife crime, has documented the presence of at least 35 Chinese criminal networks operating in Latin America and the Caribbean. Most share the same origin: Fujian province, the historic cradle of migrants and mafias. From there, entire communities have spread throughout the region, founding cultural associations, chambers of commerce, and restaurants.
Supermarkets, karaoke bars, and import stores have served as fronts to hide illegal activities, facilitate labor exploitation, and penetrate the money laundering business. The line becomes even more blurred when those involved in criminal activities also hold positions in “legitimate” sectors.
Operation Southern Dragon Dynasty, carried out in Chile in 2023 — highlighted in the first part of this report — exposed the magnitude of the phenomenon: massive marijuana plantations, labor exploitation networks, and connections with local authorities. At the center was Yu Caixin, president of the Chinese Chamber of Commerce in Temuco and leader of the criminal organization. “This is not an isolated accident, but another cog in a strategy that blurs the lines between legal and illegal,” Rotella said.
Similar patterns have been identified in other countries in the region. In Brazil, for example, the Bitong group has been accused of maintaining links with the powerful First Capital Command, as well as running fintechs in São Paulo and using diaspora businesses to launder money and cover up its illegal operations, a Metrópoles investigation indicated.
The other side of the diaspora
Beyond serving as a bridge for organized crime, the migrant community has also become the weakest link in this chain. “It’s a disturbing paradox because the very merchants and families who sustain and support the Chinese presence in the region are often the first victims of extortion, violence, and control,” Rotella said.
Recent cases confirm this. In December 2024, the Argentine Federal Police dismantled a network that not only demanded payments from Chinese supermarket owners but also kidnapped three of them to pressure others. In São Paulo, Brazil, between 2023 and 2024, there were 15 incidents of extortion against Chinese merchants, almost as many as in the previous nine years combined, Metrópoles reported.
The phenomenon has been repeating itself in different countries for more than a decade. Evan Ellis, an expert in national security and Sino-Latin American relations, documented how Chinese mafias extort owners of hotels, restaurants, nightclubs, and saunas run by migrants. In Lima, Peru — home to one of the largest Chinese communities in the region — the attacks have reached levels of urban terrorism ranging from Molotov cocktails thrown at restaurants in Callao to coordinated threats from Peruvian prisons by the Red Dragon group.
Ellis also recorded incidents in Panama, Ecuador, Venezuela, and the Caribbean basin. There, attacks have included murders of Chinese merchants in countries such as Trinidad and Tobago and Suriname, evidence of the continental reach of these mafias.
Silence has always been the great advantage of Chinese mafias. Linguistic isolation and the tradition of resolving disputes within the community itself have allowed them to operate for years with almost complete impunity. “That dynamic explains why their activities in Latin America have remained virtually invisible until recent times,” Lazarus said.
But the phenomenon goes beyond crime. The diaspora, while sustaining China’s presence in the region and facilitating certain illicit operations, is perceived by the Chinese regime as a latent risk. “Many revolutions have emerged from migrant communities, and Beijing fears that students or professionals trained abroad may be ‘contaminated’ by Western ideas,” Rotella added.
In this context, organized crime offers the state a useful tool. Its networks not only engage in illicit business but are also intertwined with intelligence operations ranging from traditional espionage to covert mechanisms of transnational repression, such as the controversial Chinese police stations abroad.
The hidden network of police stations
Officially presented as consular assistance centers, China’s so-called clandestine police stations have been denounced by nongovernmental organizations and investigative reports as tools of control, intimidation, and repression against the diaspora, including dissidents and political fugitives.
In 2022, the organization Safeguard Defenders documented at least 102 such stations in 53 countries and recorded 12 in Latin America: three in Brazil and Ecuador, two in Argentina, and one each in Chile, Colombia, Cuba, and Peru.
These centers operate outside international legal frameworks and, according to experts, represent a violation of the sovereignty of host countries by exercising police functions without jurisdiction. “If the host country is not informed that these actions are being carried out within its territory, without coordination or approval, it is a serious matter,” Lazarus said.
What is most disturbing is not only the existence of these stations, but who is behind their operation. An investigation by Rotella for ProPublica revealed that several of these police stations are under the control of Chinese criminal groups.
One of the most revealing cases is the Chinese police station in Prato, Italy, where, according to the ProPublica investigation, the same people who ran the station and were in direct contact with the Chinese authorities had open cases in Italy for leading Chinese mafias in that country. “These are the kinds of strange juxtapositions that occur at this confluence of forces between organized crime and the state, in these diaspora associations,” Rotella said.
This pattern, Rotella warns, is repeated on a global scale where specific cases have been identified. And, as the expert himself points out, “this is a global phenomenon that also finds echoes in Latin America.”
In this scenario, money laundering emerges as another central piece. A financial flow that not only sustains the mafias’ illicit businesses but, according to research, ends up connecting them to the CCP’s global influence platforms, such as the United Front. Beijing has presented this initiative as a mechanism for national unity and a link to the diaspora, but in reality, according to experts, it is a tool of political influence and foreign interference by the CCP.
“Laundered money strengthens the Chinese diaspora mafias, which are also a source of funding for the United Front,” Rotella explained, emphasizing that Chinese criminal groups are the main money launderers throughout Latin America.
From visible smuggling to invisible laundering
Money laundering has become the cornerstone of Chinese mafias in Latin America, replacing traditional smuggling with much more sophisticated schemes.
One of the first warnings came from Colombia. In 2017, an operation against smuggling warehouses uncovered a network linking China, Mexico, and Colombia through a triple combination: drug trafficking, illicit trade, and money laundering. According to El Tiempo, the Sinaloa Cartel imported illegal products from China to Colombia and used the profits to pay local groups responsible for supplying cocaine. To give the appearance of legality, they recruited Chinese citizens who were listed as the owners of the businesses involved.
“This is a money laundering model known as trade-based money laundering: masking and legitimizing illicit resources through international trade,” Rotella said. The raid led to the dismantling of 34 networks and the identification of at least 40 Chinese citizens. However, that scheme was just the beginning.
The qualitative leap was made in Mexico. Following the capture of Joaquín “El Chapo” Guzmán, the DEA discovered that his operators had dozens of contacts in China. Not only were they the main suppliers of chemical precursors for fentanyl, but they had also established themselves as the most efficient money launderers in the region.
The secret lies in laundering money through “underground banking” using transfer systems known as Mirror Transfer or Flying Money, a modern version of the ancient hawala, based on trust and loyalties within the Chinese diaspora, which allows millions of dollars to be moved without crossing borders or passing through regulated banks.
“These are highly sophisticated models that are quickly activated and generate large flows of value in multiple directions at the same time,” Rotella explained.
Here’s how it works: Cash generated by cocaine in Latin America is delivered to a Chinese mafia intermediary in cities such as Bogotá or Mexico City. Those dollars are “sold” to Chinese businesspeople who need foreign currency outside their country, and a partner in the network delivers the equivalent amount in yuan within China. The money never travels. The debt between intermediaries is later settled with shipments of contraband, covert transfers, or merchandise.
The appeal of the system is obvious. While traditional money launderers charge up to 6 percent commission and take weeks, Chinese criminal networks operate with just 1 or 2 percent and close deals in a matter of days. In 2024, the U.S. Department of Justice confirmed the laundering of more than $50 million linked to the Sinaloa Cartel under this mechanism. For experts like Lazarus, these operations already surpass traditional methods in scale, sophistication, and scope.
“Chinese criminals are transforming the money laundering market in Latin America,” Lazarus said.
The face of flying money
At the heart of the criminal machinery that now dominates money laundering in Latin America is Xizhi Li. Born into the Chinese diaspora, Li became one of the architects of an underground financial system that supports the operations of some of the continent’s most powerful cartels.
What is disturbing is not only the sophistication of the machinery he designed, but also his links to the state. According to investigations by ProPublica, Li offered his services to Chinese government officials and members of the CCP elite. He even sold fraudulent passports to a senior military officer.
Even more surprising is that Li managed to move tens of millions of dollars through Chinese state-owned banks and companies with apparent total impunity, despite the iron grip that the security apparatus has on the country’s economy.
One of the most obvious signs of this lack of control or political will, experts say, is the fact that these criminal networks communicate openly on WeChat, China’s leading social network and messaging system. They do not use codes or encrypted languages and speak bluntly about money laundering operations on a platform that is fully supervised by the Chinese state.
The courts have also provided evidence. In 2020, a Spanish court convicted four executives of the Industrial and Commercial Bank of China (ICBS) for receiving tens of millions of euros in cash and illegally transferring it to their country. In 2016, the Agricultural Bank of China was fined $215 million in New York for violating anti-money laundering regulations. Additional reports indicate that the Bank of China has also faced sanctions in Italy and France for repatriating funds linked to tax evasion and customs fraud.
The numbers are revealing. Between 2006 and 2020, more than $3.8 billion has left China illegally, making the country the world’s largest “hot money exporter,” according to John Cassara, a former investigator with the U.S. Treasury Department, who testified before a Canadian commission.
“Not only has it been tolerated, but this system has directly benefited the Chinese state because the flow of black money from these networks strengthens its economic interests and erodes its competitors,” Rotella said.
Li’s downfall in 2021, when he was captured in Mexico and extradited to the United States, did not mark the end of the system. His model, his network of trust, and the cracks he exploited continue to operate in the region, within a gray area that keeps Latin America under a parallel, silent, and difficult-to-trace influence: criminal China.
Part III
The dominance of Chinese mafias in Latin America has gone beyond the financial sphere. Today, Chinese citizens and companies not only launder money for the most powerful cartels, but also actively participate in the illegal trafficking of wildlife and marine species, a multimillion-dollar business that responds to insatiable demand in Asia.
The third part of this report explores how China has extended its footprint into a market that seemed controlled: the clandestine trafficking of jaguars, which have become coveted prey in the region. And it goes further. It will reveal how infrastructure built with Chinese state investment — particularly ports — has been transformed into strategic passageways for organized crime. The paradox is clear: The very projects that consolidate Beijing’s influence in Latin America are apparently functioning, in the shadows, as cogs that fuel illegality.
