China’s expansion in Latin America is gaining momentum in the digital realm through artificial intelligence (AI) with concerning applications, such as surveillance technologies, facial recognition, and disinformation via the so-called deepfakes. In a recent report, Latin America in the New Global Geopolitics, the Peruvian Army’s Center for Strategic Studies (CEEEP) warns that China is increasingly focusing on AI in Latin America to counter the cultural and political values of Western countries.
“In its Global Security Initiative (GSI), elaborated through a white paper on the subject, China has expressed interest in working with the region on security issues through the Community of Latin American and Caribbean States (CELAC), where the United States is not present. China also highlights data governance, artificial intelligence, and space, emphasizing that it already has a significant presence in the region,” the report indicates.
Control technologies
According to the United Nations Office on Drugs and Crime (UNODC), eight of the 10 countries with the highest homicide rates in the world are in Latin America. The average annual number of killings, according to a 2023 UNODC study, was 9.3 per 100,000 inhabitants in South America, 16.9 per 100,000 inhabitants in Central America, and 12.7 per 100,000 inhabitants in the Caribbean. Under the pretext of fighting crime, Beijing uses the region as the perfect terrain to test its surveillance equipment and expand its control.
For example, the visitor access scanners in many Brazilian prisons are Chinese, manufactured by Nuctech, a direct supplier of the Chinese defense industry. In 2020, according to digital news site Politico, the Canadian government produced an internal threat assessment of Nuctech and found that “X-ray machines would provide numerous opportunities for attack, including through the covert collection of scanning images, compromising of portable electronics, and Bluetooth, mobile signal, or even electromagnetic emanation capture.”
That same year, the U.S. Bureau of Industry and Security blacklisted Nuctech “for involvement in activities contrary to U.S. national security interests.” In April 2024, Nuctech’s Dutch and Polish offices were raided by the EU competition regulators for receiving unfair state subsidies.
Chinese facial recognition systems are already a reality in many Latin American countries. According to Argentine news site Infobae, in Campinas, in Brazil’s state of São Paulo, and in at least 78 cities in the state of Bahia, the information collected by Huawei’s hundreds of street cameras goes to a single central computerized system. This not only makes it possible to identify and arrest suspects, but also to create a real digital archive. Beyond privacy issues, the problem, according to many experts, is that this data ends up in Beijing’s hands. The National Intelligence Law dictates that all Chinese companies must hand over collected data to the Xi Jinping government.
“China not only benefits from the sale of surveillance technology, but also from access to information,” Guermantes Lailari, a visiting researcher at Taiwan’s National Defense and Security Research Institute, told Diálogo.
Through China’s signature foreign policy, the Belt and Road Initiative, security camera systems are placed throughout Latin American cities as part of a “strategic opportunity” for Chinese firms to expand abroad. Cities include Mexico City, San Salvador de Jujuy in Argentina, Colón in Panama, and on the border between Uruguay and Brazil, among others. In July 2024, Chinese company Lenovo announced one of the latest smart city projects in the region, declining however to reveal the name of the metropolis. Using AI, normal city cameras have been transformed into surveillance devices capable of analyzing video data in real time and managed remotely. In 2016, the Pentagon warned against the use of Lenovo equipment amid concern that computers and other devices could introduce compromised hardware into the Department of Defense.
“If at some point a country decides to go against China, China can blackmail it precisely because of these surveillance systems. Moreover, if a government is authoritarian, on the one hand, the surveillance system is functional to keep it in power. On the other hand, China exploits this system to ensure that the political elites of that country remain loyal,” Lailari said.
The case of Venezuela is emblematic. The Homeland Card, an electronic card through which Venezuelans receive subsidies and social services, was developed by Chinese company ZTE, which together with the Nicolás Maduro regime controls all the personal data of registered users, from their electoral history to their real estate assets.
“Thanks to China, authoritarian regimes get better at oppressing their people. Moreover, surveillance equipment is tested this way on different ethnicities and so China can ‘tune’ its technology to work in more places worldwide. The more data it collects, the better it will be able to monitor people everywhere,” Lailari said.
Deepfakes
China is also using AI to generate and spread disinformation. For example, in 2019, U.S. social media analytics firm Graphika identified a Chinese influence operations network it dubbed Spamouflage, for flooding social platforms with spam content. In recent years, the disinformation campaign, which uses artificial intelligence tools to create videos of non-existent characters and fake personas on social media, has become more aggressive, aiming at manipulating the public, sow confusion, and undermine trust in public institutions.
“Deepfakes can be used to manipulate the population into believing what is not true. For example, a deepfake of a political leader can even declare war on another state even though the leader never actually said so. Deepfakes also sow doubts in people’s minds about what is true and what is a lie,” Lailari said.
E-commerce and digital payments
Beijing’s digital expansion is also reflected in e-commerce. Chinese companies such as Temu, Shein, and Alibaba, as well as Shopee which has a Chinese shareholding, offer products at very low and competitive prices, a decisive factor in their success. However, as early as 2023, a report by the U.S. House Select Committee on the Chinese Communist Party said that there’s a high risk that many of the goods sold on these platforms are the result of slave labor.
In October 2024, the European Commission opened an investigation against Temu for the possible presence of counterfeit products and aggressive marketing. Under investigation is Temu’s “addictive design” that include “game-like” reward programs.
The Chinese e-commerce sector has grown in parallel with Beijing fintech companies such as Fosun. According to another CEEEP report, China’s Digital Advance in Latin America, China is interested in increasing both consumer lending and digital payment systems in the region to avoid Western systems. The risk is that penetration into the Latin American market could provide the Chinese Communist Party with information about the financial situation of millions of people.
“Banking transactions are usually private in Western countries, while the Beijing government can access them without problems due to Chinese data laws, such as the National Intelligence Law,” Lailari said. By circumventing the Western financial system, China “could mitigate the sanctions that could be imposed if it does something like invade Taiwan,” the expert added.
Telecommunications and satellites
Chinese telecommunications company Huawei continues to expand in the most strategic areas of the region. In October 2024, Brazilian broadband provider Ligga signed a memorandum of understanding with Huawei to use its networks to bring 5G to the Amazon.
In addition, the Chinese telecommunications company is testing new 5G and 5.5G technologies in Brazil and Argentina. In early March 2024, Brazilian phone operator Vivo and Huawei signed a global agreement to exchange patents, especially those related to 5G. A few days later, the Brazilian operator announced the experimental activation of its first 5.5G center in Campinas, in São Paulo state.
According to Lailari, “the information that travels through Huawei’s networks is sent to China to be analyzed and exploited” with the risk of creating real economic wars in many other sectors. “For example, if a Chinese company and another from a European country compete to sign a contract with Latin American companies, China having access to the conversations or data passed through the compromised network could know in advance the negotiating position of the South American country and so the Chinese company could offer a lower price than the European one, just enough to get the contract,” Lailari said.
The satellite sector is also coveted by Beijing. In addition to aerospace agreements with some countries in the region to produce satellites, China seeks to catch up to SpaceX’s Starlink with its own geostationary and low-orbit satellites. GalaxySpace, Great Wall Industry Corp, and SpaceSail are some of the Chinese companies looking to outcompete Elon Musk’s company to offer satellite internet in Latin America.
“When it comes to Chinese technologies, the possibility of Beijing using them for nefarious purposes is very high,” with the possibility of endangering global security and not only that of the region, Lailari concluded.
