China has modified its approach in Latin America, adopting a less visible but more structural strategy of influence. This new direction focuses on specific investments in strategic sectors such as telecommunications, energy, and technology. This change not only redefines traditional methods of external influence but also raises profound questions about state autonomy and national security across the region.
Although the Belt and Road Initiative (BRI) continues to attract international attention, Latin America’s participation in this project has declined for the third consecutive year. In the first half of 2025, the region accounted for just over 1 percent of China’s global spending on BRI construction and only 0.4 percent of its foreign investment. Americas Quarterly notes that Chinese foreign direct investment has also continued to slow. In a particularly significant blow to the initiative, Panama — the first Latin American nation to join the BRI — officially withdrew from the program in early 2025. Panamanian President José Raúl Mulino questioned the tangible benefits of the BRI, pointedly asking at a press conference, “What has it brought to Panama all these years?”
Domestic priorities and strategic retreat
This shift in investment strategy is due, in part, to Beijing’s domestic priorities. According to Americas Quarterly, Chinese authorities instructed state banks to focus on domestic growth and in 2023 implemented risk management rules that limit external financial exposure. This has resulted in reduced financing for large, high profile infrastructure projects abroad.
Despite this decline, Chinese companies have maintained their activity in the region, making smaller, more targeted investments in critical sectors such as lithium, information and communications technology, clean energy, and electric vehicle production. These initiatives not only incorporate Chinese technological standards but also reinforce their role as strategic suppliers in Latin America. By embedding Chinese proprietary technology into the region’s energy grids and communication networks, Beijing is creating a long-term dependency that poses a silent threat to the internal security and decision-making independence of recipient countries.
New paradigm in influence
Sergio Cesarin, coordinator of the Center for Asia-Pacific and Indian Studies at the Tres de Febrero National University in Argentina, told Diálogo that China has moved away from the high-visibility, high-financial-commitment projects it had used for years as tools for regional positioning. “These types of projects, in addition to their high cost, project an explicit political presence that Beijing now seeks to manage with greater caution,” he said.
For Cesarin, “the shift toward less visible initiatives responds to a strategy of containment, aimed at moderating a projection that had been particularly active.” In this context, China seeks to adapt its influence to more volatile regional political cycles, prioritizing mechanisms of structural impact over public exposure. This subtler approach allows China to maintain a pervasive footprint while avoiding the public backlash often triggered by massive, debt-heavy infrastructure projects.
Selective investments and military diplomacy
The Chinese government’s most recent document on its relationship with Latin America, the third of its kind released in late 2025, confirms a shift toward identifying specific “niches.” This document, the first update in 8 years, goes beyond commerce to explicitly outline a program that expands China’s security footprint. This includes intensified military diplomacy, providing professional military education to regional officers, and deepening cooperation in law enforcement, cybersecurity, and surveillance technology. Such engagement signals an intent to influence the security doctrines and internal stability of Latin American nations.
Cesarin argues that this change reflects a new cycle in the Chinese economy, which has moved from exporting construction capacity and traditional infrastructure to prioritizing technology, services, and specialized knowledge. In Chile, the industrialization of lithium in 2025 demonstrated the persistence of Chinese interests in strategic sectors. Although the Chilean government reported that Chinese companies BYD and Tsingshan had withdrawn from processing projects in the north of the country, the Chinese Embassy in Santiago stated that both firms maintain investments and are open to dialogue with local authorities, Chilean media outlet Emol reported.
In Argentina, Ganfeng Lithium began operating a lithium production plant in the province of Salta in February 2025, aimed at extracting and processing the mineral for global markets. This project has a capacity of up to 20,000 tons of lithium chloride per year and features a solar park built for its energy operation, reported Reuters.
Beyond mining, Chinese companies have made advances in manufacturing and technological infrastructure in Latin America. Projects in Brazil, Mexico, and Argentina include the production of electric vehicles, auto parts, and developments related to clean energy and electricity transmission, Peruvian daily La República reported.
In Mexico, investments are concentrated in advanced manufacturing and the production of automotive components, especially electrical systems and auto parts, with the aim of integrating into existing supply chains amid the industrial reorganization of the sector, reported Mexico Business News magazine.
Structural influence and future challenges
Cesarin warned that China already has a significant investment presence in Latin America, particularly in infrastructure and energy, backed by large Chinese banks with a regional presence. These assets constitute consolidated economic interests that Beijing seeks to preserve, which may translate into a capacity for structural influence over strategic sectors in the recipient countries.
The analyst stressed that “although China has reduced the visibility of large projects, it maintains a long-term strategy through smaller-scale investments. This technical and fragmented approach sustains its regional presence with less political exposure and, at the same time, makes it difficult to identify early on the cumulative impacts on security and economic governance.”
Ultimately, this “technical and fragmented” integration into critical sectors creates a new type of vulnerability, where the regional footprint of a foreign power becomes so deeply woven into the national fabric that it can no longer be easily disentangled or audited for security risks.
