Why is China investing in Latin America?

Dec 5, 2013

Nicaraguan President Daniel Ortega and Chinese businessman Wang Jing hold up a concession agreement for the construction of a multibillion-dollar canal in Nicaragua.
Nicaraguan President Daniel Ortega and Chinese businessman Wang Jing hold up a concession agreement for the construction of a multibillion-dollar canal in Nicaragua.
Credit Esteban Felix / Associated Press
China has dramatically increased its economic influence in Latin America. The United States is still the region’s largest investor, but China is now in second place and gaining a larger market share. In 2009, for example, China loaned a Brazilian oil company $10 billion and built a cellphone factory in Venezuela. The next year, China signed a $10 billion deal for the construction of railroads in Argentina. And in March, Ecuador agreed to auction off one-third of the country's Amazonian rainforest to Chinese oil companies.

But all these deals pale in comparison to a project in Nicaragua. A Hong Kong company wants to spend at least $40 billion to build a canal across Nicaragua to connect the Pacific with the Caribbean Sea. It would be wider and five times longer than the Panama Canal. 

Nicaragua’s legislature gave the company the rights to build the waterway and connecting ports. The canal would be a giant boost for Nicaragua’s economy. But it also would likely pollute Lake Nicaragua, a vital source of drinking water. 

This week on Global Journalist, we’ll examine the economic and geopolitical implications of this surge in Chinese investments and trade in Latin America. 

Panelists:

Tim Rogers is the editor of  Nicaragua Dispatch.

Margaret Myers is the China and Latin America Program director at  Inter-American Dialogue.

Benjamin Creutzfeldt is a professor in Contemporary China Studies at CESA Business School in Bogota, Colombia.