For much of the 20th century, South America was firmly within the United States’ sphere of influence, economically, politically, and militarily.

Yet in recent decades, China has emerged as a formidable player, challenging Washington’s dominance and reshaping the continent’s global alignments.

Through investments in energy, mining, agriculture, infrastructure, and cultural diplomacy, Beijing is carving out a long-term foothold.

This raises critical questions: is China creating opportunities for South America, or merely reproducing old patterns of dependency under a new flag?

Why Is China Investing Heavily in South America?

China’s interest in South America is driven by strategic necessity. As the world’s most populous country and second-largest economy, China needs reliable access to food, energy, and raw materials. South America offers all three in abundance. Brazil and Argentina supply soybeans, beef, and corn; Chile and Peru provide copper and lithium; Venezuela holds vast oil reserves.

Beyond resources, South America also offers diplomatic value. By deepening ties with Latin American states, Beijing gains allies in international forums like the UN, where each vote carries weight. Economically, the region also provides an alternative to U.S.-dominated trade systems, strengthening China’s global diversification.

Trade Agreements: A Challenge to U.S. Dominance

China has displaced the U.S. as the largest trading partner of Brazil, Chile, Peru, and Uruguay. Bilateral trade between China and South America has grown from about $12 billion in 2000 to over $450 billion by the early 2020s. Free trade agreements with Chile and Peru, along with negotiations with other states, underscore Beijing’s long-term vision.

This shift threatens Washington’s traditional economic leverage. For decades, the U.S. wielded trade and investment as tools of influence. Now, South American exporters increasingly look to Chinese markets rather than North America. For example, Brazilian soybean farmers rely heavily on Chinese demand, which absorbs more than half of their exports. This structural dependence creates political implications: policies that anger Beijing risk jeopardizing crucial revenue streams.

Risks of Overdependence on China

Yet, such reliance brings vulnerabilities. South American economies risk becoming overly dependent on raw material exports to China, repeating the historical “resource trap” that kept them underdeveloped. When China’s growth slows, demand for commodities like copper and soybeans falls, triggering economic shocks across the region.

Moreover, China often invests in sectors tied to exports rather than in local value-added industries. This creates limited job opportunities and undermines efforts to diversify economies. Some governments worry that Chinese companies’ dominance in mining, agriculture, and energy could erode national sovereignty over key assets.

Soft Power: Culture, Education, and Media

China does not rely solely on trade. It also deploys soft power to shape South America’s perceptions. Confucius Institutes have spread across major cities, teaching Mandarin and promoting Chinese culture. Scholarships bring South American students to Chinese universities, while media partnerships ensure Chinese narratives reach local audiences.

This cultural diplomacy softens the image of China as merely a resource-seeker and presents it as a partner in development and modernity. However, critics argue that these programs come with subtle forms of political influence, discouraging critical discussion of issues such as human rights, Tibet, or Taiwan.

Naval and Commercial Presence: Security Concerns for the U.S.

South America’s strategic location makes it a potential theater for great-power competition. China has financed or constructed ports in Brazil, Argentina, and Peru, raising speculation that they could one day support military as well as commercial activities. While Beijing denies any military ambitions, the mere possibility unsettles Washington, which has long viewed the Western Hemisphere as its backyard.

In addition, Chinese companies’ investments in telecommunications and space facilities—such as Argentina’s deep-space monitoring station operated by a Chinese state-owned firm—raise concerns about dual-use technologies. For the U.S., these moves suggest that China’s presence could extend beyond economics into intelligence and security.

Infrastructure Projects: Railways, Highways, and Connectivity

One of China’s most visible roles in South America is in infrastructure development. From railways connecting Brazil’s agricultural heartlands to ports, to highways in the Andes, Chinese-built projects aim to improve regional connectivity and export efficiency.

These projects are often tied to the Belt and Road Initiative (BRI), which South American countries like Argentina, Chile, and Peru have signed onto. While they promise modernization, critics worry about debt sustainability, environmental degradation, and the lack of local participation in construction.

Nonetheless, for many governments, China offers financing that Western institutions like the IMF or World Bank provide only with strict austerity conditions. This makes Chinese offers politically attractive, especially in times of economic crisis.

Local Responses: Opportunity or Exploitation?

Reactions on the ground are mixed. Business elites and agricultural exporters welcome access to China’s vast consumer base. Governments see infrastructure projects as evidence of progress. But civil society groups and local communities often voice concern. In Ecuador, for instance, indigenous activists have protested Chinese mining projects for threatening water sources. In Brazil, unions complain about labor practices that sideline local workers.

These tensions suggest that China’s influence is not uniformly welcomed. Much depends on how governments regulate Chinese investments and whether they prioritize long-term sustainability over short-term revenue.

South America as an Alternative to Africa?

Observers often compare China’s engagement in South America with its strategy in Africa. Both regions supply resources, receive infrastructure loans, and host Confucius Institutes. But South America differs in its proximity to the U.S. and its more developed political systems. This makes the stakes higher: China is not only securing commodities but also undermining Washington’s regional dominance.

In some ways, South America offers Beijing an attractive hedge against risks in Africa, where political instability and debt crises sometimes disrupt projects. Yet, Latin America also presents its own volatility—shifting governments, populist politics, and economic swings complicate long-term plans.

Conclusion: A Delicate Balancing Act

China’s growing role in South America is both an opportunity and a risk for the region. It provides new markets, financing, and infrastructure, helping countries escape overreliance on Western institutions. But it also fosters dependency, environmental risks, and geopolitical entanglements.

For the United States, China’s advances represent a direct challenge to its traditional hegemony in the Western Hemisphere. For South American nations, the challenge is to balance engagement with Beijing while maintaining economic diversification and political autonomy.

Whether China becomes a partner in sustainable development or a new source of dependency will depend largely on the choices of South American leaders—and their ability to negotiate from a position of strength rather than weakness.