(From CNN Money)
China is making its biggest bet ever on Latin America, just as the United States is turning its back
China poured billions of dollars into Latin America in 2015.
Chinese banks sent nearly $30 billion in loans to Latin American governments last year, more than double the amount from 2014. It’s also more money than the World Bank and Inter-American Development Bank gave to the region last year combined, according to the Inter-American Dialogue, a non-profit in Washington.
There’s more. China offered an additional $35 billion in funds that Latin American countries could access for infrastructure projects like roads, bridges and railways. Altogether, it’s China’s largest investment yet.
“What we’re seeing is a proliferation of Chinese finance in Latin America,” says Margaret Myers, a director at the Inter-American Dialogue.
The investments come as U.S. government aid and private investment in Latin America have declined for three straight years, according to State Department data and EPFR, a research firm that tracks fund flows.
The Chinese government too has greatly expanded relations with Latin America. China hosted all Latin American presidents in Beijing for the first time last year and China’s President Xi Jinping pledged to invest $250 billion in the region over the next decade.
China’s exports to Latin America grew to $130 billion in 2014 from a mere $6 billion in 2000, according to IMF data. China has become the top trade partner of Brazil, Chile and Peru, surpassing the United States in recent years.
The United States still has a greater economic presence than China in Latin America. The United States’ exports to Latin America in 2014 were worth three times more than those that China sent to the region. But China is gaining ground fast and chipping away at America as a superpower.
“What [the Chinese are] going for is influence — strategic power in the region to create dependence,” says Ilan Berman, vice president at American Foreign Policy Council. American “influence has steadily retracted.”
Americans are certainly retracting their cash out of Latin America. U.S. investors pulled out $700 million from Latin America last year, according to EPFR. Read more