No one's looking as China makes friends and influences people in Latin America
 As the US and EU impose tariffs on Chinese goods, China has been seeking to diversify its trade partners with a focus on Latin America.
With tariff walls going up in the US and Europe, say experts, Latin America has the opportunity to become a key player in global trade. China is already on site making friends and influencing people with its Belt and Road Initiative (BRI), upgrading infrastructure and connectivity in Mexico, Brazil, Argentina, Chile and Peru.
In Brazil, China is financing ports, railways, and highways. It plans a railway that spans the continent, but so far China Railway Rolling Stock Corporation has only won a concession to build and operate a 60-mile stretch from Sao Paulo to Campinas.
In Argentina, China has invested in the renovation and expansion of the Belgrano Cargas railway network and is "involved" with port and renewable resource development.
In Peru, Cosco Shipping has a 60 per cent stake the Chancay Megaport with an annual capacity of 1.5 million TEU. China is also invested in mining and infrastructure as well as in highway construction to support the export of minerals.
Belt and Road projects in Mexico, Central America, Antigua, Barbuda, Barbados, Dominica, Grenada, Guyana, Jamaica, Suriname and Trinidad focus on roads, bridges, ports and energy.
The China-Latin American trade is almost perfectly balanced with US$243 billion in value going in one direction and $245 billion going in the other direction. Outgoing from China are cars, apparel, electronics and machinery with Latin America exporting soybeans, fruit, beef, copper, iron ore and oil to China.
Japanese owned, but Singapore-based Ocean Network Express (ONE) and Taiwan's Evergreen Line are increasing their tonnage deployed on the Asia to Latin-America trade lane to handle growing demand, which has doubled in three years. The tonnage injection comes amid an uptick in Asian manufacturers expanding business in Latin America.
ONE is putting larger ships and adding new services on the trade, including the deployment of a 13,828-TEUer in the Asia-West Coast South America service. As the panamax size is now 14,000 TEU, such large vessels can access the Panama Canal if rotation changes. Evergreen’s new sailing schedules also reveal its increased capacity on that trade.
ONE vessels are 50 per cent larger than the existing 8,900-TEUers they are likely to replace - those being Hapag-Lloyd ships that had been operating, but have since withdrawn now that the carrier has joined Maersk in the Gemini Cooperation alliance.
Data from the UK consultancy, MDS Transmodal, show quarterly deployed capacity on the trade lane has more than doubled to two million TEU in the first quarter year on year between the first quarter of 2024 and the first quarter of 2025.
“It seems like the growth is to accommodate a lot of the new Asian manufacturers that are setting up down there,” a forwarder with cargo in the trade told New York's Journal of Commerce.
ONE rotation is expected to be Busan, Shanghai, Ningbo Ensenada and Manzanillo in Mexico, Buenaventura in Colombia, Guayaquil in Ecuador and Callao in Peru.
Evergreen and Cosco Shipping have teamed up to expand the Asia-South America West Coast 5 (WSA5) service in early February. The service, which had previously been a purely Mexico-focused route, will now cover ports including Buenaventura, Guayaquil and Chancay in Peru - where Cosco launched operations last November.
These new 18,800-TEUers will have two and a half times the number of reefer plugs. They are specifically designed for deployment on meat, fish and fruit.
Peter Sand, chief analyst at online benchmarking platform Xeneta, was bullish on trade growth fueled by further Chinese investment in Latin America. “Overall, we see a trend for increasing manufacturing investments outside China going forward and a growth trend for China to Mexico and Canada,” he said.
Latin America's economic growth prospects are improving, with countries like Brazil, Argentina, and Colombia showing positive economic indicators. This growth is driven by investments in infrastructure, digital transformation and tourism.
The region's consumer market is expanding, with increasing disposable income and changing consumer preferences. This growth is particularly evident in sectors like food and beverages, electronics and vehicles.
Latin America is rich in natural resources, including minerals, agricultural products, and energy resources. Experts suggest that strengthening intraregional trade within Latin America could boost economic growth and reduce dependency on external markets.
The Latin American and Caribbean Free Trade Agreement (LAC-FTA) aims to enhance regional integration and trade flows. But are many roadblocks as relations are saddled with a web of 33 preferential trade agreements (PTAs), which creates a fragmented trade landscape. This patchwork of agreements makes it difficult to achieve a cohesive and unified trading bloc.
Nonetheless, experts like Shannon O'Neil from the Council on Foreign Relations and Antoni Estevadeordal from the Georgetown Americas Institute, emphasize the importance of regional integration and diversification of economies. They believe that Latin America can capitalize on its natural resources and growing consumer market to become a significant trading hub.
Today, Latin America is still the forgotten continent. In the '50s and '60s when major newspapers had foreign correspondents, seldom were they sent to South America and if they were, they did not stay long. There have been dramatic times in the 1940s, when Eva Peron became Argentina's heroic First Lady, the election of Chile's Marxist president Salvador Allende in the early '70s and his overthrow by General Pinochet, and the Falklands War in 1982. All riveted our attention when and while they occurred but the region did not interest northern hemisphere much after that.
But that was not always so. In the 1920s and 1930s were times when South America was seen as a land of opportunity and potential, much like how AI and Tesla are viewed today. South America was often romanticized as a land of adventure and exploration. This perception was reflected in popular culture, including movies like "It's a Wonderful Life," where George Bailey dreams of travelling to South America.
Perhaps, history will repeat itself. |
