China Stakes Its Claim in Latin American Energy:

in a nation – like Venezuela – that has limited access to commercial loans from abroad or direct foreign investment (DFI). In Venezuela, the situation is compounded by its desire to avoid the onerous requirements of international financial institutions. How will the Biden administration deal with the challenge of China’s growing penetration in the economies of Latin America and the Caribbean, and its often unequal competitive practices?

metal used in batteries for mobile phones, laptops and electric vehicles, as well as by the military and aerospace sectors. Chinese influence could also impact the positions of some LAC states in international fora, like the United Nations.

Where does the money come from?

Over the past two decades, China has become a major global lender with direct loans and trade credits of more than $1.5 trillion to more than 150 countries across the globe 2 . China’s outstanding claims now exceed more than 5% of global GDP 3 As a result, China has become the world’s largest official creditor, surpassing official lenders such as the World Bank and IMF, or all OECD creditor governments combined. 4 That said, because China does not fully report on its international lending, there is an incomplete picture of how much money countries around the world owe China and under what terms. If anything, China’s total global lending is likely to be significantly higher than reported estimates. 5 China’s lack of transparency in its global lending creates a hidden debt problem with significant consequences associated with international surveillance, sovereign risk pricing and payment

The growing dependency by some LAC countries on Chinese debt financing, coupled with an uptick in M&A activity, 1 may jeopardize the potential for future political and economic cooperation with the United States. China’s growing regional influence could, over time, imperil access by U.S. businesses to rich Chilean, Bolivian and Argentine deposits of lithium, a strategic

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