China Stakes Its Claim in Latin American Energy:

China’s energy engagement in LAC

Its growing presence in LAC energy sectors challenges the traditional market dominance of the U.S., presents vigorous – some say unfair – competition to U.S. business and raises questions about non-China access to current and future supplies of lithium, a strategic metal. It also raises questions for recipient nations, such as the possibility of excess indebtedness, corruption, environmental damage, labor issues and resentment from local manufacturers, who are often excluded from supplying goods and services for multi- billion dollar projects. The Trump administration’s isolationist politics created new opportunities for China in LAC. As the former US administration focused on “making America great again” and imposed import duties on Chinese goods as part of its trade war with Beijing, China has been doubling down on the pace of its strategic investments in LAC, seeking new infrastructure, telecommunications, mining and energy projects – particularly in renewables - across the region.

Growth of electric mobility and energy storage markets increases demand for raw materials used in lithium-ion batteries . Photo: Borges Samuel / Alamy Stock Photo

Over the past 20 years, China has aggressively expanded its energy engagement in the LAC region. Originally driven by economic expansion and a need for raw materials, China’s approach has experienced qualitative transformations in both diplomacy and investments. The Chinese, like any good investor, want to pick projects that will generate profits or produce enough revenue to repay loans, unlike their unfortunate loan-for-oil experience with Venezuela’s national oil company, PDVSA, which owes them tens of billions of dollars. China also invests with a keen focus on developing new markets for Chinese products ranging from solar power plants to electric vehicles.

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