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Winston Mok

In the early days of 2026, there has been an unexpected turn in China’s global relations. Some US allies have started reaching out to China just as China faced complications in ties with some friendly countries in the Global South. The underlying cause for both trends is the Trump administration’s imperial behaviour.
With the dramatic abduction of Venezuelan President Nicolas Maduro and US President Donald Trump’s wish to control Venezuela’s oil, China’s economic stake in one of its closest friends in Latin America faces grave uncertainties. This is compounded by the recent ruling of Panama’s supreme court against CK Hutchison’s port concessions in the country.
In light of these events, how might China’s economic relationships with Latin America be framed? Should China scale back its involvement in the region?
While less central to China than Southeast Asia, Latin America has played a crucial role in China’s global trade and investment portfolio in the Global South. In 2024, China’s trade with Latin America stood at US$518.5 billion, more than half the level with Southeast Asia and 75 per cent higher than that with Africa. China is the largest trading partner of several South American countries and the second largest for Latin America as a whole.
From an investment perspective, Latin America is even more important. China’s foreign direct investment (FDI) in Latin America has recovered significantly, from US$8.7 billion in 2023 to US$14.7 billion in 2024. While lower than the level in Southeast Asia, China made more than four times the direct investment in Latin America as in Africa in 2024.
The headlines about Venezuela should not be extrapolated to the continent as a whole. While China has been a key buyer of Venezuelan oil, trade with Caracas is only a minor component of China’s Latin American portfolio, representing only 1.3 per cent of China’s trade with the continent in 2024. While China was a key financial backer of Venezuela, its lending declined sharply after 2015.


In contrast, China’s trade with Brazil, its top trading partner in Latin America, was US$158 billion in 2024. Brazil was the key driver behind China’s rising FDI in Latin America. China more than doubled its investments in Brazil in 2024 compared to the previous year. In fact, Brazil was China’s top destination for FDI in the Global South in 2024 and its third-largest FDI destination overall, behind only the United Kingdom and Hungary.
While the United States is taking coercive actions against a handful of Latin American states, these actions can only ever be isolated cases. The US does not have the capability to undertake such interventions across an entire continent.
Given the complementary economic structures between China and Latin America, the trade with and investment by Chinese companies in Latin America cannot readily be replaced by US corporations. Engagement with China is essential to support the economic development of these countries.
The second Trump administration has embraced its own version of the Monroe Doctrine – a variant sometimes called the “Donroe Doctrine” – in an effort to keep outside powers from establishing themselves in the western hemisphere, which Trump sees as the US sphere of influence. As long as China is not trying to establish military bases in Latin America, there is no justification for any attempts to expel China from the region or enact restrictions against its trade and investments in Latin America.


The European Union is also a key provider of FDI in Latin America, with its contributions in 2024 second only to the US. After more than two decades of negotiations, the EU signed a free-trade agreement with the Mercosur bloc members Brazil, Argentina, Uruguay and Paraguay. Latin America is further diversifying its trade relationships beyond the US and China at a time when the US sees the continent as contested ground in great power competition.
It is worth noting that the US invasion of Venezuela is more complex than any simple narrative of a setback for China’s interests in Latin America. In fact, the US intervention was not necessarily all bad news for Beijing. China’s engagement with Venezuela has cooled in the last decade as it has grown more cautious with its lending. Many Chinese-financed projects have failed to deliver amid reports of corruption and other inefficiencies.
Given China’s stated preference not to interfere in the domestic politics of other countries, Chinese companies are more likely to vote with their feet. If the US can somehow make things more efficient and stable in Venezuela, it should be welcome news for China. Keep in mind that the US still needs China as a buyer of Venezuelan oil.




Carrying out a military operation was the easy part. Removing Maduro from power does not necessarily mean Venezuela’s institutions will improve when a web of vested interests is still in place. Venezuela’s National Assembly has passed legislation allowing foreign investment in the oil sector, but US oil companies may be reluctant to go in given the many risks and challenges involved. Sino-American cooperation could offer a glimmer of hope for Venezuela.
China’s strategy in Latin America is anchored in broad economic interchanges with the continent and its major economies. While the Venezuela situation highlights risks in volatile states, it represents a tiny fraction of China’s regional trade. Latin America’s economic development necessitates diversified engagements, as seen in the Mercosur trade agreement with the EU. China’s sustained commercial engagement can deliver mutual benefits for China, the US and Latin America alike.


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China-Latin America relations

China’s Latin America strategy goes well beyond Venezuela and Panama

A man on a motorcycle transports water bottles past pumpjacks, beside deteriorating oil infrastructure on the shores of Lake Maracaibo, in Cabimas, Venezuela on January 26. Photo: Reuters

Forging robust China-South America ties takes more than just trade

Influencers pose for a photo at the launch event of Chinese electric vehicle maker BYD in Buenos Aires, Argentina, on October 8, 2025. Photo: Reuters

Argentina’s President Javier Milei, left, shakes hands with US President Donald Trump at the “Board of Peace” meeting during the World Economic Forum in Davos on January 22. Photo: AFP

Chinese steel hit with duties of up to US$670 per tonne as Brazil dumping probe concludes

A worker stacks steel products meant for the export market at a factory in Binzhou, Shandong province, China, on April 15, 2025. Following two investigations, Brazil has imposed anti-dumping duties on a broad range of Chinese steel products. Photo: AFP

Brazilian Vice-President Geraldo Alckmin signed the government’s new anti-dumping duties legislation aimed at Chinese imports. Photo: AP

Trump’s South America threats fizzle as China’s trade surges, powered by Peru port

A container is lifted by a crane at the Chinese-funded Chancay port in Peru, on October 29, 2024. Photo: AP

As US toughens stance, how exposed is China to Iranian and Venezuelan oil?

An oil tanker is anchored in Lake Maracaibo, Venezuela. China’s reliance on low-price crude from Venezuela is under strain as the United States tightens control over the country’s oil industry. Photo: Xinhua

An oil tanker carrying imported crude oil sails in the Jiaozhou Bay in eastern China. Photo: Getty Images

Opinion

World Opinion

News

World

Americas

China

While recent events highlight the risks in volatile states, China’s position in Latin America is rooted in deep trade and investment links with the region’s largest economies


While recent events highlight the risks in volatile states, China’s position in Latin America is rooted in deep trade and investment links with the region’s largest economies.


Venezuela

US-Venezuela conflict

China trade

The View

United States

Brazil

Panama

Global South

Nicolas Maduro

Donald Trump

CK Hutchison

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


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