China’s Expansion into Latin America: Why That’s a Problem for Canada
China’s global infrastructure program, the Belt and Road Initiative (BRI) was launched in 2013 and was set to revolutionize international commerce. Through investment and support of projects in developing countries, China hoped to rewrite the rules on international trade and foreign relations by usurping the United States and the West and becoming the preeminent financier of global megaprojects. As of 2024, 147 countries have signed up to the initiative, accounting for two-thirds of the world’s population and 40% of global GDP.
However, the initiative’s success has been mired in economic coercive behaviour that has been disguised as ‘development opportunities’ for countries in financial need. With notable quagmires in Sri Lanka, Ecuador, and the Democratic Republic of the Congo (DRC), China has utilized its BRI to serve one purpose: to develop global economic control of crucial infrastructure nodes that circumvent Western leadership. Attempting to prove that an authoritarian socialist market economy is superior to democratic capitalism, China has invested heavily in acquiring critical infrastructure around the world.
Prior to the Asia-Pacific Economic Cooperation summit in Lima, President Xi Jinping inaugurated a massive deep-water port in Chancay, Peru. Funded through the BRI, this $1.3 billion investment began what China hopes is a ‘Great Inca Trail,’ a maritime-land corridor connecting China and Latin America. Planned to be connected to Brazil via a yet-to-be-developed railway (also funded by China through the BRI), this new mega port is China’s first step in securing critical minerals and resources in South America.
Economic cooperation through the BRI has historically posed numerous moral and financial concerns for countries that receive funding. After Sri Lanka failed to pay back BRI loans, China seized a 70% share of the deep seaport at Hambantota for 99 years for $1.12 billion. Ecuador also borrowed massively from China to fund the construction of a $2.6 billion hydroelectric dam at the foot of an active volcano. The dam now has over 17,000 cracks in it and is operating at reduced capacity. As part of the contract, China has demanded payment in oil, not dollars. In the Democratic Republic of the Congo, China also failed to build the agreed-upon $3 billion infrastructure promise while extracting critical minerals valued between $10 billion and $17 billion.
With legitimate moral and financial concerns for BRI investment globally, China’s growing investment in Latin America poses a severe national security risk to Canada and the West. The new Peruvian port at Chancay is a deep-water port capable of docking Chinese Navy warships. It is yet another Chinese-owned port capable of serving a dual military-civilian function.
This meddling in the Western Hemisphere under the façade of economic development is not an isolated incident. Argentina has also been targeted for the construction of a Chinese-controlled naval base in Ushuaia. Located at the southern edge of Argentina, this maritime base would control access to the Atlantic and Pacific Oceans and could also gatekeep access to Antarctica. Thankfully, this plan was inevitably shut down due to heavy lobbying from Washington, D.C.
The construction of naval bases capable of providing shelter to the Chinese Navy, which are owned by a Chinese company, is not a new strategy. China has previously implemented this strategy of containment within the Indian Ocean by surrounding India. Colloquially known as the ‘String of Pearls,’ China has strategically encircled India along crucial sea lines of communication with military and commercial facilities in Pakistan, Sri Lanka, Djibouti, Bangladesh, Myanmar, Thailand, and Cambodia.
We cannot allow the same to happen to Canada and the Western Hemisphere. Encirclement through disguised financial aid should raise alarm bells in Canada, and we must do more to prevent it from happening. A renewed, increased presence in Latin America is critical for our national security. Active participation in international bodies such as the Organization of American States and America’s Partnership for Economic Prosperity is a must, with Canadians on the ground working with like-minded allies to provide economic opportunity for others.
Canada and the West need to increase their presence in the region, and we must not sleep-walk towards a ‘String of Pearls’ situation in Latin America. We must act to support our partners and interests in a region rich in critical minerals, resources, and opportunity. If not, China will continue to exploit and expand to no one’s benefit but their own.