Chinese loans to Latin America plunge as virus strains ties

MIAMI (AP) — It seemed like a match made in finance heaven.

In 2010, China, its economy roaring and state companies looking to expand globally, set its eyes on Latin America, a region starved of capital but rich in natural resources the Asian giant lacked. The result: a record $35 billion in state-to-state loans that year.

Fast forward a decade and the once-torrid relationship is starting to mature in ways that suggest China may be growing wary of its once do-no-wrong partner.

For the first time in 15 years, China’s two biggest policy banks — the China Development Bank (CDB) and the Export-Import Bank of China — made no new loans to the region in 2020, capping a multi-year slump driven by Latin America’s worsening economic slide.

The data comes from a new repor t by the Inter-American Dialogue, a Washington think tank, and Boston University’s Global Development Policy Center, both of which have been tracking for years China’s yuan diplomacy in Washington’s backyard.

China’s growing economic and diplomatic influence in the region has worried U.S. policymakers, who have been at a loss to counter its rise. The task now falls to the Biden administration, which has warned that the Chinese footprint in the region is a national security threat. But with China having displaced the U.S. as the top trading partner of several South American nations, catching up will be no easy task.

Meanwhile, the U.S. may have fallen even farther behind during the pandemic, when China donated more than $215 million in supplies — from surgical gloves to thermal imaging technologies — to allies in the region, according to the research. By comparison, the United State Agency for International Development and State Department has provided $153 million. China also conducted clinical trials or plans to manufacture vaccines in...