China and Latin America, Explained: A Conversation with Samantha Custer

Why It Matters

Latin American governments must balance China’s fast, large‑scale financing against rising debt risks and softer conditionalities, shaping the region’s fiscal stability and strategic autonomy.

Key Takeaways

• China’s financing dwarfs Latin America’s economies, creating asymmetry.
• Over $33 bn funded 3,300 projects, with spiky, uneven distribution.
• Chinese loans use market‑rate debt, co‑financed with global banks.
• Projects range from large infrastructure to low‑value goodwill initiatives.
• Speed and fewer conditionalities trade off against debt sustainability risks.

Summary

The episode examines why Latin America and the Caribbean have turned to Chinese investment, featuring development‑finance expert Samantha Kuster. She outlines how China’s credit lines and policy‑bank lending have grown dramatically, with Beijing financing roughly 3,300 projects worth $33 billion since 2000, but in irregular spikes tied to the Asian financial crisis and the early Belt‑and‑Road years. Kuster breaks the region into three recipient tiers—large borrowers such as Brazil and Argentina receiving double‑digit billions, medium‑sized economies like Chile and Colombia getting a few billion, and smaller states under $1 billion—highlighting the asymmetry between China’s eight‑to‑28‑times larger GDP and the region’s economies. She notes a shift toward more sophisticated, syndicated loan structures that pair Chinese state‑owned banks with Western lenders, introduce risk‑premia and Paris Club‑style clauses, and blend commercial‑rate debt with softer goodwill projects in health, education, and training.

The discussion stresses that Chinese financing offers speed and limited governance conditionalities, contrasting with multilateral development banks’ slower, conditional, but lower‑risk packages; however, recent Chinese behavior shows decreasing risk tolerance and a move toward co‑financing, signaling a nuanced trade‑off for policymakers weighing debt sustainability, strategic leverage, and rapid infrastructure delivery.

Original Description

Have you ever wondered why China’s presence in Latin America has grown so quickly? Why are governments across the region turning to Chinese investment, and how does this shape power, influence, and resilience today?

In this four-part interview series, Experts of the Americas speaks with leading China–Latin America specialists to unpack what’s driving this shift. We explore a more multipolar region where investment, supply chains, and security cooperation double as tools of influence.

In this episode, Samantha Custer, Catherine M. Kelleher fellow at the University of Maryland, joins Miguel Escoto and Stephanie Ávalos of the Adrienne Arsht Latin America Center to break down how Chinese credit lines, policy bank lending, and the Belt and Road Initiative work in practice. We explore how fiscal stress, governance capacity, and US policy gaps shape the choices Latin American governments face today.