Feeling the Stones: Chinese Development Finance to Latin America and the Caribbean, 2023

Continuing the recent trend, China's development finance institutions (DFIs)—China Development Bank (CDB) and the Export-Import Bank of China (Ex-Im Bank)—issued relatively limited amounts of finance to Latin American and Caribbean (LAC) governments or state-run companies in 2023, according to findings from the Inter-American Dialogue's Asia & Latin America Program and the Boston University Global Development Policy Center (GDP). This is reflective of an ongoing recalibration on the part of the many Chinese financial institutions and companies that engage with the LAC region.

Our newly published report, Feeling the Stones: Chinese Development Finance to Latin America and the Caribbean, 2023, examines China's newest DFI lending to the region, individual country debt scenarios, and the growing importance of other-than-DFI sources of Chinese finance in LAC.

See the newly updated Chinese Loans to Latin America and the Caribbean Database for information on China's sovereign lending to LAC since 2005.

Main findings:

• In 2023, China's development finance institutions (DFI) issued two loans totaling US$1.3 billion to Brazil. Chinese DFI lending in 2023 was slightly higher than the US$863 million issued by CDB and Ex-Im Bank in 2022. Despite this slight increase, China’s sovereign lending to LAC remains modest.
• Economic and political turbulence would appear to have impeded Chinese lending in parts of the region. Argentina’s political uncertainties have had a dampening effect on Chinese lending there over the past few years.
• In other cases, LAC interest in Chinese DFI loans has dwindled. China has been an important lender to Jamaica over the years, having issued 10 loans to the country since 2005. But Jamaica’s efforts to reduce its debt-to-gross domestic product (GDP) ratios by 40 percentage points in a span of five years have naturally limited Jamaican interest in more Chinese finance.
• In general, Chinese DFI finance to Brazil, a main recipient of recent Chinese loans, has moved from a focus on the energy sector to other forms of financial assistance. Brazil’s Petrobras, a recipient of sizable CDB loans, has nevertheless signaled an interest in doing more with Chinese DFIs in the coming years.
• There is little to indicate a resurrection of the multi-billion-dollar, oil-backed lending that once represented the bulk of China’s financial engagement with the region. However, if 2023 is any indication, CDB and Ex-Im Bank will remain committed to issuing smaller loans that are closely linked to Chinese and host country development objectives, whether as concerns transport infrastructure development, generating investment, or boosting trade in priority emerging industries.

DOWNLOAD THE REPORT HERE: