Margaret Myers, senior advisor to the Asia & Latin America Program at the Inter-American Dialogue, testified before the U.S.-China Economic and Security Review Commission on March 19, 2026 regarding China’s evolving economic and strategic engagement in Latin America and the Caribbean.
TRANSCRIPT OF REMARKS MADE BEFORE THE COMMITTEE
The underlying drivers of China’s engagement with the region have proven quite durable over time and continue to sustain their relationship. China continues to rely on the region, as we’ve heard already, as a supplier of key commodities and as a market for increasing exports. High-tech Chinese goods are entering Latin American markets with growing intensity, as are lower-value consumer products at increasingly high rates. Latin America also remains central to China’s food and broader supply chain security. If anything, trade is deepening, and remains, in my view, the primary vehicle for China’s influence across the hemisphere.
But over time, China’s engagement has also given way to a more selective, strategically calibrated posture that is important for U.S. policymakers to understand. The often commodity-backed loan agreements that once defined Beijing’s financial engagement with the region have been replaced with a more selective, risk-aware, and strategic approach to cross-border finance. The value of Chinese FDI flows to the region has also slowed, and Latin America’s relative share of investment under China’s signature Belt and Road Initiative fell in recent years. These changes are due in very large part to a shift among Chinese companies away from large infrastructure initiatives towards smaller, often market-seeking projects in sectors of Chinese interest, especially at the higher end of the value chain.
China is not leaving the region by any means and is already embedded in strategic infrastructure, as the co-chairs have noted, but is in many cases recalibrating in light of shifting conditions. Political considerations will also increasingly impact decision-making. Both Chinese companies and Latin American governments are more seriously weighing the cost of engagement, with an effect on overall capital flows.
Recent U.S. efforts to halt projects of strategic concern, including through the sanctioning of officials in Chile and elsewhere, would appear to already be impacting prospective deal-making in the region, especially in those areas that Latin American governments perceive as triggering red lines for U.S. policy makers: critical infrastructure, surveillance technology, intelligence partnerships, and projects that could be construed as generating vulnerabilities for the U.S. in the event of a future conflict. At the very least, host governments and Chinese actors alike would appear to be adopting a wait-and-see posture pending greater clarity on U.S. policy, or else a change of policy direction. In China, debates about the appropriate scope and pace of engagement with Latin America have resurfaced in a way not seen since the Hu Jintao and Wen Jiabao era.
Of course, while U.S. pressure can certainly alter behavior at the margins, it will not fundamentally change the underlying structural components that underpin China-Latin America dynamics and cannot substitute for the deeper foundations of a competitive U.S. presence.
Constructive U.S. engagement deployed through the widest possible range of economic and diplomatic instruments, as outlined in my written testimony, is a critical component of any serious hemispheric strategy. The region is a major market for U.S. goods and investments, as was mentioned, and is an increasingly important node in the supply chains the U.S. is trying to shorten and secure. It will keep integration with Latin America as an industrial policy tool as much as it is a foreign policy or national security one.
Subordinating or sacrificing foreign assistance, educational exchange, and diversified economic engagement in favor of a predominantly coercive approach risks undermining the foundation on which U.S. influence in the region has rested. It also cedes to China precisely the ground that the United States has worked to build over the course of many decades. As it stands, China’s focus on people-to-people engagement is deepening, even as certain forms of economic activity slow somewhat.
This is, I would argue, also an important and opportune moment to engage in an increasingly productive manner. On balance, recent U.S. actions in the region have generated mixed reception, often unfavorable reception, notwithstanding the efforts of some governments to signal alignment with Washington. But China’s presence is also generating some tensions in the region. Latin American countries with significant industrial capacity, such as Brazil, Mexico, and Colombia, are confronting the consequences of Chinese industrial policy with increasing concern and directness. In other cases, prior negative experiences have prompted the greater scrutiny of incoming projects. Many countries are also seriously weighing the cost of over-dependence on any one nation, including China.
This moment presents the United States with a genuine opening. Growing regional unease about the displacing effects of Chinese trade generates demand for an alternative model, one that is defined by a commitment to supporting industrial development, building value chains rather than drawing from them, and engaging seriously with the region’s own economic aspirations, distinguishing from the China model entirely. Viewing this dynamic through a primarily national security lens will mean addressing only certain specific elements of China’s positioning, albeit very important ones.
Taking stock of the breadth and depth of Chinese engagement and how it affects the region for better or worse is critical at this juncture. And over the long term, I would suggest to you that only a competitive and productive alternative can compete effectively with China’s structural influence in the region.
