Chinese Premier Li Keqiang is preparing for another Latin America tour next week that may culminate in some major financial agreements as Beijing continues to shore up its economic ties with the region.
The premier will visit Peru, Brazil, Colombia and Chile from May 18 to 26, Chinese Foreign Ministry spokeswoman Hua Chunying said Monday. Li will meet with the presidents of the respective countries.
No other details were announced, but Li is expected to promote Chinese-backed transportation projects, including the proposed creation of a rail link across the Andes. High-level visits from Chinese officials to Latin America have yielded billions of dollars’ worth of trade and investment deals in the past. Last summer, President Xi Jinping toured several Latin American countries, where he signed a $2.1 billion railway deal with Argentina and a $1.1 billion deal with Brazil for drilling rigs, among a slew of other agreements.
A Chinese state rail firm had led a consortium of businesses that won a $3.7 billion contract to build a high-speed rail system in Mexico, before Mexico’s government unexpectedly pulled the plug on the deal in January following heightened scrutiny of financial ties between the presidency and one of the contractors.
China has been deepening its relationship with the region in recent years. Analysts generally characterize the region’s ties with Beijing as mutually beneficial: Resource-starved China gains access to raw materials and investment returns, while Latin American countries get an influx of cash. In January, China hosted the first-ever forum between China and the Community of Latin American and Caribbean States (CELAC) in Beijing to discuss strategies for further cooperation.
According to the Inter-American Dialogue’s China-Latin America Finance Database, Beijing has funneled the vast majority of loans in the region to Venezuela, Brazil, Argentina and Ecuador. Venezuela is China’s largest beneficiary in Latin America, with more than $56 billion in loans. But Li’s itinerary during this trip suggests China might now be turning its attention more toward conservative-leaning countries for economic partnerships, particularly as places like Argentina and Venezuela have suffered from commodities price drops.
Peru, which has one of the largest Chinese diaspora communities in the region, has secured around $2.3 billion in Chinese loans since 2008 in mining and infrastructure projects. But Chile and Colombia have not inked any major loan deals with Chinese state entities in several years, providing ample opportunity for Beijing to tighten its partnerships there.