Main findings from our report include the following:
The year 2018 was among the lowest on record for Chinese state-to-state finance in Latin America, with only approximately $7.7 billion in loans from China Development Bank and China Eximbank to Latin American governments and state-owned enterprises.
Despite a relative drop in activity in 2017 and 2018, China’s record of lending in the region continues to surpass that of other banks. CDB and Eximbank have provided over $140 billion in finance to LAC since 2005. Chinese state-to-state finance tops sovereign lending over same period from either the World Bank or the Inter-American Development Bank.
Aside from a $600 million loan to the Dominican Republic, Chinese policy bank loans in 2018 were mostly directed toward the same set of countries that have received Chinese state finance for over a decade. A $5 billion loan to Venezuela accounted for nearly two-thirds of China’s lending to the region last year.
As in previous years, Chinese finance to LAC in 2018 focused overwhelmingly on infrastructure development. China’s 2018 deal with Argentina supports the renovation of the San Martín cargo line. Ecuador’s 2018 loans will reportedly be used to reconstruct earthquake-damaged infrastructure.
Relatively low rates of Chinese lending to LAC governments are possible in the near-term as Beijing exercises more caution in drawing down foreign reserves and as demand from China's traditional loan recipients likely slows somewhat.
Even if Chinese policy banks continue to lend to LAC at relatively low levels, as they did in 2017 and 2018, the combined effect of Chinese policy bank, commercial bank, and other forms of lending will ensure a sizable Chinese financial presence in the region for years to come, potentially in a wider variety of projects.