China Has Tripled Its Investment in Latin America Since 2020 and the United States Needs to Pay Attention to What That Means

The United States remains the dominant foreign investor in Latin America and the Caribbean across every relevant measure, and a new report from the Atlantic Council published this week makes that case with considerable force while also sounding an alarm about the areas where American engagement has fallen dangerously short. The study, prepared by a team of experts including Mexican economist and former Finance Minister José Antonio González Anaya, concludes that no other country has come close to matching the scale, breadth or consistency of American private sector engagement in the region over the past two decades, but that the window for maintaining that advantage is narrowing in ways that deserve serious attention.

American foreign direct investment in greenfield projects, meaning the creation of entirely new capital from scratch rather than the acquisition of existing assets, averages approximately 28.7 billion dollars annually across sectors including energy, digital infrastructure, manufacturing and services. The quality of that investment, the report argues, sets it apart from every competitor. American greenfield investment generates 65 percent more jobs per billion dollars than Chinese investment and 22 percent more than European investment, making it the most productive capital available to the region in terms of employment creation.

Where the Investment Is Going and Where It Is Not

Since 2020, approximately 70 percent of American investment in Latin America has been concentrated in Mexico, Brazil and Guyana, leaving strategic partners including the Central American nations, Argentina, Chile and Peru significantly underserved. The Atlantic Council report identifies this geographic concentration as one of the primary vulnerabilities in the current approach, since it leaves large portions of the region open to deeper engagement from competitors who are actively looking to fill the space.

Costa Rica is held up in the report as a model for what deliberate and strategic policy design can achieve in attracting foreign capital. The country has reached a level of American investment intensity that rivals economies considerably larger than itself, and the report describes it as offering a replicable model for the broader region, one that demonstrates how policy choices at the national level can reshape investment flows when they are pursued with clarity and consistency.

The contrast with China’s trajectory in the region is sobering. Chinese foreign direct investment in Latin America and the Caribbean has grown from under 1.5 billion dollars annually in the first decade of this century to 13.1 billion dollars in 2024. China has tripled its greenfield investment since 2020 and is actively gaining ground in automotive manufacturing, logistics infrastructure and mining across the region. The Atlantic Council report describes the urgency as real, and the gap between American investment in critical minerals and Chinese investment in the same sector is the starkest illustration of where that urgency is most acute.

The Critical Minerals Gap That Could Define the Next Decade

The report identifies the critical minerals gap as the clearest single opportunity for the United States to strengthen its position in Latin America while simultaneously addressing its own supply chain vulnerabilities. American investment in new mining projects in the region averages approximately 200 million dollars annually, a figure that stands in sharp contrast to China’s investment in the same sector, which runs at roughly twenty times that level.

Latin America and the Caribbean hold some of the world’s largest reserves of lithium, copper and nickel, three materials that sit at the center of the global competition over clean energy technology, electric vehicles and advanced manufacturing. China’s lead in mining investment across the region means it is building relationships, infrastructure and supply chain dependencies in exactly the areas where American economic and national security interests are most exposed.

The Atlantic Council report argues that redirecting American capital and public financing instruments toward those reserves would simultaneously strengthen domestic supply chain security and deepen commercial ties with strategic partners across the region. The private sector, the report acknowledges, is already moving in that direction to a meaningful degree, but specific government actions could considerably expand the reach and speed of that movement.

What the Report Concludes and Why It Matters for the Region

The broader argument of the Atlantic Council study is that American private sector engagement in Latin America represents a genuine and durable competitive advantage over every other foreign actor in the region, but that advantage is not self-sustaining and requires deliberate policy support to maintain and extend. The concentration of investment in a small number of markets, the lag in critical minerals engagement and the accelerating pace of Chinese investment across multiple sectors all point to a moment that demands more strategic attention than it has historically received.

For Latin American and Caribbean nations, the competition between the United States and China for economic influence represents an opportunity as much as a challenge, since both powers are actively seeking to deepen ties and both bring capital, technology and market access that the region needs. The question of which relationships ultimately prove most durable and most beneficial will be shaped by the investment decisions made in the coming years, and the Atlantic Council report suggests that the United States has the tools to lead that competition if it chooses to use them with the focus and urgency the moment requires.