China has offered Latin American and Caribbean countries a CNY66bn ($9.2bn) credit line as part of a comprehensive economic and political cooperation package, marking a significant escalation in Beijing's efforts to strengthen alliances amid ongoing trade tensions with the United States.

The announcement came at the fourth ministerial meeting of the China-Community of Latin American and Caribbean States (CELAC) Forum in Beijing on May 13, just one day after China and the US agreed to a 90-day truce in their tariff dispute.

"China and the countries of Latin America and the Caribbean are important members of the Global South. Independence is our glorious tradition, development and revitalisation our natural right, and fairness and justice our common pursuit," President Xi Jinping told delegates, including the presidents of Brazil, Colombia and Chile.

Marking the 10th anniversary of the China-CELAC Forum, Xi reflected on how the relationship had evolved: "Ten years on, with dedicated nurturing of both sides, the forum has grown from a tender sapling into a towering tree. This fills me with deep pride and satisfaction."

“We ride the tide of progress together to pursue win-win cooperation. Embracing the trend of economic globalisation, China and LAC countries have deepened cooperation in trade, investment, finance, science and technology, infrastructure, and many other fields,” Xi added.

The summit comes as bilateral trade between China and CELAC nations has flourished, reaching $515bn in 2024 – a dramatic increase from merely $12bn in 2000. China has overtaken the United States as the primary trading partner for several major economies in the region, including Brazil, Peru and Chile.

Brazil, Latin America's powerhouse, accounted for nearly half of the $240bn worth of goods China purchased from CELAC countries last year.

According to Chinese state media, Xi outlined five programmes covering politics, economic development, security, and cultural exchanges. The Chinese leader pledged annual invitations for 300 members from CELAC political parties to visit China over the next three years. He also promised to boost investment, import more goods from the region and enhance trade in traditional sectors like infrastructure and agriculture, alongside emerging areas such as clean energy, 5G telecommunications and artificial intelligence.

The package includes law enforcement training and equipment assistance under China's Global Security Initiative, as well as visa-free travel initially for five Latin American countries, with plans to expand the policy further. China will also facilitate 3,500 government scholarships and other exchanges to strengthen people-to-people ties.

The Beijing meeting took place against the backdrop of renewed trade tensions between major economies. Just one day prior, China and the US had reached an agreement to pause new import tariffs for 90 days while reducing existing duties.

In what appeared to be a pointed reference to American trade policies under President Donald Trump, Xi stated: "There are no winners in tariff wars or trade wars. Bullying and hegemonism only leads to self-isolation."

According to AP, Xi said China stands ready to "join hands" with Latin countries "in the face of seething undercurrents of pure political and bloc confrontation and the surging tide of unilateralism and protectionism."

The credit line's denomination in yuan rather than dollars represents a strategic shift, underlining China's growing ambition to reduce dependence on the US dollar in international trade.

"They are doing a lot more yuan-based deals like this, particularly for credit swap agreements that make it easier for the borrowing country to transact in RMB rather than USD," noted Eric Orlander, co-founder of the China-Global South Development Project, as quoted by Reuters.

The funding, though substantial, is approximately half the amount Beijing offered during the inaugural China-CELAC Forum in 2015, reflecting China's more cautious lending approach as its own economic growth moderates.

Significantly, Colombian President Gustavo Petro announced on May 12 that his country would formally join China's Belt and Road Initiative (BRI), despite recent setbacks for some Chinese infrastructure projects in the region, namely in Panama.

Two-thirds of Latin American countries have already joined the BRI programme, which has funded projects ranging from 5G networks to ports and hydropower plants throughout the region.

Yet Brazilian President Lula da Silva, who held private talks with Xi on the sidelines of the meeting, struck a note of independent caution despite the strengthening ties, saying: "It's important to understand, (the fate of Latin America) doesn't depend on anyone else. It does not depend on President Xi Jinping, it does not depend on the United States, it does not depend on the European Union, it depends solely and simply on whether we want to be great or continue to be small."

As the global economic landscape shifts amidst renewed trade tensions, China's strategic cultivation of partnerships across Latin America reflects Beijing's broader geopolitical ambitions. With the yuan-denominated credit line and expansion of visa-free travel, Xi's overtures signal not only China's growing economic clout in what the US under President Donald Trump views as “America’s backyard”, but also its determination to establish alternative pathways for international commerce and diplomacy that increasingly bypass the US dollar system.