For years, U.S. officials have fretted about Chinese megaprojects in Latin America. Successive administrations have, for example, sounded the alarm about Peru’s Chancay Port, which is controlled and operated by a Chinese shipping giant, and about the Chinese-built Coca Codo Sinclair Dam, in Ecuador. In response, Washington has issued diplomatic condemnations against Latin American officials, revoked visas, and even threatened to use force against the region’s governments.

It is easy to see why the United States is so worried about major infrastructure being built and operated by China. In the eyes of many U.S. officials, these projects are a way for Beijing to accumulate leverage over Latin American governments—a concern that Washington has voiced since 2017, when the first Trump administration’s National Security Strategy warned that China sought to “pull the region into its orbit through state-led investments and loans.”

But Washington is stressing about yesterday’s challenge. Beijing is no longer betting on multibillion-dollar megaprojects to improve its position in the Western Hemisphere. Instead, it is embedding itself in the region by fostering smaller, quieter endeavors, often at the municipal or provincial level. Chinese firms are developing lithium projects in multiple Argentine provinces. They operate every power distributor serving the Peruvian city of Lima. And they are providing gear to Latin American police officers in many municipalities across the region, as well as installing surveillance camera systems.

Individually, these actions might seem superficial. But in aggregate, they are making recipient states dependent on China. Beijing’s security provisions, for example, mean that plenty of Latin American cities and provinces now effectively rely on China for their law enforcement and emergency response infrastructure, and, in Lima’s case, electricity infrastructure. It is a dependence that many national politicians never intended and may not even have seen coming. They may not be aware of the potential risks associated with this level and type of dependence and may not be prepared to manage the potential fallout.

These endeavors are not unique to Latin America. China is engaged in similar efforts in other parts of the developing world, as well. They are, after all, much cheaper than many of its earlier initiatives—and more difficult to identify. Beijing, in other words, is pioneering a kind of statecraft that privileges quiet, subnational capture over big, flashy projects.

During much of the 2010s, Beijing poured billions of dollars into in Latin American infrastructure, such as ports, massive dams, and even a transcontinental railway meant to link Peru’s Pacific coast to Brazil’s Atlantic. (The railway was never constructed, but versions of it are still under discussion.) These investments came as part of China’s famous Belt and Road Initiative, in which it has spent enormous sums on megaprojects across the global South. In doing so, China hoped it could secure commodity supplies, open markets for Chinese firms, and then convert its economic weight into diplomatic alignment—including convincing countries that still recognized Taiwan to switch recognition to the mainland.

But starting in the early 2020s, China changed course, particularly in the Western Hemisphere. Big projects, it concluded, cost too much at a moment when the Chinese domestic economy was under strain, and drew too much geopolitical backlash. Instead, it opted to focus on what it calls “small but beautiful” endeavors. These are investments that do not have an imposing physical presence and are typically aimed at smaller national and subnational systems. Beijing itself applies this label narrowly: its 2025 white paper on Latin America reserves the term for small poverty-reduction projects. But the phrase is a useful lens for this newer kind of Chinese statecraft—one of bottom-up investments that compound into interdependence and leverage.

To see how important this model has become, simply follow the money—or at least the parts that can be counted. Traditional Belt and Road loans to the region have faded from nearly $25 billion in 2010 to an average of $1.3 billion a year. But judging by estimates that track deals firm by firm, Chinese companies still invested $8.5 billion in Latin America in 2024, down just a tenth from the year before—and that figure is likely an undercount. The difference is that this money now flows through commercial transactions rather than through sovereign loans from Beijing. Much of it manifests in........

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