Chinese President Xi Jinping visits Peru this week for the Asia-Pacific Economic Cooperation (APEC) summit, during which he will inaugurate the deep-water port of Chancay, about 45 miles north of Lima. It’s a $3.6 billion project—one of China’s largest infrastructure investments in the region in the past two decades.

It also may be one of the last of its kind.

Chinese President Xi Jinping visits Peru this week for the Asia-Pacific Economic Cooperation (APEC) summit, during which he will inaugurate the deep-water port of Chancay, about 45 miles north of Lima. It’s a $3.6 billion project—one of China’s largest infrastructure investments in the region in the past two decades.

It also may be one of the last of its kind.

Upon becoming president in 2013, in an attempt to deepen the so-called going out strategy and find new markets for booming Chinese production, Xi initiated a reform agenda that intensified diplomatic outreach and boosted overseas investment, the capstone of which was the Belt and Road Initiative (BRI).

Big infrastructure contracts were a win-win move: They allowed China to offload excess capacity of steel, labor, and other inputs while providing urgently needed infrastructure to Latin America. Since 2017, 22 countries in Latin America and the Caribbean have formally joined the BRI, utterly transforming China’s relationship with the continent. China is now Latin America’s second-largest trading partner, after only the United States.

But after two decades of growing sway in the region, Beijing is taking a new approach. As it struggles to manage an economic slowdown, a mounting debt burden, and a broken real estate market, Beijing is bringing an end to the era of high-risk, high-cost mega-infrastructure projects in favor of smaller, new frontier investments in cloud computing, 5G technology, renewable energy, artificial intelligence, and electric vehicles.

China has pitched its new strategy to the world as visionary and forward-looking. Its Latin American partners, however, are less convinced.

The significant, long-standing infrastructure gap in Latin America has made leaders hungry for external investment. Whereas the United States and the European Union have been reluctant to put up large sums, China was happy to get involved.

BRI money has funded roads through the jungles of Costa Rica; railways in Bolivia and Argentina; industrial parks and a container port in Trinidad and Tobago; the biggest hydroelectric plant in Ecuador; and the first transoceanic fiber-optic cable directly connecting Asia to South America, stretching from China to Chile, among other projects.

These big infrastructure projects have paralleled increased Chinese investments in soft power and diplomacy. The United States used to be very adept with its Latin American partners, but China has overtaken it, said Benjamin Creutzfeldt, a China scholar.

“The Chinese have become better at engaging through charm offensives with their charismatic ambassadors,” he said. “They learned how to deal with........

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