As the US-China rivalry expands beyond trade wars and tech, the real battle for global influence is unfolding across the Global South — here’s where both powers are putting their money
From Africa to Latin America to Southeast Asia, Washington and Beijing are racing to expand their economic and strategic footprints. But who is actually investing more — and where?
We break it down below.
1. Total Investment: The Big Picture
Foreign Direct Investment (FDI) trends provide the clearest baseline comparison.
Latest 2025 data (UNCTAD and regional sources):
- China’s FDI stock in the Global South: approx $1.4 trillion
- US FDI stock in the Global South: approx $900 billion
China maintains a clear lead — especially in Africa and Central Asia — though the US is gaining ground in Latin America and Southeast Asia through private sector partnerships.
Momentum: China’s state-driven FDI slowed slightly post-COVID, but new green energy and digital investments are accelerating. US corporate FDI is trending upward, thanks to nearshoring and clean tech demand.
China’s Growing Influence in Latin America and Africa: https://worlddiplomacyhub.com/wp-admin/post.php?post=167&action=edit
2. Infrastructure Spending
China remains the dominant player in physical infrastructure.
- Belt & Road Initiative (BRI 2.0) → major projects in railways, ports, power plants across Africa, South Asia, and parts of Latin America.
- Key 2025 projects: Kenya Standard Gauge Railway, Pakistan energy corridor, Brazil port modernization.
US approach:
- Blue Dot Network → promoting transparent infrastructure standards.
- US-backed multilateral bank projects (World Bank, IDB, DFC) → focused on roads, energy, digital infrastructure.
- US infrastructure impact is growing but remains smaller in scale than China’s state-led BRI.
Regional tilt:
- Africa: China dominant
- Latin America: China strong in ports/mining; US regaining influence via bank consortia
- Southeast Asia: competitive space → both sides investing
3. Tech & Digital Investment
China’s strengths:
- Major AI, 5G, and surveillance tech deals → particularly in Africa (Kenya, Ethiopia), Southeast Asia (Cambodia, Laos).
- Huawei leads in digital backbone projects — 5G rollout, data centers.
US strengths:
- Silicon Valley partnerships → cloud infrastructure, fintech, AI governance.
- Heavy focus on Latin America: major cloud investments in Mexico, Brazil, Colombia.
- Clean tech → US private sector leading in solar, storage, and smart grid solutions.
Current edge:
China dominates hardware and infrastructure layers in many regions. The US leads in software, cloud, and open AI partnerships — especially where privacy standards matter.
How Global Markets Are Reacting to US-China Rivalry: https://worlddiplomacyhub.com/wp-admin/post.php?post=169&action=edit
4. Green Energy & Climate Finance
China:
- World’s largest green investor → particularly in solar manufacturing, EV battery production, hydropower.
- Big presence in Latin America’s lithium triangle (Argentina, Chile, Bolivia).
- Solar megaprojects in Africa and Central Asia.
US:
- Leading on climate financing through World Bank and new green bonds.
- Private-sector leaders investing in solar farms, wind energy, carbon capture → particularly in Latin America.
- Just Energy Transition partnerships (JETP) → active in Indonesia, South Africa.
Green race status:
China dominates production and upstream investment.
US is catching up in green finance, transition partnerships, and tech solutions.
5. Military & Security Investments
China:
- Expanding arms sales → particularly to Africa (Nigeria, Algeria), Central Asia, and select ASEAN states.
- Building police/security training programs — e.g., Ethiopia, Tanzania.
- Growing private security footprint linked to Belt & Road projects.
US:
- Major military aid still flows to Philippines, Kenya, Jordan, Colombia.
- Joint military exercises → increased with Southeast Asian partners under Indo-Pacific strategy.
- Recent base access agreements → renewed deals in Philippines, new dialogues with Kenya.
Current balance:
- China’s security investments remain more policing-focused → geared toward infrastructure protection.
- US leads in military-to-military cooperation and defense partnerships — especially in maritime security.
6. Diplomatic & Soft Power Spending
China:
- Confucius Institutes → still active, though scaled back in some Western-leaning regions.
- Scholarships → thousands of Global South students studying in China.
- Cultural diplomacy tied to Belt & Road media platforms.
US vs China: Who Is Winning the Global AI Race in 2025: https://worlddiplomacyhub.com/wp-admin/post.php?post=161&action=edit
US:
- Fulbright and USAID programs → seeing new funding boosts.
- Media partnerships and civil society programs expanding across Africa and Southeast Asia.
- Public diplomacy increasingly aligned with democracy promotion and digital freedom narratives.
Soft power edge:
China’s soft power remains strong in education and infrastructure-linked diplomacy.
US is gaining in media, civil society, and education — especially post-pandemic.
7. Regional Leaders: Where Each Side Is Strongest
China strongest in:
- Africa → leads in infrastructure, trade, and energy.
- Central Asia → dominant in FDI, infrastructure, and security tech.
- Parts of Latin America → strong in commodities trade, energy, and transport.
US strongest in:
- Latin America → strong in private-sector investment, energy, finance.
- Southeast Asia → gaining ground in digital, security partnerships.
- Pacific Islands → renewed focus through diplomatic engagements and development programs.