A political transition is underway in Chile this week. President-elect José Kast will be sworn in on Wednesday, and Chile’s long-standing commercial relationship with China will be put to the test.
Just days before the inauguration, a dispute about a Chinese submarine cable project has led to a halt in presidential transition talks between Kast and outgoing president Gabriel Boric. While the inauguration itself will proceed as planned, the event showcases how deeply great power competition has become embedded in domestic politics. The digital infrastructure project is no longer a commercial policy decision; instead, it has become a litmus test for geopolitical alignment for Chile and emblematic of the growing pressures facing South American nations as they navigate an increasingly complex strategic environment.
The Breakdown of Chile’s Presidential Transition
The presidential transition is one of the bedrocks of Chile’s democratic system. Since the end of the 17-year military dictatorship of Augusto Pinochet in 1990, this tradition has remained firmly in place. It began with Pinochet, who partook in Patricio Aylwin’s swearing-in ceremony, marking the end of his rule and a return to democracy.
The transition has taken on important symbolism in Chilean politics. The process joins the outgoing and incoming administrations, showing them working together, hand-in-hand, to keep Chile moving forward. The transition has happened regardless of ideology or political party and has been a sign of maturity for the Chilean democracy.
2026 has brought this tradition to an abrupt end. Recently, reports emerged that the Boric government granted a concession to a Chinese consortium composed of Chinese telecom giants China Mobile International, China Unicom, and China Telecom for a submarine cable project connecting Concón, Chile with Hong Kong. Another Chinese company, HMN Tech – formerly affiliated with Huawei – would be charged with the manufacturing, installation, and deployment of the cable. The companies were also accused of lobbying government officials of the Ministry of Transportation and Telecommunications for the project.
The tense situation was made worse when the United States got involved. The U.S. State Department announced that it was revoking the visas of three Chilean officials involved in granting the concession, which was deemed a security threat. One of the sanctioned officials was Transportation and Telecommunications Minister Juan Carlos Muñoz.
After this, President-elect José Kast decided to halt all presidential transition talks, just a few weeks before his inauguration, arguing that he was never informed of the consequential decision to grant the concession. For his part, Boric claims that in a meeting on February 18, 2026, i.e. two weeks before the crisis, the President-elect had been duly informed of the decision, as well as of the threats the current administration had received from the U.S.
Beijing’s response came in a statement stressing that the trans-Pacific cable did not affect the interests of any country and that the U.S. wanted to maintain a de facto monopoly over international telecommunications. China’s Ambassador to Chile emphasized the strong partnership between Chile and China, and the need to improve connectivity between the two countries and the broader Asian region.
Chile’s Bid to be a Digital Gateway
The “Chinese cable,” as it is being referred to in the Chilean press, is part of a broader strategic effort by Chile to become one of the major hubs in the Americas for submarine cables.
As of now, Panama serves as the major strategic hub for South America, with landing points at both ends of the oceans and connecting all the South American Crossing (SAC) system. Chile has already strengthened its own position by linking South America directly to the United States through Valparaíso.
Together with the Humboldt cable, which will connect Valparaiso to Sydney via French Polynesia, this infrastructure would help Chile position itself as a major inter-regional cable hub. The proposed Concón-Hong Kong cable would further consolidate that role.
But what are the tangible benefits of the submarine cable? It will serve as a digital highway between South America and Asia, or more specifically, China. This would allow for speedier and more stable internet, thus attracting investments in technology and data centers and facilitate digital commerce with Chinese markets. Simply put, it would turn Chile into a key digital gateway connecting China to the Southern Cone.
Why Washington Cares
From Washington’s perspective, Chile’s decision to partner with China on digital infrastructure was a rather consequential one. It cannot be equated to trade in commodities, infrastructure, or standard foreign direct investment. The project touches a particularly sensitive area for the U.S.: data and communications infrastructure, with potential implications for intelligence. In this sense, the U.S. sees Boric’s decision to build the Chinese submarine cable as a strategic alignment with China in the digital infrastructure sector.
Given the U.S.’ renewed interest in “reasserting dominance” in the Western Hemisphere, it is no surprise that the cable decision was met with swift countermeasures.
A Shrinking Space
Caught in the middle of it is President-elect Kast. Regardless of whether he was informed or not, this episode encapsulates a rather inconvenient truth: in the era of great power competition, Chile’s margin for strategic ambiguity is shrinking, particularly in light of the expectations of certain circles in Washington that a Kast administration would recalibrate Chile’s strategic posture vis-à-vis China.
Chile’s longstanding tradition of balancing close political ties with the U.S. against a deep commercial partnership with China seems now structurally constrained. When digital infrastructure serves as a tool of strategic alignment, even technical decisions carry geopolitical consequences. Whether Santiago opts for closer coordination with Washington or seeks greater strategic autonomy through diversification, either path carries costs. In any event, the submarine cable controversy may prove to be only the first test of Kast’s broader alignment dilemma.
Alonso Illueca is CGSP’s Non-Resident Fellow for Latin America and the Caribbean.
