This paper presents a critical analysis of the transnational interplay of cultural, educational and economic forces that culminated with the establishment of a Chinese language and cultural centre in Peru, the Confucius Institute. Confucius Institutes are government-sponsored cultural centres devoted mainly to Chinese language education around the world. They have been referred to as examples of China's soft power and subjected to criticisms. With a substantive theory of power as the departure point, this article analyses the power relations surrounding the case of Confucius Institutes in Latin America.