Chile said on Wednesday it was reviewing an agreement for the construction of a Chinese astronomical observatory on its soil, a project that has drawn criticism from Washington as it jostles with Beijing for influence in Latin America.

Under an agreement signed by President Xi Jinping in 2016 with Chile's Catholic University of the North (UCN), the Ventarrones Astronomical Park was to be built in Chile's Atacama desert - home to the world's darkest skies and numerous other observatories.

"The project is under review, it is not cancelled," the foreign ministry in Santiago said in a statement, without providing reasons.

The ministry said its legal department was studying the agreement and had contacted the UCN and the Chinese embassy for more information.

UCN said it had made the requested data available. The embassy said the observatory was "an open and transparent international initiative."

Two-thirds of Latin American countries have joined Xi's trillion-dollar Belt and Road Initiative infrastructure program, and China has surpassed the United States as the biggest trading partner of Brazil, Peru, Chile and several other countries. (AFP)