China increases control of Peruvian Energy Supply and state influence

Photo: Lima By: Alcaldía de Lima Source: MUNICIPALIDAD DE LIMA

The growing control that China is exerting over Peru’s critical infrastructure has become a matter of increasing concern at both the national and international levels. As Chinese companies continue to acquire strategic assets in sectors like energy and mining in Peru, a debate has emerged regarding the benefits and risks of this dependence on China. A recent report by The Financial Times highlights the lack of comprehensive analysis by the Peruvian government concerning the implications of this increased control being handed over to China. The agreement between Enel, an Italian company that manages a significant portion of Peru’s energy, and China Southern Power Grid Co. has raised concerns. The National Institute for the Defense of Competition and the Protection of Intellectual Property (Indecopi) expressed concerns about potential competition-restricting effects arising from this agreement. 

Of particular concern is that if the purchase-sale contract between Enel and China Southern Power Grid is approved, China could have 100% control of the electric distribution market in Lima. This raises questions about China’s ability to influence the energy supply in the Peruvian capital and the potential vulnerability this could create in the region. As trade relations between Peru and China continue to expand, there is a need to balance economic opportunities with national security and independence.

In addition to investments and control over energy and infrastructure, there are concerns about China’s dual-use strategies in the region. The construction of high-capacity ports, capable of serving both commercial shipping and naval refueling, has raised apprehensions about China’s influence projection in Latin America. The deployment of technologies such as 5G mobile networks and space surveillance stations further amplifies the technological dimension of these concerns. Ultimately, China’s expanding influence in the region poses significant challenges and calls for a thorough analysis of the long-term risks and benefits for the countries involved.

Top headline:

Infobae (2023, October 4). China controla el 100% de la energía en Lima y condiciona al gobierno de Perú.

Find out more:

Semana, R. (2023, October 4). China, el nuevo amo de Lima: controla la energía y condiciona al gobierno.