China’s Chancay Mega Port: Economic Opportunity or Strategic Concern?

Photo: Presidencia Perú Flickr.

Chinese President Xi Jinping and his Peruvian counterpart Dina Boluarte virtually inaugurated the Chancay mega port in Peru, a $1.3 billion investment funded by Chinese shipping giant Cosco. Xi described the port as a bridge connecting Asia and Latin America, emphasizing its potential to generate jobs and revenue for the Andean nation. Touted as South America’s first “green and smart” port, Chancay is expected to cut shipping times between the two regions from 35 to 25 days by bypassing stops in Mexico and California.

The project, however, has raised concerns in the United States, which views it as part of China’s growing influence in a region long considered within its sphere of interest. Parsifal D’Sola, Executive Director of the Andrés Bello Foundation (ABF), remarked, “The People’s Republic of China has a well-documented history of leveraging economic influence—often by restricting market access or halting the purchase of key exports—to advance its interests in other regions, such as Africa and Southeast Asia.” He warned that many policymakers across Latin America and the Caribbean might underestimate or overlook these risks in pursuit of economic gains.

Nonetheless, D’Sola argued that fears of China using the port to bolster its military presence in the region are “overstated” and noted there would be “little strategic advantage” for Beijing in doing so. He also pointed out that Peru and other nations, including those with adversarial relations with the United States, such as Venezuela and Cuba, would likely avoid granting Chinese naval vessels access if it were perceived as a threat by the U.S.

Peruvian officials have defended the project, assuring that the port will remain under national oversight despite Cosco’s 60% stake. However, some local residents have voiced concerns about environmental damage to the marine ecosystem, which is crucial to Chancay’s fishing economy. The port’s inauguration coincided with the APEC forum in Lima, where Xi and other leaders discussed economic collaboration. Official figures show that trade between China and Latin America reached $489 billion in 2023 and is projected to surpass $500 billion by 2025.

Main Source:

China’s Xi Unveils Megaport in America’s Backyard Amid US Concerns

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Xi Jinping hails Peru megaport as new era in China’s belt and road ambitions