Chinese President Xi Jinping recently embarked on a week-long diplomatic tour of South America, marking the visit with the grand opening of the Chancay Port, located about 80 kilometers north of Lima, Peru. This port, which is cited to be the first Chinese-funded port on the continent, is part of Beijing's ambitious $1.3 billion investment to boost trade and exert influence across Latin America.
Participated via video link, President Xi was joined by his Peruvian counterpart, President Dina Boluarte, as they celebrated the launch of this new maritime facility, which they hope will solidify Peru's status as the gateway connecting Asia and Latin America. Xi stated, "Chancay Port will consolidate Peru's position as the gateway connecting land and sea, Asia and Latin America," as reported by Xinhua news agency.
This project serves as the first phase of what Xi termed the “21st century Maritime Silk Road,” which is aligned with China’s broader Belt and Road Initiative. It aims to create new trade routes, reducing logistics costs by 20 percent. According to estimates, the Chancay project has the potential to generate approximately $4.5 billion in annual revenue and create over 8,000 direct jobs.
The Chancay port is equipped with 15 shipping berths, offering significant capacity for various imports and exports. The inauguration figures prominently within the larger backdrop of Xi’s visit to participate in the Asia-Pacific Economic Cooperation (APEC) summit and then continue to the Group of 20 summit next week, where he is expected to meet with President Biden of the United States.
Interestingly, U.S. officials have become increasingly wary of Chinese efforts to deepen their foothold across Latin America, particularly amid concerns over debt dependency arising from Chinese investment projects. Brian Nichols, the U.S. diplomat for Latin America, expressed caution, stating, "We believe it is important for countries across the hemisphere to remain vigilant and for economic activities from the People's Republic of China to honor local laws and protect human rights.”
While Chinese investments flood the region, U.S. policymakers continue reminding Latin American countries of the long-standing ties binding them to Washington. A notable example includes the recent provision of support to Peru from the U.S., underlining the country’s commitment to combatting transnational crime, featuring military donations and space cooperation efforts through NASA.
The geopolitical tug of war is palpable, with Xi emphasizing the collaborative nature of the Chancay project and dismissing U.S. fears over potential military uses of the port. A statement from the Chinese state-backed Global Times downplayed these concerns as unfounded, branding them mere criticisms rather than reflections of reality.
The strategic significance of the port is magnified with China’s growing appetite for raw materials and agricultural goods, particularly from neighboring Brazil. Future investments are proposed for establishing railway links from Brazil, which could facilitate much-needed transport of goods like soybeans directly to Chancay, representing another layer of economic interdependency being forged throughout the region.
Mario Ocharan from the Chancay Chamber of Commerce anticipates immediate benefits, pointing out how the first ship is scheduled to leave the port within the week, transporting fresh Peruvian fruits to the Chinese market.
Overall, this significant development at Chancay Port not only symbolizes China’s rising role as the dominant partner for trade throughout Latin America but also points to the shifting dynamics of international relations where U.S. influence is increasingly under strain. It raises the question: how will Latin America navigate this new reality as it balances relationships between two superpowers vying for influence?
