Xi Jinping Inaugurates South America’s First Chinese-Funded Port in Peru

Chinese President Xi Jinping virtually inaugurated the Chancay port in Peru on Thursday, marking a major milestone as the first Chinese-funded port in Latin America. The $3.5-billion facility underscores Beijing’s growing influence in the region and its strategic push to enhance trade connectivity.

A New Trade Hub for Asia and Latin America

Located 50 miles (80 kilometers) north of Lima, the Chancay port is designed to facilitate trade between South America and China, offering an alternative to ports in Mexico and the United States. Peruvian President Dina Boluarte hailed the project as vital to the country’s economy, stating:

“China plays a major role in the growth of our economy.”

Xi Jinping described the port as a “new land-sea channel” connecting Asia and Latin America, calling it South America’s “first smart and green port.” Once fully operational, it is expected to cut transit time between China and Peru by more than 10 days and reduce logistics costs by over 20%.

Strategic and Economic Significance

The Chancay port will serve several South American countries, including Chile, Colombia, and Ecuador, facilitating imports of Asian goods like electronics and textiles while boosting exports of critical minerals such as lithium and copper.

Cosco Shipping Ports, a subsidiary of China’s COSCO Shipping Corporation, holds a 60% stake in the port with a 30-year concession to operate the terminal. The facility is projected to handle up to one million containers in its first year and accommodate the world’s largest container ships with its 17.8-meter depth.

US-China Rivalry in Latin America

The port’s inauguration comes as tensions between the US and China escalate. US President Joe Biden also arrived in Peru for the Asia-Pacific Economic Cooperation (APEC) summit, highlighting Peru as a “crucial ally.”

Brian Nichols, the top US diplomat for Latin America, urged regional governments to ensure that Chinese investments respect local laws and safeguard human rights and environmental protections.

Part of the Belt and Road Initiative

The Chancay port is the latest addition to China’s Belt and Road Initiative, which has financed infrastructure projects worldwide to stimulate trade and expand Beijing’s political influence.

Peru, China’s fourth-largest trading partner in Latin America, conducted nearly $36 billion in bilateral trade in 2023, further solidifying its role as a key player in Beijing’s trade network.

With its strategic location and massive potential, the Chancay port is poised to become a significant hub for Asian and South American trade, reshaping the region’s economic landscape.