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Chinese President Xi Jinping has officially opened a Chinese-funded deep-water mega port in Peru.
Let’s bring you up to speed: The Chancay Port, a $3.6 billion deep-water port located roughly 50 miles north of Lima, Peru, is a state-of-the-art infrastructure project aimed at transforming Peru into a key trade hub between South America and Asia. Construction began in 2019 as part of a joint venture led by China’s Cosco Shipping Ports, which invested $1.3 billion for a 60% stake in the project. Under the agreement, Cosco received exclusive operating rights for 30 years, a deal that sparked some local controversy but was ultimately upheld. The port, designed to handle the largest cargo ships too big for the Panama Canal, features cutting-edge logistics technology, including automated cranes and electric driverless trucks, and is a central piece of China’s “Belt and Road Initiative.” The project is expected to generate $4.5 billion in annual revenue and create over 8,000 jobs.
What’s the deal: Yesterday, Chinese President Xi Jinping and Peruvian President Dina Boluarte celebrated the inauguration of the Chancay Port, with Xi emphasizing the project’s role as a cornerstone in strengthening China-Peru relations. Xi described the port as the beginning of a “21st-century maritime Silk Road” and highlighted its potential to forge a “new maritime-land corridor between China and Latin America.”
Xi also praised the collaboration between the two nations, stating, “China is ready to work hand in hand with our Peruvian friends with one heart and with the same goal and steer the ship of our friendship toward an even brighter future.” Boluarte, in turn, echoed Xi’s sentiments, calling the port “a key engine for Peru’s economic growth” and an important bridge linking Latin America with Asia. Both leaders also signed an expanded free trade agreement during their meeting, which is intended to deepen their economic ties.
Digging deeper: Chinese officials have openly said that the new port is vital to China as it provides a direct trade link between Asia and South America and reduces shipping costs and times by up to 20% compared to traditional routes. Unlike routes dependent on the Panama Canal, Chancay can accommodate the largest cargo ships that are too big to pass through the canal, positioning it as a competitive alternative for regional and transcontinental trade. This advantage strengthens China’s access to critical resources like copper, coffee, and soybeans. The port also bolsters China’s influence in Latin America, offering a foothold in a region traditionally aligned with US interests.
Concerns from the US: The United States has expressed significant concern over the Chancay Port, warning that it could serve as a strategic foothold for Chinese military and intelligence operations in the Americas. Gen. Laura Richardson, the former head of US Southern Command, stated that the port “absolutely” has the potential to host Chinese navy warships, citing it as part of a broader Chinese playbook observed in other regions. China has consistently denied military intentions, calling US allegations “smears” and asserting the port’s purely commercial purpose.
