China has been building a megaport in Peru for eight years. It has just been released to revolutionize South America

China has put Latin America in the spotlight. China and Mexico have a kind of love affair with Mexico achieving infrastructure, transportation and improving its economy, while China achieves an entry route for its products into the United States. Looking further south, the Latin American west coast has been very juicy for Xi Jinping’s government for years.

An example is the port of Chancay in Peru. Its construction began eight years ago and the first phase of operation has just inaugurated, coinciding with the visit of Xi Jinping himself to the Latin American country. It will be brutal and it is expected to be good both for Latin America… and for China’s influence in the region.

Chancay. The Chancay Multipurpose Port Terminal is about 80 kilometers north of Lima. The locality It has only about 63,000 inhabitants, but very soon it will become one of the most important nerve centers on the American continent due to the arrival of China.

And it is no wonder: when it is 100% completed, it will have an area of ​​992 hectares, 1.5 million containers and six million tons of cargo will be able to be shipped per year and it is estimated that the cost will be 3.6 billion euros. .

Strategic point. As they collect From BBC, the importance for China (and for Latin America) of this port is enormous. Raúl Pérez Reyes is Peru’s Minister of Communication and Transportation, and recently commented that the port will allow his country to position itself “as a logistics hub throughout Latin America.” Furthermore, Chancay was not chosen by chance: its port has a deep draft, enough to accommodate the largest container ships in the world.

Robert Evan Ellis, from the Institute of Strategic Studies of the United States Army, commented to the BBC that “with Chancay, a direct and faster route is opened between China and Latin America. It is like a bus route that previously made all the stops and now goes straight to the destination.” This translates, according to government estimates, into a reduction in time from the current average of 40 days to 28 days.

Positive for Peru. The Peruvian government estimates that this port will generate more than 7,500 direct and indirect jobs, but not everyone is so sure, stating that in other places on the continent, when China has carried out large works, they have used more displaced labor from China than local ones.

If we talk about money, the Ministry of Production affirms that the logistics centers associated with the port will contribute about 4.5 billion dollars a year to the Peruvian economy, which represents 1.8% of the country’s GDP. That is when it is complete, but with the phase that is inaugurated now, the Central Bank estimates that it will already add 0.9% of GDP for next year.

The United States does not take its eyes off. Ellis, however, warns that “with Chancay, Peru will become more dependent on China.” Furthermore, he recalls that “in other relations between Latin America and Asia, we have seen how China used predatory techniques and, in the end, ended up taking natural resources, increasing the dependence of the countries in which it settles.”

In fact, although it is not really related to the port, Peru is already experiencing a complicated phase with China. The reason is that the Asian giant is short of its fishing grounds and hundreds of Chinese fishing boats come and go to the Peruvian coast, which is causing a fishing deficit for the country and the increase in prices of some products.

Not everyone is happy. However, other countries in the region do not view this association so favorably. An example is Chile. Germán Correa is the country’s former Minister of Transportation and Telecommunications and recently signed an opinion column that stated that “Chile will inevitably be left behind” in world trade by having allowed Peru to take the lead, with “others being the ones who will benefit from the tremendous development impact that the gigantic Peruvian port of Chancay will bring.

And yes, Chile is trying to modernize its ports and there are some that are really sweet for both China, Europe and the United States, but it seems that they do not find the key to meeting environmental requirements. Meanwhile, they risk being left without the capacity to receive larger container ships.

Brazil. But it is not only the west coast countries that are seeking to have relations with China. Brazil, on the other side of the continent, is another very interested in this market. As we read in Global Timesalmost half of Brazilian exports are from agribusiness, with China being the main destination between July 2023 and July 2024.

And there are already voices that affirm that, if Brazil gained access to the Pacific, potentially through the port of Chancay, they could significantly increase the volume of their exports thanks to a shorter, faster and cheaper route than the current one, which involves giving all the return by sea In fact, and as the former Peruvian ambassador to China Juan Carlos Capuñay comments, Chancay “will serve as the main logistical and operational center to connect South America with the Asia-Pacific region.”

We will see what happens, but it is clear that the region has many interests with China, so much so that the BRI, which is a kind of new Silk Road to improve relations with the Asian country, is already made up of 22 Latin American countries and the Caribbean.

Image | Cosco Chancay

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