Peru seeks to take advantage of its historical ties with China and further strengthen its commercial relationship

That China has become Peru’s first trading partner is just the tip of the iceberg of the great influence that the Asian giant has and has had in the Andean country.

Peru has the largest community of Chinese descendants in Latin America and their influence covers various aspects from social to cultural, and even gastronomic.

175 years have passed since the first Chinese immigrants arrived in Peruvian lands, through a rule that facilitated their access to the country due to the need for labor in agriculture after slavery was abolished in the country, according to various historians.

The majority came from Canton, Macao or Hong Kong and were employed mainly in large cotton and sugar cane plantations on the coast, in guano tobacconists and in the construction of the Central Railway. Historical data indicates that some 100,000 Chinese citizens arrived in the country between 1849 and 1874 alone.

According to official data, 10% of the Peruvian population is of Chinese origin and a few years ago a renowned Peruvian diplomat stated that “Peru is the most Chinese country in Latin America.”

Commercial ties

“Already in the 20th century, diplomatic relations were established between Peru and China. “Peru was one of the first countries to establish diplomatic ties in 1971. There are already more than 50 years of diplomatic relations,” he told the Voice of America Jorge Antonio Chávez, internationalist and expert in Asian politics. In 2009, commercial ties began to be strengthened with the signing of a free trade agreement and the fruits of this were already beginning to be seen, he explained.

“36% of everything Peru exports goes to China. “It is our main business partner, without a doubt, and one of our main investors,” said Chávez.

According to data from ComexPerú, a business association that brings together the main exporting, importing and service-providing companies, trade between Peru and China reached around 37 billion dollars in 2023 and is increasing, taking into account that in 2010 it was of 10.5 billion.

“If we look only at our exports, in 2010 they were 5.5 billion dollars and now they are 23 billion,” he told the VOA Rafael Zacnich, manager of economic studies at ComexPerú.

More than 90% of the products that Peru exports to China are raw materials, especially minerals such as copper, of which the Andean country is the second largest producer in the world. It also sells fishmeal, frozen squid and agricultural products such as blueberries, grapes and avocados.

For its part, China sells smartphones, laptops, communication systems, among others, to the Andean nation.

“China is already our main trading partner and this is expected to continue to increase. In Peru we have to be aware that we need private investment to grow,” said Zacnich.

First Chinese megaport in Latin America

The buoyant commercial link between China and Peru is also crystallizing in the investment of 3.5 billion dollars that the Chinese state company Cosco Shipping is making to build a megaport in Chancay, 80 kilometers north of Lima, which due to its depth will allow you to receive the largest ships in the world. In addition, it will be China’s only port in Latin America.

“It will be a multipurpose port that will mobilize containerized cargo, general cargo, non-mineral bulk cargo and rolling cargo, becoming a regional trade hub and South American maritime node towards Asia and Oceania,” the firm says on its web portal.

“The geographical position, current and future connectivity of the port of Chancay will contribute to the decongestion of other port management centers by providing shorter times, greater efficiency and better competitive conditions for users, energizing the country’s economy, promoting exports and generating new business opportunities,” he adds.

The port is already more than 80% complete and the Peruvian government hopes that it will be ready in November of this year and that Chinese President Xi Jinping himself will inaugurate it.

“The shipping time between Chancay and Shanghai will be reduced between 8 and 10 or 12 days. We are talking about that if before products were sent from the (port of) Callao (currently the main Peruvian port) to Shanghai and it took around 35 days, now it would be 23 and that generates gains in competitiveness, in added value,” said Zacnich.

And to promote more Chinese investments in the country, Peruvian President Dina Boluarte, accompanied by a large entourage, which will be made up of several ministers and businessmen; She will travel to China on an official visit from June 23 to 30.

“The expectation with this trip is very great. China is Peru’s first trading partner today, not even 10% of its market opportunities have been taken advantage of,” the president of the Council of Ministers, Gustavo Adrianzén, recently told foreign correspondents.

For analyst Chávez, it is a “fundamental” visit because after 8 years a Peruvian president will return to China. “The cities being considered to visit reflect the importance of the trip: Shenzhen, home of technology companies such as Huawei and BYD; Shanghai, which is the financial heart of China; Beijing, which is the political heart of the country.”

And the relations with the US?

The Peruvian prime minister ruled out that due to greater Chinese investment in the Andean country, the relationship it has with the United States will suffer.

“We do not believe that our friends, countries with a great tradition of friendship and historical relations like the United States, are going to feel resentful because we bring Chinese investments,” he said.

“As a country with an economy like the one we have, we receive investments from any country and we have investments that come from the United States, Canada, also from Europe, Spanish, English and also other Asian investors,” he said.

Analyst Chávez considered that “the United States must understand that if it does not invest in the region, China will continue to grow… China is taking the space that the United States felt belonged to it.”

For his part, Zacnich stated that “in global trade you have to have your markets diversified. Whatever you have for countries A, B, and C, the main beneficiary has to be your country, the consumer, with products at competitive prices and with exporting companies accessing markets that pay a price, that pay higher returns, regardless of whether A or B doesn’t like it.”

“Are you going to satisfy the needs, tastes or appetites of third countries or do you prefer to satisfy the common good, which would be giving opportunities to your exporters, your importers, the generation of employment and so on? We must be very clear about that,” he claimed.

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