International trends
Chancay Port in Peru: A New Focal Point in U.S.-China Economic and Strategic Competition in Latin America
A deep-water port project worth $3.5 billion is being constructed in Chancay, Peru, with major backing from China's state-owned enterprise, Cosco Shipping. This port is part of China’s expansive Belt and Road Initiative and is anticipated to be operational by the close of 2024. Once completed, it will open up direct shipping lanes between South America and Asia, cutting down transit times significantly for products such as soybeans, corn, and copper on their way to China.
The United States has expressed concern that this new port, capable of accommodating large vessels for direct voyages between Peru and China, could disrupt existing trade patterns. There are fears that it could enable China to more easily access and dominate the extraction of South American resources, thereby increasing China’s economic sway in the region.
There is also anxiety that the port could be repurposed for military activities. General Laura Richardson from the U.S. Southern Command has pointed out that such infrastructure could serve dual purposes, where commercial facilities might be adapted for military use. This includes potential risks related to data security and the management of cargo scanning and logistics.
The Chancay port is expected to significantly elevate Peru’s role as a central trade hub, boosting exports from not only Peru but also neighboring countries like Brazil. This port development is seen as a strategic move by China to bolster its economic relationships in Latin America, a region increasingly becoming a focal point in the global competition for resources.
In response to U.S. apprehensions, Peruvian authorities have suggested that if the U.S. is uneasy about China’s growing presence, it should consider increasing its investments in the region. This reflects a broader trend in Latin America, where nations are increasingly turning to China for funding and development projects due to a substantial deficit in infrastructure investment.