Xi Jinping’s latest diplomatic tour began this week in Peru, where he will participate in the Asia-Pacific Economic Cooperation (APEC) summit in Lima and the G20 summit in Rio de Janeiro, Brazil. On Thursday, Xi made headlines by inaugurating the megaport of Chancay, a major Chinese investment under the Belt and Road Initiative. The port is a symbol of China’s growing influence in Latin America and has been framed against the backdrop of receding American presence in the region. Christian Shepherd and Lyric Li from The Washington Post described the scale and significance of the Chancay port:
“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,” Xi wrote in an editorial published in the El Peruano newspaper ahead of his arrival in Peru.
[…] Chinese and Peruvian officials have called the project a transformative opportunity for Peru to become a central hub for South American goods from its biggest trading partner. Boluarte has called it a potential “nerve center” joining the continent to Asia, one that could create 8,000 jobs and $4.5 billion in economic activity annually.
Chinese companies are involved in almost every aspect of the deepwater port project. The high-tech logistics hub will be exclusively operated by Chinese shipping giant Cosco, which in 2019 invested $1.3 billion to take a 60 percent stake in the project. Chinese state media has estimated the total cost of the finished project to be as much as $3.6 billion.
[…] Chancay will join an expanding global network of more than 40 ports under the Belt and Road Initiative, a $1 trillion plan to build transportation and technology infrastructure launched by Xi in 2013. [Source]
While this week’s fanfare presents a positive image of the port, it has been the source of numerous controversies over who actually benefits the most from the Chinese investment. Earlier this year, the Peruvian government revealed that the deal contained an “administrative error” that gave COSCO exclusive rights over the port’s operations. After attempting to overturn the decision to grant said exclusivity, the Peruvian government ultimately changed course and dropped its lawsuit days before Peruvian President Dina Boluarte traveled to Beijing in June to meet with Xi. At the local level, the project has also generated ongoing tensions with nearby residents. Isabel Debre and Franklin Briceño from the Associated Press described the discontent of local fishermen who are now left with smaller catches due to the construction of the port:
“Our fishing spots no longer exist here. They destroyed them,” said 78-year-old fisherman Julius Caesar — “like the emperor of Rome” — gesturing toward the dockside cranes. “I don’t blame the Chinese for trying to mine this place for all it’s worth. I blame our government for not protecting us.”
[…] The dredging of the port — which sucked sediment from the seabed to create a shipping channel 17 meters (56 feet) deep — has ruined fish breeding grounds, locals said.
“I’ve been out in the water all day and I’m always needing to venture farther,” said Rafael Ávila, a 28-year-old fisherman with sand in his hair, returning to shore empty-handed and exhausted.
“This used to be enough,” he said, pointing at his painted dinghy. “Now I need a larger, more expensive boat to reach the fish.”
[…] With some of the world’s largest container ships to berth at Chancay Port in January 2025, residents also fear the arrival of pollution and oil spills. In 2022, a botched tanker delivery at La Pampilla refinery nearby sent thousands of barrels of crude oil spilling into Peru’s famously biodiverse waters, killing countless fish and putting legions of fishermen out of work. [Source]
The port is also a flashpoint between two superpowers vying for influence. Xi described the port in the context of China and Peru’s “friendship and affection [that] is rooted in the wisdom of our ancient civilizations.” A Global Times editorial published this week added that the port “is by no means a tool for geopolitical competition.” But some observers in the U.S. have taken a more skeptical position. General Laura Richardson, head of the U.S. Southern Command, warned that the port could also be used by the Chinese navy for military and intelligence purposes. Xi and President Joe Biden may have a chance to discuss these underlying geopolitical tensions over the weekend in a meeting on the sidelines of the APEC summit. James T. Areddy, Ryan Dubé, and Roque Ruiz at The Wall Street Journal situated China’s economic growth in Latin America in relation to “U.S indifference” towards the region:
On top of deepening economic linkages, Xi promotes a governance model that breaks with the U.S.-led postwar order that he suggests is an outdated relic of colonialism. Xi’s sustained attention to the region “is symbolic, and countries of the Global South need that recognition,” said Alvaro Mendez, director of a unit at the London School of Economics and Political Science that studies China’s influence.
[…] Chinese trade and investment have boomed across the approximately 40 nations of Latin America and the Caribbean, home to more than 660 million people stretching from Mexico to Chile and Argentina, plus island nations such as Jamaica and Cuba.
China’s construction of infrastructure including ports to move commodities mirrors how, all over Asia and Africa, China under Xi has cemented its presence by building bridges, power plants and stadiums. China also has less of a debt-collector reputation in Latin America than it has in other developing parts of the world, in part because Beijing has slowed new project commitments and adjusted how it has financed some work.
[…] China hasn’t displaced the U.S. so much as it has taken advantage of uncontested opportunities, said Jorge Guajardo, a former Mexican ambassador to China now with the Washington advisory firm DGA Group. As he puts it, “The U.S. sees Latin America as ‘ours to ignore.’” [Source]
