China Inaugurates Massive $1.3 Billion Deep-Water Port In Peru To Boost Trade

The president of China, Xi Jinping, inaugurated the Chancay port in Peru on November 14, 2024.

The massive $1.3 billion deep-water port, built as part of China’s Belt and Road Initiative, is a great accomplishment for the country.

The port, located about 80 kilometres north of Lima, will transform Peru into a central trade hub, generating $4.5 billion annually and creating 8,000 direct jobs.

The Chancay port will be an important connection between China and Latin America, reducing logistics costs for Peruvian goods shipped to China by 20%.

Xi and Peruvian President Dina Boluarte celebrated the launch of the port in a video link. Xi described the port as a crucial part of the 21st-century maritime Silk Road, a modern version of the ancient trade routes. He also discussed the possibility of establishing new connections between China and Latin America.

The deep-water port, with 15 berths, will accommodate some of the world’s largest ships, making it a crucial part of the global trade routes.

The port’s first phase, which will initially handle smaller ships, is expected to start operations this month.

The port will be operated by the Chinese shipping company COSCO, which invested $1.3 billion in taking the majority stake in the project.

The port is equipped with advanced technologies, including automated cargo cranes and electric driverless trucks made by Chinese companies.

Though the Chancay port is a great economic opportunity for Peru, its establishment has increased geopolitical tensions.

U.S. officials are concerned that the port could be used for military purposes, perhaps providing China with a foothold in the Americas.

General Laura Richardson, the former head of the U.S. Southern Command, warned that the Chinese Navy might use the port in the future.

However, Chinese officials have denied these concerns, saying that the port is solely a commercial venture.

Last year, China’s trade with Peru reached $36 billion, far exceeding Peru’s $21 billion trade with the United States.

China’s investment in Peru’s mining sector, especially copper, will likely benefit from the new port. Peru is the second largest producer of copper in the world, which is used to make electronics and clean-energy technologies.

China also plans to integrate the Chancay port into regional trade networks. A proposed railway line connecting the port to Brazil, China’s largest trading partner in Latin America, is expected to boost the flow of goods, including Brazil’s key exports like soybeans and iron ore.

The project is estimated to cost $3.5 billion.

Despite some controversy over the terms of the port deal in Peru, the Chancay port is China’s growing clout in Latin America, with over 40 ports around the world that are already part of its Belt and Road Initiative.

Additionally, Xi and Boluarte will sign an expanded free trade agreement, which will further strengthen the economic ties between the two nations.

References: Reuters, Washington Post

Source: Maritime Shipping News