by Lloyd's List
15 November 2024 (Lloyd's List) - CHINA’S president Xi Jinping and his Peruvian counterpart Dina Boluarte on Thursday inaugurated the mega port project in Chancay via video link, launching the first logistics hub operated by a Chinese company in Latin America.
During the launching ceremony in Lima, Xi said that the deepwater port serves as the starting point for the new land-sea corridor linking China and Latin America, and also marks a significant step for China’s Belt and Road Initiative.
Boluarte stated that with the new port, Peru would embark on a transformation towards becoming “a world-class technological and industrial centre,” strategically propelling the country’s link with the Asia-Pacific region.
The Chancay Terminal, featuring a maximum depth of 17.8 metres, was constructed by Cosco Shipping Ports with a $1.3bn investment for its initial phase, and the total investment is expected to reach nearly $36bn. The construction started in 2021.
It can accommodate large container ships of up to 18,000 teu, with a designed long-term annual throughput capacity of 1.5m teu.
When completed, the Chancay Terminal will help establish a direct passage between the west coast of South America and China, providing an important alternative for bilateral trade in minerals, agricultural goods, and industrial products that bypasses the Panama Canal.
The first phase of the port project shortens the shipping time from Peru to China to 23 days, saving more than 20% in logistics costs, bringing in $4.5bn in revenue for Peru each year, and creating over 8,000 jobs, Xi said in a signed article published Thursday in Peruvian media outlet El Peruano, titled ‘China-Peru friendship: setting sail toward an even brighter future’.
He arrived in Lima on Thursday for a week-long diplomatic tour, attending the 31st APEC Economic Leaders’ Meeting and visiting Peru. Then he will visit Brazil and participate in the G20 summit in Rio de Janeiro.
The Chancay project has not been without its controversy, especially amid growing caution over China’s use of ports and infrastructure diplomacy to expand its influence overseas.
The Peruvian government eventually backed down from an exclusivity dispute with Cosco after the National Port Authority declared it lacked the legal authority to grant such exclusivity and requested its annulment.
The US also seems concerned over China’s control of port facilities in Latin America, which has been long viewed by Washington as its “backyard”.
General Laura Richardson, former US Southern Command chief, previously cautioned that Chancay could potentially be utilised by the Chinese navy for intelligence-gathering purposes.
Beijing and Lima issued a joint statement on Thursday to enhance their comprehensive strategic partnership, signalling plans to sign an updated free trade agreement.
China is currently Peru’s largest trading partner.
