- Xi Jinping Set to Inaugurate China’s First Mega Port in Latin America
Next week, Chinese President Xi Jinping will remotely inaugurate China’s first mega port in Latin America: the Chancay Port in Peru. The port, developed at an estimated cost of $3.5 billion, lies 50 miles north of Lima and serves as a significant element in China’s Belt and Road Initiative (BRI). Although Brazil, a founding member of the BRICS alliance, has yet to formally join the BRI, it remains keen on leveraging the port to enhance its economic connections to the Pacific.
The Chancay Port will function as a major trans-Pacific logistics hub, bolstering trade between South America and the Indo-Pacific. Initially operated by China’s shipping giant, COSCO, the port will facilitate connections between China and Peru and the wider Latin American region.
The port’s inauguration coincides with Xi Jinping’s visit to Peru for the Asia-Pacific Economic Cooperation (APEC) meeting, where he will inaugurate the port via video from the Chinese Embassy in Lima due to heightened security concerns. Chancay Port’s completion strengthens China’s already prominent economic presence in Latin America, though it has faced challenges, particularly from Brazil’s hesitancy toward full-scale BRI participation.
Chancay Port is expected to transform South American trade dynamics, providing an essential gateway to the Pacific. Initially, COSCO plans to operate two 14,000 TEU (Twenty-foot Equivalent Units) container ships weekly, linking Chancay to Shanghai. Over time, the terminal will be expanded to accommodate larger vessels with up to 24,000 TEU capacity, indicating China’s intent to develop it into a regional maritime hub that exceeds current Peruvian trade demands.
Chancay’s scale suggests that it will not serve only Chinese-Peruvian trade but will also facilitate regional trade with countries like Chile, Colombia, and Ecuador. Additionally, Brazil, though on the Atlantic side, is exploring how the port could enhance its connectivity to Asia, specifically for exporting critical minerals such as lithium, cobalt, and nickel used in electric vehicle batteries.
Brazil has primarily exported to Argentina, the United States, and Europe. Yet, as China emerges as Brazil’s leading trade partner, Chancay offers Brazil increased access to Asia, bypassing the challenges of transporting goods across the Atlantic.
Brazil’s interest in Chancay reflects its broader efforts to integrate more deeply into South American infrastructure, reducing dependency on its Atlantic-facing ports and expanding its economic outreach. To facilitate this shift, the Brazilian Ministry of Planning launched the South American Integration Routes Project, which seeks to develop critical trade pathways connecting Brazil to neighboring countries. Two of these routes will link Brazil with Peru, positioning Chancay as an essential gateway to the Pacific and Asia beyond.
While Brazil has refrained from formally joining China’s BRI, its willingness to utilize the Chinese-funded Chancay Port highlights the economic appeal of Chinese investment in the region. Brazil’s substantial reserves of lithium, cobalt, and nickel make it a key supplier of raw materials for Chinese electric vehicle manufacturers, and improved access to Asia via Chancay port would further enhance this relationship.
China’s growing economic influence in Latin America has raised concerns within the United States, especially with projects like the Chancay Port and the Chinese-financed Coca Codo Sinclair dam in Ecuador, which has faced structural issues since its 2018 completion. Despite setbacks, China’s total trade with Latin America now exceeds $200 billion, with China as Peru’s largest trading partner.
Located approximately 4,500 miles from San Francisco, Chancay lies at a critical geopolitical juncture, symbolizing what some analysts call a “20-yard line” on America’s strategic field. Given the port’s deep-water capabilities, US military officials fear it could be adapted for Chinese naval use, reminiscent of China’s Hambantota port in Sri Lanka, which sparked similar concerns about potential dual civilian-military utility.
US Army General Laura Richardson, head of the Southern Command, recently described China’s activities in Latin America as a “relentless march” to displace the United States’ regional influence. China’s infrastructure projects and investments in sectors like telecommunications, energy, and space monitoring are contributing to a shift in regional power dynamics.
The possibility of dual-use applications is of particular concern for US defense strategists. The deep-water capabilities of Chancay Port could theoretically support Chinese naval ships or survey vessels, facilitating military presence in the region. While ostensibly commercial, China’s investments in facilities such as its satellite-tracking station in Argentina have sparked fears about surveillance and intelligence gathering aimed at the US and its allies.
China’s Chancay investment is only one part of a broader effort to extend its presence in Latin America through infrastructure and technology projects. The Chinese Space Agency’s tracking station in Argentina, used for lunar exploration, is one of 11 such facilities across South America. These stations, while ostensibly focused on scientific research, could also assist in missile guidance systems, potentially enhancing China’s ability to strike US targets if hostilities were ever to arise.
China’s presence in Latin America is further evident in its acquisition of lithium mining operations in several South American nations, aligning with its strategic objective to secure resources for its growing electric vehicle industry. Lithium, cobalt, and nickel are integral to electric car batteries, positioning South America as a critical supplier of these high-demand minerals to China.
Chinese telecommunications firms like Huawei are also playing a role in this regional transformation. Huawei is well-established in Latin America, with its technology supporting 3G and 4G networks across several countries. Despite US warnings about the security risks of Huawei’s 5G networks, a Brazilian company recently signed a memorandum with Huawei to create a 5G prototype network.
The US has cautioned Latin American nations for years about the security implications of adopting Huawei’s infrastructure. Washington fears that Huawei’s close ties with the Chinese government could lead to potential espionage or disruptions in communications infrastructure. Nevertheless, Latin American countries, eager to improve their digital connectivity, often view Chinese telecommunications as an affordable solution, despite the associated security concerns.
As Chancay Port readies for operation, the US is wary of what this means for its strategic interests in Latin America. China’s ability to project economic and potentially military influence into what was once considered America’s backyard has shifted the regional balance of power. With other South American nations considering BRI participation, China’s role in regional trade and infrastructure is expected to expand.
Brazil’s interest in connecting with Chancay Port exemplifies a pragmatic approach in the region: benefiting from Chinese investments without fully committing to the BRI framework. However, as the US faces increased competition from China in its traditional sphere of influence, regional governments must carefully navigate this complex geopolitical landscape.
Peruvian officials have publicly maintained that the port will remain a commercial facility, but its sheer size and strategic location have inevitably raised suspicions. Observers believe that whether or not the port serves Chinese military ships, its presence alone strengthens China’s regional foothold.
