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Peru's port Chancay gateway for South America's exports to China

Politics

The Chinese leader at the center of events in Lima and Rio de Janeiro

Vladimir Terehov, November 29, 2024

In terms of assessments of developments in the current stage of the ‘Great Global Game’, the leader of the second world power, Xi Jinping, was at the center of a number of events that happened in mid-November in Peru and Brazil.

Xi Jinping in Peru and Brazil

The opening of Peru’s Chancay Port in Peru as a symbol of China’s strengthening of its position in Latin America

The opening of the port of Chancay, located on Peru’s Pacific coast 80 kilometers north of from the capital Lima, was perhaps the main event in the Chinese leader’s tour to Peru and Brazil, and the most important sign of the further strengthening of China’s position in Latin America and its progress in the implementation of its global Belt and Road Initiative. This entire port complex is being built with the decisive (primarily financial) participation of the Chinese company COSCO Shipping, which has invested about USD 4 billion in the project.

Chancay will become the “hub and gateway” of a transportation route linking the new port with Shanghai

The official opening of the first phase of Chancay Port took place on November 15 this year. The ceremony was held via videoconference and was attended by Peruvian President Dina Boluarte and Chinese President Xi Jinping, who had previously held a bilateral meeting that culminated in the signing of a number of important documents on trade and economic relations.

During the ceremony, Dina Boluarte called the opening of the port of Chancay “a historic moment for Peru and all Peruvians”, as it begins the process of “transforming the country into a world-class logistics, technological and industrial center”.

And these are mere “ceremonial” declarations, as the port of Chancay is connected to the world’s longest highway, the Pan-American, and therefore, for transoceanic shipping purposes, the port will in effect serve a number of other countries on the continent. Bolivia, Ecuador, Venezuela, Chile and Argentina already have access to the port, and in the future they will be joined by Brazil, the largest economy in Latin America. This, however, will require the implementation of a trilateral project (involving China, Brazil and Peru) to build a railroad route 5,000 kilometers long and costing about $70 billion.

The Global Times predicts that Chancay will become the “hub and gateway” of a transportation route linking the new port with Shanghai. In turn, this route will become a crucial element of the entire Latin American branch of China’s global Belt and Road Initiative project. This will undoubtedly give a new impetus to the development of China’s trade and economic ties with the continent. Moreover, by the middle of the last decade, Beijing had already become the main trading partner of the leading Latin American countries.

As for the geopolitical aspects of the current situation, the fact that the US has been significantly involved in the Pan-American Highway project for more than a century gives it a certain piquancy. This is also why Washington “frowned” at the idea that now the fruits of a century of labor can be used by a country which is now its main geopolitical opponent. And already there are unconfirmed reports that US President-elect Donald Trump’s “transition team” is considering imposing a “60 percent tariff” on all participants in future transactions via the Chankay port.

President Xi Jinping visits Brazil

Be that as it may, after traveling to Peru, President Xi went on to visit Brazil, where he scored further political and economic points for his country in Latin America. Brazil, the leading country in South America, was this year’s host of the annual G20 Summit, which was held in Rio de Janeiro on November 18-19.

He we should point out that the most significant of the three components on the agenda of the G20 Summit was formulated as a “Global Alliance Against Hunger and Poverty”. And since these problems mainly affect the countries of the Global South, then, as in the BRICS Summit held earlier in Kazan, Russia, the main focus of the Chinese leader’s position, clearly expressed right from his arrival in Brazil, was the reaffirmation of his intention to provide various types of assistance to these countries.

It seems appropriate here to emphasize once again, that in the course of the unfolding struggle for positions in the countries of the Global South, success will go to those leading global players who can provide these countries with real assistance in solving various socio-economic problems. That said, the factor of relatively recent history, especially the unsightly colonial past of some of those players, will be largely irrelevant today. All the former colonial powers have already indicated their intention to compete for influence in the Global South, where the PRC is still clearly in the lead.

Following the G20 Summit, in which the Chinese leader was one of the main participants, he began a state visit to Brazil (held in the capital Brasília), his second in the last five years. The main results of the trip are expressed in nearly forty signed bilateral agreements on all aspects of cooperation between Latin America’s leading economy and one of the two leading global superpowers. Of these agreements, for the purposes of this article it is worth focusing on one that provides for the implementation of the South American Integration Routes Program, which has five main branches. It seems clear that one of the main purposes of this Program is to connect Brazil to the Chancay port complex.

Bilateral meetings on the margins of the APEC and G20 summits

Of the bilateral meetings held by the Chinese leader and his companion Wang Yi (who is, in effect, the second most-important person in China’s foreign policy hierarchy) on the margins of the above-mentioned international events in Lima and Rio de Janeiro, several stand out. The most significant of these were meetings with the Prime Minister of Japan, the Indian Minister of External Affairs (the Indian Prime Minister had recently met with the Chinese leader in Kazan on the margins of the BRICS Summit), representatives of the three leading European countries (Germany, France and the United Kingdom), and the outgoing President of the United States. In its relations with each of these countries, China has its own problems, which were discussed to varying degrees during these meetings.

Of the above meetings, the Chinese leader’s and Foreign Minister’s talks with the representatives of Japan and India, the other two leading Asian countries, deserve special attention. Their relations with China will increasingly influence the situation in the Indo-Pacific region. In this regard, the very fact that Xi Jinping met with new Japanese Prime Minister Shigeru Ishiba and Wang Yi met with Indian Foreign Minister Subrahmanyam Jaishankar is remarkable. The meetings clearly show that China’s relations with these countries are not in a “frozen and tense” state, but are dynamic, with certain positive elements. This in itself is good news for the situation in the Indo-Pacific Region.

Something similar can be said about the China’s relations with the European nations and with its main geopolitical opponent, the USA. While China’s relations with Europe and the US are largely negative, there are nevertheless positive “glimmers” here too. It seems that during his meeting in Lima with the Chinese leader Joe Biden was largely engaged in preparing the ground for “passing the baton” to the new US administration in one of the key areas of US foreign policy.

Finally, it is worth noting once again that the Chinese leader’s trip to Latin America on the occasion of the above international events was extremely productive in terms of strengthening China’s position on the continent, whose importance in the (notional) political configuration of the Global South is continuously growing.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region