China’s New Port in Peru Shakes Up South America and Sends a Warning to the U.S

On November 14th, Chinese President Xi Jinping inaugurated the new Chancay port in Peru.

Worth 1.3 billion US dollars, the investment project is part of China’s infamous Belt and Road Initiative (BRI). Often called the new Silk Road, the BRI claims to increase infrastructure interconnectedness across all continents through land and maritime projects. 

Located centrally on the coast of Peru, Chancay was chosen for China’s BRI initiative in 2019 during an agreement between a Chinese shipping port company COSCO, and Volcan Compañia Minera S.A.A, a public mining company. 

The Chancay port, owned majorly by China, is one of China’s largest initiatives in South America and is projected to become the new hub for South American and Chinese trade.

In the last decade, China has begun to focus on critical mineral extraction opportunities in South America. The 15-berth port will allow China to export critical minerals, like Peruvian copper for electric vehicles, faster while avoiding U.S. and Mexican ports that typically have increased. 

American national security officials are worried because of China's increasing economic power in South America. Before China took large initiatives to increase its presence in South America, the United States held the strongest relationship with the continent. As the United States threatens tariffs, and rhetoric around action against illegal immigrants increases, the relationship between the two countries is far more distant.

Outside of stronger trade and economic connections between South America and China through the Chancay port, China will also be positioned to have a strategic military position at the port if it needs to or chooses to do so. 

The port's geographical location has also caused warning bells to go off for American national security officials. Since China’s greater shareholder investment influences leadership and decision-making, the possibility of the Chancay port serving as a navy base and hub for intelligence services is a real threat to the United States. Furthermore, if war started between the US and China, the Chancay port could send and receive military cargo while holding submarines and warships.

The Chancay port is a big win for China and its interaction with South America. With increased Chinese interaction, positive perception and reliance on the United States decreases. As China strengthens its ties with South America through projects like the Chancay port, the U.S. risks losing its longstanding influence in the region, prompting a shift in the balance of power.