The Belt and Road Initiative’s Newest Trojan Horse
On November 14, a new deepwater megaport opened in Chancay, Peru, the largest of its kind on the western coast of South America which is expected to completely transform global trade to the benefit of China, who funded the project. The port, which cost $3.5 billion, is part of China’s Belt and Road Initiative (BRI), an infrastructure project which invests heavily in developing countries around the world.
The development of this project followed a very similar pattern to other Chinese port-construction projects: the investment didn’t come all at once. According to AidData, China has been active in Peru since as early as 2000, with over 140 loan and grant-financed development projects, particularly in the mining sector. Peru has incredibly vast mineral reserves, and this project is a further example of China tightening its grip on the global supply chain for crucial inputs in the production of more advanced technology.
While the Peruvians may view this as a win, due to a predicted uptick in agricultural exports, BRI projects tend to bear hefty costs. The long-term financial relationships established by China with the construction of seaports is a not-so-subtle attempt to gain geopolitical leverage over the countries that participate in BRI: the larger the investment, the larger the debt owed to China. The contracts often contain clauses that restrict restructuring, and China often reserves the right to demand repayment at any given time. This leaves poorer countries at the mercy of China, with their economies becoming increasingly dependent on Chinese investment and imports. It also means they have less of a choice in who to export resources to.
This might all seem unfortunate, but there’s a real possibility of it getting even worse. In pure economic terms, China dominates the global maritime scene. This relative advantage could translate to military power, with the construction of overseas naval bases to support China’s rapidly growing navy. In terms of philosophy, China has historically maintained non-interventionist policies, which is why of all military implementations, the naval base would be the best choice to avoid signaling aggression. Navies are the most diplomatic military instrument, so constructing bases in ally countries justified by the need to protect shipping routes is far less threatening than an army base constructed on land. Promoting the free flow of trade is also a cause that the US values, which could mean less pushback against the new bases. As China already invests heavily in foreign countries to construct seaports such as this one for economic applications, it is a fair assumption that already existing ports could serve as locations for future naval bases.
Chancay is not the first of these suspiciously militarily-capable megaports, and it is unlikely to be the last. While the port may be advertised as for commercial use only, other locations of Chinese deepwater ports have been flagged as potential locations for military application by possessing several characteristics also possessed by Chancay, such as the high amount of Chinese investment, the strategic value of the location, the strength of the relationship with the host country, and the physical characteristics of the port itself that make it dually applicable for economic and military use. If China sees the global South as up for grabs, what response can the U.S. offer? Economic bullying is one thing, but military implementations would signal a whole new level of aggression.