China widens trade highway in South America with new mega port project

A new Chinese mega port in Peru aims to strengthen South America's trade ties with China, challenging US and European influence in the region.

In September, a group of Brazilian farmers and officials arrived in the Peruvian fishing town of Chancay. The draw: a new Chinese mega port rising on the Pacific coast, promising to turbo charge South America’s trade ties with China.

The $3.5 billion deep water port, set to start operations late this year, will provide China with a direct gateway to the resource-rich region. Over the last ten years, Beijing has unseated the U.S. as the largest trade partner for South America, devouring its soy, corn and copper.

The port, majority-owned by Chinese state-owned firm Cosco Shipping, will be the first controlled by China in South America. It will able to accommodate the largest cargo ships, which can head directly to Asia, cutting the journey time by two weeks for some exporters.

Beijing and Lima hope Chancay will become a regional hub, both for copper exports from the Andean nation as well as soy from western Brazil, which currently travels through the Panama Canal or skirts the Atlantic before steaming to China.

“The Chancay mega port aims to turn Peru into a strategic commercial and port hub between South America and Asia,” Peru’s Trade Minister Juan Mathews Salazar said.

Part of China’s decade-old ‘Belt and Road’ drive, the new port embodies the challenge facing the U.S. and Europe as they look to counter Beijing’s rising influence in Latin America. China’s trade muscle has helped it win allies and gain leverage in political forums, finance and technology.

Full construction started in 2018 at Chancay, some 80 kilometre north of Lima. Workers are now laying thousands of piles and breakwaters; work signs are written in white-on-red Chinese characters.