China’s Growing Influence in Latin America
As China’s economy slows down, the country is shifting its focus to Latin America, seeking to strengthen economic ties and gain influence in the resource-rich region. Experts believe that China’s increasing presence in Latin America is a strategic move to export its way out of economic slowdown.
A New Megaport in Peru
Recently, Chinese President Xi Jinping inaugurated a $3.5 billion megaport in Peru, majority-owned by China state shipping company Cosco. This megaport, part of China’s Belt and Road initiative, will reduce shipping times from Peru to China by 23 days, cutting logistics costs by at least 20%. The port is expected to cement China’s growing position as a top trade partner of Peru and the rest of Latin America.
A Game Changer for Logistics
Experts describe the port of Chancay as a game changer in the logistics of Latin America. It will open the door for more Chinese investment into South America, as Beijing continues to crowd out the region’s traditional partners, the U.S. and Europe. The port will also serve countries like Brazil, a large buyer of Chinese products and one of its top exporters of agricultural goods and iron ore.
Reviving the Bioceanic Corridor
The new port has revived discussions on the potential construction of a “bioceanic corridor,” a railway link between Peru’s Pacific coast and Brazil’s Atlantic coast. This corridor could be used to export to Asia via Chancay, further solidifying China’s influence in the region.
Deepening Economic Ties
Peru and Brazil have seen their bilateral trade with China expand amid deepening economic ties. China is Peru’s largest trading partner, having signed onto its Belt and Road initiative along with at least 22 Latin American and Caribbean countries through different cooperation agreements. Brazil, although not a part of the BRI, has long been China’s largest trading partner and export destination.
China’s Long-Term Goal
Experts believe that China’s long-term goal is to supplant the U.S. in the region. As China expands its influence through trade and investment, it may lead to more strategic ties, cultural exchanges, defense, and security cooperation.
U.S. Concerns
The U.S. has expressed concern over China’s increasing role in Peru’s infrastructure and the Chancay Port, which some officials claim could be used by Beijing’s navy. However, experts argue that the U.S. should hold itself responsible for ceding ground, as it has practiced strategic neglect of its own shared neighborhood, allowing China to expand with little pushback or contestation.
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