Peru's Chancay: China's megaport of entry to South America

Peru's new Chancay port, funded by China, is a key symbol of Beijing’s expanding influence in South America. Scheduled to be inaugurated by President Xi Jinping on Thursday, the $3.5 billion deep-water port is expected to become a major trade hub between South America and China. Located about 50 miles north of Lima, Chancay has a depth of 17.8 meters (58.4 feet), allowing it to accommodate the largest container ships, surpassing Lima’s Callao port by two meters.

Gonzalo Rios, deputy general manager of the Peruvian arm of Chinese port operator Cosco Shipping, which holds a 60% stake in the facility, said the port is nearly ready and could transform the region into South America’s logistical hub. The port will be unveiled by Xi and Peruvian President Dina Boluarte during the Asia-Pacific Economic Cooperation (APEC) summit in Lima.

Chancay is part of China’s Belt and Road Initiative (BRI), a global infrastructure project launched in 2013 to improve trade links between China and other continents. Initially focusing on Europe, Africa, and Asia, the BRI has expanded to include South America. The port will handle a wide range of imports, including Asian electronics and textiles, as well as exports of key minerals such as lithium and copper from Peru and Chile.

With a 30-year concession granted to Cosco Shipping Ports, Chancay aims to process up to one million containers in its first year. Peru, which has seen rapid economic growth, is China’s fourth-largest Latin American trading partner, with bilateral trade reaching nearly $36 billion in 2023.

Peruvian Transport Minister Raul Perez envisions Chancay as a key link to Asia, offering direct routes that could reduce shipping times by up to 20 days compared to the current 35-40 days. In addition to Peru, the Port will serve neighboring countries like Chile, Colombia,, and Ecuador, allowing them to bypass ports in Mexico and the United States for trade with Asia.

Experts see Chancay as part of a broader geopolitical competition in South America, with China seeking to cement its position against the United States. The port, connected to the Pan-American Highway via a mile-long tunnel, will also employ artificial intelligence to scan containers for illegal goods, including drugs, with Peru being a major cocaine producer. “We will use the most advanced technology to ensure container security,” said Perez.