China’s President Xi Jinping will inaugurate its first mega port in Latin America next week, giving China a foothold in America’s backyard. Brazil, a founding member of BRICS, has so far refused to join China’s Border and Road Initiative but has been keen to connect to the Chinese-funded port in Peru.

Chancay Port in Peru has been constructed at an estimated cost of US$ 3.5 billion under Beijing’s flagship BRI project and has the potential to shape trade in South America. Also, it will develop as a crucial connection point between South America and the Indo-Pacific.

President Jinping will formally inaugurate the port on November 14 during his visit to Peru for the Asia-Pacific Economic Cooperation (APEC) meeting. Due to security concerns, President Jinping will open the port remotely using a video link from the Chinese Embassy in Lima.

China has been projecting the port as a win for Beijing even as its BRI faced a setback in South America, where Brazil refused to join it. Over the past decade, China and Latin America have become partners under the BRI. So far, 22 countries in the region have signed BRI cooperation documents with China. Brazil has stayed away from BRI but has not shied away from enjoying its fruits.

The inauguration also comes when Ecuador’s Coca Codo Sinclair dam, built under the BRI Project by Chinese contractors, has faced structural problems since its launch in 2018. This has taken off the sheen from the Chinese-led infrastructure initiatives in the area.

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The Chancay port, located 50 miles north of Peru’s capital, Lima, is nearly complete and has four operational berths. The Chinese shipping giant COSCO will be the port’s sole operator.

COSCO intends to develop Chancay as a key logistics hub for trans-Pacific trade. Initially, COSCO will operate two 14,000 TEU (Twenty-foot Equivalent Units) container ships weekly, connecting the port to Shanghai. Later the terminal will be expanded to accommodate larger vessels carrying up to 24,000 TEU.

The size of the port is far greater than the current trade volume between China and Peru, indicating that other countries will be connected to the port. Small vessels transporting containers to neighboring South American countries like Chile, Colombia, and Ecuador will also throng the port. Plans are afoot to use the terminal to supply regions of Brazil that are too far inland for Atlantic coast ports to reach properly.

Brazil does not have direct access to the Pacific Ocean, which justifies its interest in the Chancay port. The Brazilian Ministry of Planning has launched an initiative called the South American Integration Routes Project. The project links Brazil with other major South American trade and development hubs. Two of these routes will be linked to Peru, and Chancay port will play an important role in the connectivity.

Earlier, Brazil exported more to Argentina, the US, and Europe, but now China has emerged as its main partner. As it gets closer to the Pacific (through the port of Chancay), it also gets closer to Asia and China in particular. Brazil aims to export Lithium to China for its electric car chain. The mineral is also critical for batteries. Brazil also has rich deposits of cobalt and nickel, minerals vital for electric battery production.

China In America’s Backyard

China was a late entrant in Latin America. However, it has now emerged as the region’s major economic partner. Bilateral trade between the two stands today at more than USD 200 billion. China is also Peru’s largest trading partner.

Chancay port is 4,500 miles from San Francisco, but geopolitically, it is on America’s “20-yard line.” The US’s main concern is that Beijing would use the port for military purposes, giving it a deep-water port close to the US but far enough to survive in the event of any hostilities. Using the port as a naval facility is not inconceivable. The same has been seen in Sri Lanka with the Chinese-built Hambantota port.

The US Southern Command thinks that the deep-water port is suitable for Chinese military ships to dock here and can also be used by its survey vessels for intelligence gathering. After all, China operates one of the biggest fleets of survey vessels in the world, constantly mapping the depth of the oceans.

US Army General Laura Richardson, the top officer at Southern Command, testified before the House Armed Services Committee that the Chinese activities are a “relentless march” to replace the United States as a leader in the region.

Chinese actions, like financing the port in Peru, establishing a space monitoring station near the Straits of Magellan in Argentina, and buying lithium mining operations in three South American nations, pose increasing risks to US security.

The Chinese Space Agency station in Argentina used to explore the dark side of the moon and track satellites that could also be used for targeting. This is one of China’s 11 satellite tracking stations across South America. These facilities, ostensibly used for space research and satellite tracking, could also track or interfere with US and other partner satellites. Some researchers have even argued that these sites could help the PLA guide hypersonic missiles, potentially boosting the PRC’s capability to strike the US.

Many countries in the region already use Chinese firms like Huawei in their 3G-4G networks. A Brazilian firm recently signed a memorandum of understanding with Huawei to build a prototype 5G network in a city there.

This is even though the US has cautioned other nations for several years about the security risks associated with relying on Huawei for advanced telecommunications because of its ties to the Chinese government.

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