China's expanding grip on South American trade routes
Reuters assessed that the administration of future U.S. President Donald Trump is set to take power in a country that is losing a trade battle with China in the resource-rich area of South America, in the context of the Asia-Pacific Economic Cooperation (APEC) summit in Peru.
Peru is the second-largest copper exporter in the world, and the rise of Chinese influence in this country reflects a broader trend in the entire region, once considered the United States' "backyard." China's economic presence is growing rapidly, fueled by the demand for corn, copper, soybeans, beef, and lithium used in batteries.
"China entered this region aggressively"
On the wave of this growth, China has surpassed the U.S. on the list of the largest trading partners of South American countries like Brazil, Chile, and Argentina, weakening Washington's political influence in the region. This trend deepened during Trump's first term and under President Joe Biden.
The strategic value is that this is the United States’ backyard. China can't start by building military bases there because it's too sensitive and will make China's conflict with the United States too pronounced... So it has made inroads with economic ties first, assessed Li Xing from the Chinese Institute of International Strategy in Guangdong province.
China has entered the region aggressively, is learning quickly, and is prepared to remain for the long term, said former U.S. State Department official Eric Farnsworth. He believes that if South America does not become a priority for the U.S., the region will increasingly tilt towards China.
Both China's President Xi Jinping and President Joe Biden are expected at the APEC summit in Peru's capital. According to Xi's announcements, he will participate on Thursday—via video link—in the symbolic "virtual opening" of the Chinese-financed gigantic Chancay port north of Lima, together with Peru's President Dina Boluarte.
"China's new gateway to Latin America"
The deep-water port, described by some media as "China's new gateway to Latin America," is mostly owned by the Chinese state-owned company Cosco Shipping and will remain under its control, raising concerns in the United States. The project's cost is estimated at $3.5 billion.
Elmer Schialer, the Foreign Minister in Lima, assessed that the Chancay port "will launch Peru to another level of trade." Transport Minister Raul Perez Reyes explained that it will shorten the maritime route to ports in China by 10, 15, or even 20 days and will compete with ports in Manzanillo, Mexico, and Long Beach, California. "Our aim is to become the Singapore of Latin America," he said.
Hopes related to the Chancay port are held not only by entrepreneurs in Peru. The Brazilian ambassador in Lima, Clemente Baena Soares, explained that the new port will halve the transport time of Brazilian soybeans to Asia.
During Xi's visit to Peru, several economic agreements, including a new, enhanced free trade agreement, are expected to be signed, in addition to the port's inauguration. The head of Peruvian diplomacy expressed hope that the visit will contribute to the growth of bilateral trade value—which amounted to nearly $36 billion last year—by at least 50%.
The corporate manager of Cosco Shipping, Mario de las Casas, stated that Peru's turn towards China is not political, and the country remains open to investments from any side. "Let the United States come to invest, it has not done so for many years. Here there are no good or bad guys, here there are only interests," he said.
