China's Xi arrives in Lima to attend APEC and open megaport in the Pacific By Reuters

By Eduardo Baptista, Marco Aquino and Lucinda Elliott

LIMA (Reuters) – Chinese President Xi Jinping arrived in Lima on Thursday, kicking off a week-long diplomatic campaign in Latin America with the inauguration of the massive Chancay deepwater port, one of the most ambitious infrastructure investments of Beijing in Latin America.

Xi will attend the Asia-Pacific Economic Cooperation (APEC) summit in Lima before heading to the Group of 20 summit in Rio de Janeiro next week. Xi will also pay state visits to Peru and Brazil, both important sources of metal ores, soybeans and other commodities that support key Chinese industries such as electric vehicles and pork, as well as ensuring food security for the country's population. 1.4 billion people.

Xi's first task in Lima is to lead a ceremony to inaugurate the port of Chancay, together with Peruvian President Dina Boluarte.

“Chancay… will revolutionize trade and energize the Asia-Pacific economy,” Boluarte said in a speech Thursday at the APEC CEO Summit.

The Chinese-controlled megaport, built by Cosco Shipping Ports and located on the Peruvian Pacific coast north of Lima, has already attracted $1.3 billion in Chinese investment for its first phase, with billions more expected as Beijing and Lima seek to convert Chancay into an important maritime port. axis between Asia and South America.

“We need to jointly build and manage the Chancay port well, make 'from Chancay to Shanghai' truly become a prosperous path to promote the joint development of China-Peru and China-Latin America,” Xi wrote in an opinion piece. published on Thursday in the official newspaper El Peruano.

Mario Ocharan, Peruvian director of the Chancay Chamber of Commerce, told Reuters that the first ship was due to sail the week of November 18, transporting Peruvian fruit to China.

According to Ocharan, the real goal of the megaport was access to neighboring Brazil, where a new rail line will connect the port to Brazilian supplies.

“The Koreans and the Chinese have expressed interest in building the railway,” he said.

Mario de las Casas, corporate affairs manager at Cosco Shipping Chancay Peru, told Reuters that there are still “many connectivity works to be done” and that the entire project would require an investment of $3.5 billion.

“It is expected that in approximately four years we can begin to develop the second phase of the project… We are starting now with a movement of one million (containers per year), and with three cranes we could increase to 1.5 million, and by maintaining that volume would take about four years to start the second phase,” he stated.

De las Casas added that he considered a railway project that would connect Chancay with Brazil and its large market “crucial.”

“We have to focus on how to get to Brazil for mass transportation of soybeans. They are the main suppliers of soybeans to China,” he said.

GEOPOLITICAL AND ECONOMIC HEADWINDS

The opening of the port comes as Beijing seeks to further tap the resource-rich Latin American region, amid trade tensions with Europe and concerns about future tariffs by the incoming Trump administration.

Xi is accompanied by a delegation of more than 100 Chinese business executives, including heads of companies with the largest investments in Peru, including Cosco Shipping and mining firm Chinalco, which owns the Toromocho mine.

Robert Evan Ellis, a Latin American research professor at the U.S. Army War College, said that Chancay being a deep-water port with fifteen berths will allow more direct routes between both sides of the Pacific, significantly reducing costs and shipping times.

“In the great war between global shipping alliances, this really positions Cosco… Chancay illustrates how China seeks secure access to resources and markets and its increasingly successful fight to corner global value added,” he said.

In Xi's opinion piece in El Peruano, he noted that the Chancay port project would generate $4.5 billion in annual revenue, directly create more than 8,000 jobs, and reduce the logistics costs of the Peru-China route by 20%. .

Chancay, China's largest investment in a Latin American port, has set off alarm bells in Washington. Gen. Laura Richardson, former head of the U.S. Southern Command, warned earlier this month before retiring that Chancay could be used by the Chinese military and for intelligence gathering.

The United States' anxiety over Chancay reflects a broader, decades-long shift in a region known as Washington's backyard, in which China has overtaken the United States to become the largest trading partner of countries like Peru.

China's state-backed Global Times wrote in an editorial published Monday that the port was a “bridge for practical cooperation between China and Latin America and is in no way a tool for geopolitical competition,” calling the accusations of the United States about the potential military use of the port “stains”.

Evan Ellis said the fact that Cosco has exclusive use of the port means there is a realistic chance it could be used for military purposes in a war.

“This is the Cosco working hand in hand with the PLA during non-combatant evacuation operations in Yemen and Libya, and in several other locations around the world, so there is no doubt about the expected and established cooperation with the Navy of the EPL”.