China's expanding trade influence sparks U.S. concern in Peru
According to Reuters, the administration of future U.S. president Donald Trump will assume power in a country currently losing a trade competition with China in South America's resource-rich areas. This is in the context of the Asia-Pacific Economic Cooperation (APEC) summit in Peru.
Peru is the second-largest exporter of copper worldwide, and the rise of Chinese influence in this country reflects a broader regional trend, once considered the "backyard" of the United States. China's economic presence is expanding rapidly, driven by its demand for corn, copper, soybeans, beef, and lithium, which is used in batteries.
"China entered this region aggressively"
Riding this wave of growth, China has surpassed the U.S. as the largest trading partner in several South American countries like Brazil, Chile, and Argentina, thereby weakening Washington's political influence in the region. This trend has continued under the terms of both Trump and 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, according to 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.
At the APEC summit in Lima, Peru, both China's President Xi Jinping and President Joe Biden are expected to attend. According to Xi's announcements, he will participate on Thursday – via video link – in the symbolic "virtual opening" of the Chinese-financed, expansive Chancay port north of Lima, together with Peru's President Dina Boluarte.
"China's new gateway to Latin America"
Some media outlets refer to the deep-water port as "China's new gateway to Latin America." However, the Chinese state-owned company Cosco Shipping will remain in control of the port, which has caused concern in the United States. The project cost is estimated at approximately CAD 4.9 billion.
Elmer Schialer, the Foreign Minister in Lima, believes that the Chancay port "will launch Peru to another level of tradee." Transport Minister Raul Peraz Reyes explained that it will shorten the maritime route to Chinese ports by up to 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 are pinned on the Chancay port not only by Peruvian entrepreneurs. The Brazilian ambassador in Lima, Clemente Baena Soares, noted that the new port will halve the transportation time of Brazilian soybeans to Asia.
In addition to the port inauguration, several economic agreements, including a new, enhanced free trade agreement, are expected to be signed during Xi's visit to Peru. The head of Peruvian diplomacy expressed optimism that the visit will boost bilateral trade value – which amounted to nearly CAD 50 billion last year – by at least 50%.
The corporate manager of Cosco Shipping, Mario de las Casas, asserted that Peru's orientation towards China is not a political move, and the country remains open to investments from any party. - 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 stated.
