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Semafor Signals

What a Chinese port in Perú means for Washington

Insights from The Wall Street Journal, Reuters, Foreign Policy, and Bloomberg

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Jun 14, 2024, 8:16am EDT
South America
COSCO Belgium in Hamburg.
Wolfgang Fricke/Wikimedia Commons
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The News

A $1.3 billion Chinese-constructed port in Perú is being watched closely by Washington as it monitors Beijing’s growing influence in South America.

The Chancay port, scheduled for launch later this year, will open a direct route between Perú and Shanghai and receive some of the world’s largest ships.

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SIGNALS

Semafor Signals: Global insights on today's biggest stories.

Megaport challenges US dominance in Latin America

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Source:  
The Wall Street Journal

The deepwater port will give Beijing unparalleled access to South America’s rich resources — raising concerns in Washington that it could lose its influence in the region, The Wall Street Journal reported. Beijing is so invested in the port that Chinese leader Xi Jinping is expected to attend its inauguration. That has rattled analysts who have closely watched China’s growing sway in the Global South: “It really platforms China in a major new way in South America as the gateway to global markets. It is not just a commercial issue at that point, it is a strategic issue,” Eric Farnsworth, a former high-ranking State Department diplomat, told the Journal.

Port control spat raises questions about Beijing’s involvement

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Sources:  
Reuters, Foreign Policy

The agreement signed between China’s COSCO Shipping Ports and the Peruvian government has given the firm total control over its operations, due to an “administrative error” in the paperwork included by negotiators. COSCO threatened last month to pull out of the deal if it doesn’t retain full control over the port, Foreign Policy noted. The issue “raises the question of how many other governments have enthusiastically negotiated agreements with Chinese infrastructure investors without understanding all the fine print,” FP columnist Elisabeth Braw wrote.

Second port could work as ‘counterweight’

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Source:  
Bloomberg

Concerns over the port have prompted Perú to try to woo back the US. Lima is pitching a second port to US investors in hopes of offering Washington a “counterbalance” to Beijing in the country, Bloomberg reported this week. The Peruvian ambassador to the US told the outlet that “one hundred percent of Lima’s electricity is owned by China, many of the copper mining projects are owned by China,” adding, “the United States has noticed this. But it’s not enough to notice it, action is needed.”

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