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Port project in Peru key factor to connect South America to Asia

Peru port project

In Peru, a massive project led by China is taking shape along the country’s Pacific coast. Dozens of cranes are hard at work lifting enormous blocks, each weighing several tons, and dropping them to compact the soil. This ambitious endeavor covers an area of about one square mile and aims to create a major port, boosting trade connections between China and Latin America.

The location of this port, named Chancay, is situated 37 miles (60 kilometers) to the north of Lima, the capital of Peru. According to Mario de las Casas, who manages institutional affairs at COSCO Shipping, a Chinese state-owned company that holds the majority ownership of the project, Chancay is poised to become “the gateway from South America to Asia.”

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This venture, which costs around $1.3 billion, has a key benefit – it will provide a direct route to China, reducing travel time for ships by a significant 10 days. Normally, ships journeying from South America to China take more than 45 days, often making stops in Central America, Mexico, or the United States. Chancay’s deep-water port will also be capable of accommodating large container ships that can’t dock at other ports in South America.

De las Casas explains that this port is part of China’s Belt and Road Initiative, an expansive global infrastructure and trade development project. He notes that China has been investing heavily in infrastructure and logistics worldwide, with ports in various countries, including Greece, Spain, and Africa.

Isaac B. Kardon, a senior fellow at the Carnegie Endowment for International Peace who specializes in China’s maritime activities, estimated that by July 2020, there were at least 95 ports globally either fully or partially operated with Chinese capital. Kardon views the Chancay port as a significant move for COSCO, which is China’s largest state-owned shipping company and a major player in the global shipping industry.

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Kardon underscores that this long-term project aligns with China’s overarching strategy to expand its maritime trade and logistics influence to key points across the world. However, this global port expansion by Chinese companies is causing concerns among U.S. officials.

De las Casas acknowledges these concerns, highlighting that COSCO operates in 37 ports worldwide, including Los Angeles, California. In the case of the Chancay port, COSCO Shipping owns a 60% stake, while Peru’s Volcan holds the remaining 40%.

The first phase of this project is scheduled for completion by the end of 2024. Containers will move to and from the port through a 1.8-kilometer tunnel. Unfortunately, tunnel construction experienced a setback in May due to a surface collapse. The company confirms that work in the tunnel area will resume in the coming days.

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