Wednesday, June 19, 2024

"Peru: Chinese Megaport Is Rattling the U.S."

From the Wall Street Journal via MSN, July 13:

CHANCAY, Peru—In this serene town on South America’s Pacific coast, China is building a megaport that could challenge U.S. influence in a resource-rich region that Washington has long considered its backyard.

The Chancay deep-water port, rising here among pelicans and fishermen in small wooden boats, is important enough to Beijing that Chinese leader Xi Jinping is expected to inaugurate it at the end of the year in his first trip to the continent since the pandemic.

Majority-owned by the giant China Ocean Shipping group, known as Cosco, Chancay promises to speed trade between Asia and South America, eventually benefiting customers as far away as Brazil with shorter sailing times across the Pacific for everything from blueberries to copper.

As nations around the world shudder at a new flood of cheap Chinese manufactured goods, the port could open new markets for its electric vehicles and other exports. China is already the top trade partner for most of South America.

The U.S. worries that China’s control over what could become South America’s first true global commercial hub will allow Beijing to further strengthen its grip over the region’s resources, deepen its influence among America’s closest neighbors and eventually plant its military nearby.

“This will further make it easier for the Chinese to extract all of these resources from the region, so that should be concerning,” Army Gen. Laura Richardson, who heads the U.S. Southern Command, said last month at a Florida International University security conference.

Former American officials say the project highlights a diplomatic void that the U.S. has left in Latin America as it has concentrated resources elsewhere, most recently in Ukraine and the Middle East.

“This changes the game,” said Eric Farnsworth, a former high-ranking State Department diplomat who now leads the Washington office of the Council of the Americas think tank. “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.”

Located 50 miles north of Peru’s capital, Lima, the $3.5 billion port—funded by Chinese bank loans—will be the first on South America’s Pacific coast able to receive megaships because of its nearly 60 feet of depth, though other ports in the region have large container-handling capacity. That will allow companies to send cargo on those vessels directly between Peru and China rather than on smaller ships that must go first to Mexico or California.

Cosco says Chancay is purely intended to boost commerce.

“This is a commercial project to promote development,” said Gonzalo Rios, Cosco’s deputy general manager in Peru. “There is nothing to hide here.”

Soon after the port was agreed to in 2019, Chinese state media gushed with predictions of Peru’s future as a hub in Chinese-South American trade and suggestions it could help Beijing with other priorities, such as a submarine cable link.

“Peru could be the anchor for such a corridor not only because of its geographical location, but also because of its relations with China,” said an English-language commentary published in China Daily.

Peru has brushed aside U.S. concerns. Congress in Peru, a country of 33 million that is far from any potential global conflicts, has to approve the arrival of foreign military, not a port operator.

Peru’s Foreign Minister Javier Gonz├ílez-Olaechea said that if the U.S. is concerned about China’s growing presence in Peru, then it should step up its own investments, adding that “everyone is welcome” to invest.

“The United States is present almost everywhere in the world with a lot of initiatives, but not so much in Latin America,” Gonz├ílez-Olaechea said in an interview. “It’s like a very important friend who spends little time with us.”....

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