China is actively defending its $3.5 billion Chancay port development project located along the coast of Peru.
Cosco Shipping Ports is addressing a regulatory problem after Peru’s National Port Authority (APN) claimed that Cosco’s exclusive operating rights were mistakenly granted.
This challenge puts Cosco in a precarious position regarding their operations in the region.
Despite this, Cosco insists that altering its contract would undermine investor trust in Peru.
Having already invested $1.3 billion and completed 70% of construction, Cosco intends to protect its rights as sole operator.
The project, designed to serve as a strategic logistics hub connecting Peru to Asia, began construction in 2019.
The port will reduce shipping times to Asia by ten days, enhancing Peru’s competitiveness while drawing in global trade.
Cosco aims to resolve this dispute through negotiation without resorting to arbitration. However, Peruvian officials have not responded to its requests for discussions.
Thus, Cosco might invoke the bilateral trade agreement between China and Peru to defend its investment.
The Chancay port embodies Peru’s strategic aim to expand economic ties with Asia-Pacific nations and become a vital regional trade hub.
Nevertheless, the legal dispute raises concerns about China’s growing influence in Latin America, often termed “checkbook diplomacy.”
The U.S. has expressed caution regarding China’s expanding footprint in Peru’s economy, particularly in mining.
Chile, meanwhile, fears that the port will undermine its maritime competitiveness.
President Xi Jinping will attend the port’s 2024 inauguration, emphasizing the project’s significance for Peru-China relations.
Bilateral trade has already exceeded $34 billion annually.
Despite legal challenges, the Chancay port remains crucial to reshaping global trade routes and solidifying Peru’s logistical potential.