China has solidified its position as one of Peru’s most significant foreign investors, with investments totaling $27.9 billion by the end of 2023.
A recent report by the Center for China and Asia-Pacific Studies (Cechap) at Peru’s Universidad del Pacífico highlights the growing presence of Chinese enterprises across key sectors of the Peruvian economy.
This analysis, covering 1992 to 2022, identified 208 Chinese companies operating in Peru, with 186 registered locally and 22 functioning under foreign permits. Mining marked the beginning of this economic relationship.
In 1992, Shougang Corporation acquired Hierro Perú, followed by China National Petroleum Company’s purchase of Petroperú’s oil blocks in 1993. Today, mining remains the cornerstone of Chinese investment, accounting for $13 billion (47%) of total Chinese FDI in Peru.
Major projects include the Las Bambas and Toromocho copper mines. These projects underscore China’s strategic interest in securing critical minerals for its industries. Energy ranks as the second-largest sector, with $9.2 billion (33%) invested in electricity generation and distribution.
China’s Expanding Footprint in Peru
Notable acquisitions include Luz del Sur and Enel Perú by Chinese state-owned enterprises. Oil and gas investments follow with $2.8 billion (10%), while infrastructure projects, such as the Chancay Port, represent $1.3 billion (5%).
In addition, fisheries and finance round out the portfolio with $1.16 billion (4%) and $425 million (2%), respectively. The Chancay Port project exemplifies China’s ambitions in Peru.
Developed by COSCO Shipping Ports in partnership with Volcan Compañía Minera, this $3.6 billion deepwater port aims to transform global trade routes. Located 78 kilometers north of Lima, it will reduce shipping times to China by up to 20 days and cut logistics costs by over 20%.
Once fully operational, Chancay is expected to generate $4.5 billion annually for Peru’s economy while creating over 8,000 jobs. China’s investments extend beyond infrastructure and resources. Through initiatives like the Belt and Road Initiative (BRI), Beijing has integrated Peru into its global economic strategy.
However, these developments have raised concerns about environmental impacts, social tensions, and geopolitical implications. Critics argue that Chinese projects often prioritize Beijing’s interests over local benefits, potentially deepening Peru’s dependence on China.
As China continues to expand its footprint in Peru, this partnership offers both opportunities and challenges. While it fuels economic growth and trade connectivity, it also demands careful management. This is necessary to ensure long-term sustainability and sovereignty for Peru.