Chile · Diplomacy
Key Facts
—Fiscal target. Fujimori’s plan aims to cut Peru’s fiscal deficit to 1% of GDP and restore strict fiscal rules.
—Deregulation. A “shock desregulatorio” would eliminate roughly 500 bureaucratic procedures and digitize most business processes.
—Investment goal. The agenda targets an additional US$5–7 billion in private investment annually and more than 500,000 formal jobs.
—Mining fast-track. Strategic mining projects would get accelerated approvals, with a proposal to direct 40% of mining royalties to nearby communities.
—China envoy. Xi Jinping sent Science and Technology Minister Yin Hejun as his special envoy to Fujimori’s inauguration, signaling the bilateral agenda’s importance.
*As a new right-leaning axis takes shape on the Pacific coast, Chile’s José Antonio Kast is synchronizing economic playbooks with Peru’s Keiko Fujimori just weeks before both leaders are expected to engage China’s Xi Jinping at the APEC summit.*
A right-leaning axis on the Pacific
Chile’s José Antonio Kast has moved quickly to open a shared economic agenda with Peru’s newly inaugurated President Keiko Fujimori. The two leaders represent a distinct rightward shift on South America’s Pacific coast, anchored in fiscal conservatism and a strong embrace of private investment.
Their alignment goes beyond ideological affinity. It signals an attempt to build a coordinated pro-market bloc that can negotiate from a position of strength with the region’s dominant trading partner, China.
Inside Fujimori’s economic playbook
Fujimori’s economic agenda rests on three pillars: fiscal discipline, sweeping deregulation, and unlocking private capital. Her team has pledged to slash the fiscal deficit to 1% of GDP while imposing a “shock desregulatorio” that would strip out about 500 administrative procedures.
The plan targets an additional US$5–7 billion in private investment each year, with a special focus on mining. Strategic mining projects would receive fast-track approvals, and a proposal circulating in her camp would channel 40% of mining royalties directly to nearby communities.
Growth, in Fujimori’s framing, must come from both ends of the business spectrum—supporting micro and small enterprises while finally unblocking large and medium-sized projects that have been stalled by red tape.
The China equation at APEC
Kast plans to visit Xi Jinping in China around the November APEC gathering, a meeting that will test how the emerging Pacific bloc balances ideology with economic reality. China remains both Chile’s and Peru’s largest trading partner, a relationship neither leader can afford to disrupt.
Beijing has already signaled it is watching closely. Although Xi did not personally attend Fujimori’s 2026 inauguration, he dispatched Science and Technology Minister Yin Hejun as a special envoy, a calibrated gesture that underscored the stakes of the bilateral agenda.
Fujimori has explicitly said Peru will prioritize APEC and expand investment and cooperation with Asia-Pacific partners. The challenge for her and Kast is to maintain that economic openness while building a bloc that is politically distinct from the region’s left-leaning governments.
Mining, trade and the deregulation race
Mining is the thread that ties the domestic agenda to the geopolitical one. Both Chile and Peru are top global copper suppliers, and China is the primary buyer. Fujimori’s fast-track mining approvals and royalty-sharing proposal are designed to boost output without igniting social conflict.
Kast’s interest in the Peruvian model suggests a deregulatory race could take hold on the Pacific coast. If both countries streamline permitting and offer stable fiscal rules, they could jointly position themselves as the world’s most attractive mining jurisdiction at a time when the energy transition is driving demand.
The risk is that a simultaneous push to accelerate extraction could strain community relations and environmental oversight, testing the bloc’s claim that faster growth and local benefits can go hand in hand.
What the Kast-Fujimori axis means for investors
For international investors, the emerging alignment offers a clearer, more predictable policy corridor between Santiago and Lima. Two governments committed to fiscal rules, deregulation and mining incentives reduce the political risk premium that has long dogged Andean projects.
Yet the axis remains untested. Its cohesion will depend on whether Kast and Fujimori can deliver on their domestic reform promises while managing the inherent tension of building a right-leaning political identity around economies that are structurally dependent on Chinese demand.
Frequently Asked Questions
What is the Kast-Fujimori economic agenda?
It is a coordinated pro-market push centered on fiscal discipline, deregulation, and fast-tracking private investment, especially in mining, to create jobs and growth on the Pacific coast.
How does China fit into this relationship?
China is both Chile’s and Peru’s largest trading partner. Fujimori has pledged to prioritize APEC and Asian investment, and Xi Jinping sent a senior envoy to her inauguration, signaling Beijing’s intent to maintain strong ties.
What are the key mining proposals in Fujimori’s plan?
Her plan includes fast-track approvals for strategic mining projects and a proposal to direct 40% of mining royalties to nearby communities, aiming to boost output while addressing local demands.
Will Xi Jinping meet Kast and Fujimori at APEC?
Kast plans to visit Xi in China around the November APEC summit. While no formal trilateral meeting has been confirmed, the summit is the natural venue for the new Pacific bloc to engage its largest trading partner.
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