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The United States has issued a caution to Peru regarding China’s increasing influence over a significant Pacific port, suggesting it could undermine Peru’s sovereignty. This development adds to the growing tension over China’s presence in Latin America.
The focus of this concern is the $1.3 billion deep-water port in Chancay, located north of Lima. This site has become a battleground between Washington and Beijing, particularly following a Peruvian court decision that curtails governmental oversight of the project.
Through social media, the State Department’s Bureau of Western Hemisphere Affairs expressed its worries, stating, “We are troubled by recent reports indicating that Peru might lack the authority to regulate Chancay, one of its largest ports, now under the control of aggressive Chinese interests. We affirm Peru’s sovereign right to manage its own critical infrastructure. This situation should serve as a warning to the region and globally: the allure of inexpensive Chinese investments comes at the expense of sovereignty.”
A drone captures cranes and containers at the new megaport under construction by China’s state-owned Cosco Shipping, which aims to expedite sea routes to Asia for goods from Peru and parts of Brazil, in Chancay, Peru, on October 24, 2024. (Angela Ponce/Reuters)
In response, China’s foreign ministry dismissed the U.S. remarks as “rumor-mongering and smearing,” asserting that the project still falls under Peruvian jurisdiction, according to a report by The Associated Press.
Asia analyst Gordon Chang told Fox News Digital: “Chancay is so central that analysts say it will redirect trade across the South Pacific. We know Beijing considers ports to be dual-use and strategic. China, held up the BlackRock deal to acquire the CK Hutchinson port operations in the Panama Canal Zone even though the ports are nowhere near China itself.”
“In times of war, China will not allow its port operations to load, unload, or service American ships or ships coming from or going to U.S. ports,” he warned.
Jack Burnham, senior analyst in the China program at the Foundation for Defense of Democracies, said the port reflects a broader strategic push by Beijing in the region.
Workers stand next to cranes at the new megaport being built by China’s state-owned Cosco Shipping, in Chancay, Peru. Oct. 24, 2024. (Angela Ponce/Reuters)
“The Chancay port is a keystone in China’s investment in Latin America — its size and proximity provide a bridge across the Pacific and access to another market to fuel Beijing’s export-driven economic engine,” Burnham said.
“China’s investment in Peru is predicated on Beijing grasping the sinews of Lima’s critical infrastructure to gain influence. With effective control over the port cemented for now by a lower Peruvian court ruling, China gains access to one of the largest critical infrastructure projects in the region, a position from which it could exercise significant control.”
The dispute comes as Washington and Beijing compete for influence across Latin America, where China has expanded investment through infrastructure projects and trade, analysts say.
Fishing boats are anchored in the bay near the new megaport being built by China’s state-owned Cosco Shipping, in Chancay, Peru Oct. 24, 2024. (Angela Ponce/Reuters)
China’s state-owned shipping giant Cosco, which holds a majority stake in the project, dismissed U.S. concerns and said the court ruling “in no way involves aspects of sovereignty,” adding that Peruvian authorities still oversee security, environmental compliance and customs, according to The Associated Press.
Peru’s transport infrastructure regulator, Ositran, has said it plans to appeal the ruling, arguing the port should not be exempt from the same oversight applied to other major facilities.
Embassy spokesperson Liu Pengyu told Fox News Digital that China strongly opposes what it called U.S. “false accusations and disinformation” regarding the Chancay port, citing remarks made by a Foreign Ministry spokesperson at a regular briefing on Feb. 12.
He described Chancay as a flagship China-Peru Belt and Road project and South America’s first “smart and green” port, saying the first phase is expected to cut shipping time between Peru and China to 23 days and reduce logistics costs by more than 20%, while generating about $4.5 billion annually for Peru and creating over 8,000 direct jobs. Liu said the project will strengthen Peru’s role as a regional trade gateway linking Asia and Latin America and support broader development, including environmental initiatives tied to wetlands and coastal habitats.
He added that China–Latin America partnerships are driven by shared development goals and benefit people on both sides.