The new Port of Chancay, a Chinese-bult mega port on Peru’s Pacific coast, is set to transform regional trade, and possibly have new geopolitical implications. 

The new port, which was built in a partnership between Cosco, the leading Chinese shipping company and Volcan, a local Peruvian mining company, at a cost of $3.6bn, promises to transform Peru’s trade.  

The port will be able to accommodate larger vessels, giving Peru’s exports of copper and fruit more markets, potentially turning the nation into “the Singapore of South America”, according to the Financial Times. 

Copper is Peru’s largest export, with an annual figure of $47 billion according to ALPS Marine.  

The deepwater port will be able to berth some of the world’s largest shipping vessels, with a capacity of 22,000 twenty-four equivalent units (TEU), making it the only South American port on the Pacific Coast able to do so. 

Callo, Peru’s main port has also expanded this year, with new annual capacity of 3.7 million TEU, according to the Peru Transport Ministry.  

Furthermore, as the FT reports, the new port at Chancay, will reduce China and Peru transit times from 35 to 25 days, eliminating the need for stopovers at either Manzanilla port in Mexico or Long Beach in California. 

Following a passing of legislation by Peruvian lawmakers in May this year, that granted Cosco exclusive rights to operate Chancay, there has been concerns raised over whether the Chinese investment, represents a ceding of Peruvian sovereignty over the port.  

Many US officials are concerned that the port can be used as a base for Chinese warships, an issue likely to become more prominent following the election of Donald Trump, who has promised a tougher stance against China. 

China’s investment in Chancay, is part of the China’s Belt and Road Initiative, adding another key investment in a large portfolio of Chinese investments in the country, including the Las Bambas, Peru’s largest copper mine, owned by MMG, a Chinese miner.  

China is Peru’s largest trade partner, with copper ores making up $16 billion of the $24 billion of trade in 2023 between the two countries according to analysis by ALPS Marine. 

In comparison, the US-bound exports from Peru, only amounted to $6 billion, according to ALPS Marine.