Peruvian port helps spur trade with China

China and Peru, separated by the vast expanse of the Pacific Ocean, stand worlds apart. Stretching across thousands of miles of open water, the distance between the two nations has long seemed a challenging geographic barrier.

Yet, like a beacon of connectivity, Chancay Port — an important project under the Belt and Road Initiative cooperation — has emerged in Peru, bringing these distant lands closer.

The port is set to be a transformative gateway not just for bolstering the trading competitiveness of the Andean nation, but also for the broader Latin American region developing new shipping routes and catalyzing deeper economic integration into global markets, experts said.

Situated about 60 kilometers north of Peru's capital Lima, the deepwater port is co-invested by China's COSCO Shipping and Peru's Volcan Compania Minera SAA — a collaborative project between China and Peru under the BRI.

The project, which was initiated in 2021, opened for operations on Nov 15. The first phase of the port features four dock berths, with a maximum depth of 17.8 meters. This substantial depth enables the port to host mega container vessels with carrying capacities reaching up to 18,000 twenty-foot equivalent units, COSCO said.

Before construction of the port, the country lacked a deepwater port capable of accommodating large container ships, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

This meant that cargo shipments from China destined for Peru had to be transshipped through intermediate hubs in locations like Mexico, Panama and other regional centers. This transshipment process added time and cost to the overall supply chain. But with the launch of direct shipping services, that burden has been dramatically alleviated. The first phase of the project will reduce the sea shipping time from Peru to China to 23 days, thus cutting logistics costs by at least 20 percent, Zhou said.

The newly opened Chancay Port is poised to deliver significant economic and social benefits to Peru as well, beyond its transformative effects on the country's international trade and logistics capabilities.

According to estimates from the Central Reserve Bank of Peru, the port is expected to contribute 0.3 percent to the country's GDP during its initial phase of operations. And once all planned infrastructure is fully developed, the port could account for as much as 0.9 percent of Peru's total economic output.

The port's development is creating thousands of new jobs — both directly and indirectly — for local communities. Construction of the port facilities has generated around 1,300 direct jobs so far, with an additional 8,000 indirect jobs supported through supply chains and ancillary industries, according to the bank.

Chancay Port is expected to have significant effects not just on the Peruvian economy, but on trade flows across Latin America, said Liang Haiming, dean of the Belt and Road Research Institute at Hainan University.

With the direct maritime connections, the transit time for cargo between Latin America and Asia is projected to decrease from 35 days to just 25 days. It will unlock new trade and investment opportunities between Latin America and Asian economies, Liang said.

China's efforts to deepen economic and infrastructure ties with Latin America through the BRI reflect a long-term vision to foster shared prosperity across the Global South, Liang said.

So far, a total of 22 Latin American and Caribbean nations have joined the BRI by signing different cooperation memoranda. The strengthening partnership between China and Latin America carries significance for the region, providing an avenue to reduce reliance on traditional economic powers and explore more diverse international trade models, Liang added.