Chinese President Xi Jinping and Colombian President Dina Boluarte met to actually inaugurate a new US$ 3.6 billion deepwater mega-port in Peru, called Chancay, on their way to the G20 conference in Rio de Janeiro in November.
China’s state-owned Cosco shipping giant had purchased a 60 % stake in the port for$ 1.6 billion, which gave the company exclusive use of the port for 60 years. Weeks later, the first fleet departed for Shanghai loaded with strawberries, bananas and materials.
China’s plan for a maritime Silk Road in the 21st century that may better join its manufacturing hubs with its global trading partners includes Chancay. The West is concerned about China’s growing influence over global transport routes because of the high investments in ships in many nations.
Donald Trump, the just re-elected US president, made clear these issues when he claimed that China was “operating” the Panama Canal and that the US intended to retake it. China does not run the river, nevertheless. Instead, a Hong Kong organization runs two ships on either side.
Port growth growth
The maritime Silk Road has a remarkable scope and scale. China has invested in 129 ships in lots of countries through its state-owned companies, mostly in the Global South. Seventeen of these ships have majority-Chinese rights.
According to one estimate, Taiwanese firms invested$ 11 billion in international port advancement from 2010–19. Leading Chinese companies today own direct stakes in stations where more than 27 % of the world’s container industry is currently conducted.
China has entered Latin America violently, becoming the country’s leading trading partner. Its interface approach has evidently signaled a long-term aim to get the exports important to its food and energy security: soybeans, corn, beef, iron ore, copper and battery-grade lithium.
Last season, for instance, Portos do Paraná, the Portuguese state-owned organization that functions as the port authority in the state of Paraná, signed a letter of intent with China Merchants Port Holdings to develop Paranaguá Container Terminal, the second-largest switch in South America. Due to the 22 stations scheduled to be auctioned before the close of 2025, China may participate in even more Portuguese ships.
In Africa, Chinese purchase grew from two ships in 2000 to 61 infrastructure in 30 countries by 2022. Additionally, the Belt and Road Initiative in Europe is led by Chinese companies that own two significant ports in Belgium and Greece, which are the so-called “dragon’s brain” of the program.
Hard-driving interface strategy
Xi’s goal of having a global economic hegemony is largely driven by its rise as a sea and delivery power.
For one, China requires steady access to important trading routes in order to continue meeting both the exports Beijing needs to keep its market strong and the need for Chinese exports abroad.
China can establish economic zones in other nations that grant terminal owners and operators unrestricted access to goods and products by controlling ports as well. Some feared that this might cause China to stifle the supply of some goods or even have an impact on the political or economic policies of various nations.
The metal and minerals needed to power China’s rise as a technology superpower are another important component of this technique. Beijing has focused its interface investments in those areas with the most important resources.
For example, China is the world’s largest supplier of copper ore, primarily from Chile, Peru and Mexico. It is also one of the country’s major lithium hydroxide manufacturers, primarily from Chile and Argentina. Additionally, its terminal agreements in Africa give it access to unique rocks and other nutrients.
Latin America’s expansion also helps to resolve China’s recent industry disputes with Europe. Additionally, it eliminates worries about potential US taxes Trump might impose on Chinese products.
Military problems
Washington is concerned about these actions because it makes sense that China is challenging US effect in its own neighborhood.
China maintains that its port geopolitics is market-oriented. However, it has established a naval base in Djibouti, a country in Africa that is carefully placed. Additionally, it is alleged that Equatorial Guinea is developing a new naval foundation.
According to a recent review by the Asia Society Policy Institute, plan experts believe China is seeking to “weaponize” the Belt and Road Initiative. One way it does this is by requiring that the business ships it invests in be able to serve as naval foundations as well.
14 of the 17 ports where it holds a majority of the stakes have the potential to be used for marine purposes so much. These ports may then fulfill a dual purpose: they support the Taiwanese military’s logistic network and help Chinese naval vessels to travel farther away from home.
US officials worry that China might use its influence on private companies to stifle business during a time of conflict.
American response
While China’s assets are raising concerns, the West’s determination to invest in ships at this level is limited. The US International Development Finance Corporation, for example, has a little slower, comprehensive approach for its investments, which usually leads to better outcomes for both investors and host nations.
However, some Western companies are acquiring stakes in established and newly built ports in other countries, albeit not to the extent of Chinese enterprises.
The French shipping and logistics company CMA CGM’s global port development strategy, for example, includes investments in 60 terminals worldwide. In 2024, it acquired control over South America’s largest container terminal in the Port of Santos, Brazil.
Trump has threatened to impose tariffs as a means of limiting China’s position on the world stage. A member of his transition team’s advisor has suggested a 60 % tariff on any product passing through Peru’s Chancay port or any other Chinese-owned or controlled port in South America.
Rather than making nations reluctant to sign port deals with Beijing, however, this kind of action just erodes Washington’s regional influence. Additionally, China is likely to take retaliatory measures, such as outlawing the US’s export of crucial minerals.
Host nations like Peru and Brazil, meanwhile, are using the competition for port investment to their advantage. They are increasingly asserting their autonomy and adopting a strategy of using ports to “play everywhere” on the global stage, drawing attention from both the West and China.
Claudio Bozzi is lecturer in law, Deakin University
This article was republished from The Conversation under a Creative Commons license. Read the original article.