The recent problems of China’s mega-port project in Chancay, Peru, renewed concerns about Chinese companies’ shoddy workmanship as well as China’s true motives behind its strong participation in what is envisioned as a major trading hub in the region.
In mid-May, following a landslide at one of the port’s tunnel construction sites, which caused several houses and streets to collapse in the nearby town of Peralvillo and forced the company to suspend construction, Peru’s Prosecutor’s Office launched an investigation into China state-owned China Cosco Shipping Ports Ltd. The company was also ordered to report on the work it has been carrying out, Mercopress reported.
As part of the project, Cosco is building an 1.8 kilometer tunnel under the Peralvillo town in the city of Chancay, to connect the port with a highway. The project, which will be the largest in the region, with a $3.5 billion investment, will include 15 terminals to mobilize more than 5 million containers annually. It will even receive the largest cargo ships in the world, Argentine news site Todo Noticias reported.
This is far from the only problem the project has faced. In October 2022, construction of the tunnel led to the partial collapse of a street in that same town, causing inhabitants to fear for their safety. According to Peru’s AmericaTV, Cosco blamed the issues on the town’s poor constructions.
“It felt like an earthquake,” a town resident told Peruvian daily Gestión in a video, her voice trembling.
Explosions used to flatten the terrain to develop the mega-port have also caused the walls of many houses to crack. In addition, in late 2022, the Santa Rosa Chancay Wetland Environmental Monitoring Committee warned that construction was affecting the flora and fauna of the protected area.
Then there are concerns about China’s increasing foothold in the region and the potential dual use of the port.
“China’s port construction is linked to its economic interests to exploit, maximize, and control global logistics routes, as part of the Belt and Road, to preserve its food and energy security,” Sergio M. Cesarín, coordinator of the Center for Asia-Pacific and India Studies at the Tres de Febrero University in Argentina, told Diálogo on July 19.
The new terminal will become one of the main ports of departure for the products that the region exports to China, including copper and other minerals. It will also connect Chile, Colombia, and Ecuador, reported Peruvian daily La República on July 13.
“We are ceding sovereignty in the sea and on land. Why does China have to be the one in control of this strategic place and not the Peruvian government?” Miriam Arce, secretary of the organization Frente de Defensa de Chancay, the neighborhood group most closely following the port’s progress, told Todo Noticias.
Several Chinese companies manage port terminals globally (such as Cosco), with some being favored by China’s People’s Liberation Army Navy (PLAN). Although their primary focus is commercial, these facilities also enable the PLAN to conduct various peacetime operations away from its shores, the U.S. think tank Carnegie Endowment for International Peace noted.
The Carnegie Endowment also indicated that this port network serves as a platform for intelligence gathering. Port operators obtain detailed information on ships, routes, cargoes, and other information that could be of value for military intelligence, especially when military vessels visit commercial ports.
“China carries out ongoing spying on everything that goes on in the world. All this happens right under our noses and it’s hard to see it, but you have to see it,” Agustín Barletti, Argentine journalist and author of the book The Dragon’s Hunger: China’s Plan to Devour the World, told Infobae. “It’s making a colossal geopolitical imbalance in a super-hot zone.”
“With the increasing rise of Chinese interests in the world, China is showing concerns about defending these interests from possible aggression,” Cesarín said. “In many cases, some of its ports could have a purpose for the deployment of military power, mainly naval and air power.”
The Chinese regime’s military intentions are murky. But President Xi Jinping made it abundantly clear that he intends for China to take center stage in the world, U.S. financial magazine Barron’s said. Beijing’s seaports in the world are a hidden geopolitical risk.
China has a military base in Djibouti, in the Horn of Africa, and plans to establish another in Ream Naval Base in Cambodia, on the Gulf of Thailand, to control inter-oceanic passages in this tense area of Asia, such as the straits of Malacca and Makassar.
Chinese companies’ commercial port assets are an essential part of the puzzle for PLAN planners, who must meet their government’s demands to project power abroad, the Carnegie Endowment indicated.
China also wields “soft power” through financing and port construction in countries desperate for development, the U.S. think tank Council on Foreign Relations indicated. “Beijing is not an innocent actor, something we in Latin America don’t seem to understand yet,” Cesarín said.
“It uses all its soft and hard power to put pressure. Evidently the financial dependence that can derive in the debt trap works because that dependence created imposes conditions and those conditions are given under pressure,” Cesarín added. “Economic retaliation exists.”
The growing trade dependence with China represents a significant challenge to Latin American economies, and any retaliatory measure or action Beijing takes will have a direct impact on exports and sales, Cesarín said. This is a scheme that China has in place with all countries.
Latin America is heavily involved in China’s port infrastructure expansion plans, Cesarín added. Of the 100 most important ports in the world, 57 are Chinese firms’ control.
According to Barron’s, there are three strategies to counter the Chinese naval threat: The first is to develop a plan based on the Americas Partnership for Economic Prosperity, announced in January, to negotiate agreements to pre-empt Chinese infrastructure investments in the region.
Another is to leverage the Indo-Pacific Economic Framework for Prosperity, launched in May to attract strategic countries in Asia, including Cambodia. Then countermeasures must be developed against China’s Belt and Road Initiative, which is already facing setbacks, funding shortages, and political pushback, stalling several projects.