MercoPress. South Atlantic News Agency

China-funded port in Peru poses threat to Chilean foreign trade operations

Chancay is scheduled to open in November

A China-sponsored mega-port north of Lima is expected to revolutionize trade between Asia and South America. It would also jeopardize the future of seashore facilities in northern Chile which might lose some of their traffic share once the Chancay Megaport is opened. Works are 93% completed and are due to be finished in November.

The Chancay Megaport is being developed by China's Cosco Shipping. It is strategically located north of Lima and seeks to become a direct connection with the Asian market, particularly China, by reducing transport times and costs. Chilean shipping experts fear that once operational, Chancay could divert an important part of the traffic currently handled by San Antonio and Valparaiso.

These historic leading ports have limited expansion capacities due to their location close to urban areas. In this scenario, Chancay, with its modern infrastructure and capacity to receive large vessels, could offer a more efficient and economical alternative for shipping companies seeking to optimize their routes.

San Antonio General Manager Luis Knaak admitted that Chile's infrastructure, although efficient, could be affected if goods previously arriving at its ports are diverted to Chancay because it would also affect the entire logistics chain handling these cargoes.

Funded with some US$ 3.5 billion of Chinese money, Chancay is expected to be finished on schedule, according to Cosco's Safety Manager Jason Guillén, who confirmed the arrival of key equipment and a vessel with 1,700 empty containers to test cranes and operating systems, which would allow reaching 100% progress in the next few days.

Foreign trade consultant Mariana Coronado told MercoPress back in 2022 that under the Maritime Silk Road, China launched its economic project to control the largest number of ports in the world“While the world was in [Covid-19] quarantine, China expanded its control of the transport of goods. Today nearly 100 ports in more than 60 countries are in Chinese hands,” she explained back then.