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November 15, 2024 | 06:27 pm
TEMPO.CO, Lima - Chinese President Xi Jinping launched a week-long diplomatic blitz of South America on Thursday by inaugurating a massive deep-water port in Peru, a $1.3 billion investment by Beijing as it seeks to expand trade and influence on the continent.
With China's demand for agricultural goods and metals from Latin America growing, Xi will participate in the Asia-Pacific Economic Cooperation summit in Lima and then head to the Group of 20 summit in Rio de Janeiro next week, where he will also make a state visit to Brazil.
Xi and Peruvian President Dina Boluarte participated on Thursday by video link in the opening of the Chancay port, about 80 kilometers (48 miles) north of Lima on the Pacific Ocean, and signed a deal to widen an existing free trade agreement.
Xi said that Chancay, a 15-berth, deep-water port, was the successful start of a "21st century maritime Silk Road" and part of China's Belt and Road Initiative, its modern revival of the ancient Silk Road trading route.
"China is willing to work with the Peruvian side to take the Chancay project as a starting point to forge a new maritime-land corridor between China and Latin America and connect the Great Inca Trail," Xi said, referring to a 15th-century mountain network that joined the Inca empire.
In an opinion article in the El Peruano state newspaper, Xi said the Chancay project would generate $4.5 billion in annual revenues, create more than 8,000 direct jobs, and reduce the logistics costs of the Peru-China route by 20%.
The China-controlled megaport was built by Cosco Shipping Ports (1199.HK) and received $1.3 billion in Chinese investment for its first phase. China is expected to spend billions more as Beijing and Lima work to position it as a major shipping hub between Asia and South America.
The first ship was due to set sail from Chancay next week, transporting Peruvian fruit to China, Mario Ocharan, Peruvian director of the Chancay Chamber of Commerce, said.
China's main motivation for developing the megaport, according to Ocharan, was access to neighboring Brazil, where a new railway line is planned to carry Brazilian exports such as soybeans and iron ore to the port.
The rail project is estimated to cost $3.5 billion, according to Mario de las Casas, corporate affairs manager at Cosco Shipping Chancay Peru.
Building that link is "crucial" to improve the transportation of soybeans as Brazil is the top seller of the commodity to China, he said.
REUTERS
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