Ship traffic is picking up between China and Peru with the opening of a port near Lima that is majority Chinese-owned and features the latest Chinese technology, slashing transportation times while alarming the US.
The city of Chancay is about 80 kilometers north of Lima. Its port, which opened in November 2024, lies beyond a 1.8-kilometer tunnel running beneath the city.
Before entering, visitors are asked to register with a facial recognition system of the sort that has proliferated across China. The port has high-speed 5G wireless connectivity from Huawei Technologies, which representatives say speeds up entry and exit procedures for trucks.
The port of Chancay is operated by COSCO Shipping Ports Chancay Peru (CSPCP), which is 60%-owned by China COSCO Shipping, China’s largest state-owned shipping company.
The facility enables cargo from South America to travel directly to Asia, instead of needing to go through Central or North America, slashing transportation time to 23 days from 35.
The port project was developed under the auspices of the Chinese government as a key South American part of its Belt and Road infrastructure initiative. Chinese President Xi Jinping attended the port’s opening ceremony by video link.
Among Chancay’s biggest features is its use of implementation of cutting-edge Chinese automation technology.
During a visit on a weekday in late July, the port was recreated on a large indoor display, showing the status of shipping containers and driverless vehicles around the facilities in real time, along with detailed data.
Chancay is “one of the most advanced ports in the world,” said Gonzalo Rios, deputy general manager at CSPCP. It is akin to a miniature version of Shanghai’s port, complete with environmental advances such as seawater recycling.
In a room lined with monitors, employees watched cranes load and unload cargo. While they can take control of the cranes if necessary, the equipment ran without any human intervention. Nearly no workers could be seen around the port even as it handled an influx of Chinese-built cars and shipping containers.
The dramatic improvement in convenience offered by the new port has fueled demand. After a half-year of trial operation, the port entered full operation in June. During the trial period, roughly USD 1 billion in transactions came through the port, with the Peruvian government taking in around PEN 500 million (USD 140 million) in revenue, according to Rios.
Chancay’s annual capacity is expected to reach 1.5 million twenty-foot equivalent units (TEUs) as planned.
“This can become a hub port for Central and South America,” Rios said. “We anticipate further growth from expanding production and infrastructure development in South American countries.”
The port is bringing South American goods to Asian markets besides China as well, including Peruvian-grown blueberries for Indonesia and India.
COSCO has invested about USD 1.3 billion in the port so far, with plans for a total of USD 3.5 billion in spending. It aims to expand to 15 berths from the current four.
Chancay has the potential to transform trade between South America and Asia, potentially enabling the realization of the longtime dream of a direct shipping route from the Atlantic coast to Asia. Brazil, an increasingly prominent global food supplier, is in talks with China over the construction of a transcontinental railway between Chancay and eastern Brazil.
About 30% of Brazil’s exports go to China. Its trade with the US swelled by a multiple of 68 between 2000–2023, while trade between 12 South American countries and China grew 40-fold over that period.
The involvement of China’s government in the Chancay port has long been a concern for the US When it first opened, Laura Richardson, then commander of the US Army’s Southern Command, voiced concern that it could be used by China’s navy.
A report released in June by the Center for Strategic and International Studies noted Chinese involvement in 37 port products in Latin America and the Caribbean, classifying Chancay as high-risk.
“China’s interest in LAC [Latin American and Caribbean] ports is more widespread, and the risk more varied, than previously known,” the report said, adding that these investments “open the door for Beijing to gain strategic leverage, collect sensitive data, and expand its geopolitical influence closer to US shores.”
CSPCP’s Rios dismissed these concerns. “We are a private company, and we operate only for commercial purposes,” he said.
Because Peruvian law mandates stringent procedures for foreign warships docking at ports, “military operations would be impossible,” he said.
Companies in Japan, for example, are hesitant to use the Chancay port for fear of angering the US. Rios said this should not be cause for concern.
“Peru is one of the most open countries in the world for foreign business and investment,” he said.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.