US Warns Peru on Sovereignty Amid China's Control of Chancay Megaport

US Raises Sovereignty Concerns Over Chancay Port

The United States has expressed significant concern to Peru regarding China's growing influence over critical infrastructure, particularly the Chancay megaport. The warning, issued by the US State Department's Bureau of Western Hemisphere Affairs, suggests that Peru could risk losing sovereignty due to China's increasing control. This concern was amplified following a Peruvian court ruling that restricted a local regulator's oversight of the Chinese-built port.

The US State Department stated on social media that it was 'concerned about latest reports that Peru could be powerless to oversee Chancay, one of its largest ports, which is under the jurisdiction of predatory Chinese owners.' It further added, 'We support Peru's sovereign right to oversee critical infrastructure in its own territory. Let this be a cautionary tale for the region and the world: cheap Chinese money costs sovereignty.'

The Strategic Importance of Chancay Megaport

Located approximately 60 to 80 kilometers north of Lima, the Chancay megaport is a deepwater facility designed to be a pivotal trade hub between South America and Asia. With an investment reported between $3.5 billion and $3.6 billion, it is considered the deepest port in Latin America, capable of accommodating some of the world's largest cargo ships. The port was officially inaugurated on November 14, 2024, with Chinese President Xi Jinping and Peruvian President Dina Boluarte attending the ceremony virtually.

The project is a significant component of China's Belt and Road Initiative (BRI) in Latin America, aiming to reduce shipping times between the continents by approximately 10 days. The port's ownership structure involves Chinese state-owned COSCO Shipping Ports holding a 60% stake, with the remaining 40% owned by Peruvian mining company Volcan Compañía Minera.

Regulatory Challenges and Chinese Rebuttal

A recent Peruvian court ruling has been central to the US concerns. This ruling restricted the oversight of Ositran, Peru's national infrastructure regulator, over the Chancay port. Ositran, which supervises other major ports in the country, has indicated its intention to appeal the decision, arguing against the exemption of COSCO Shipping from its regulatory authority.

In response to the US warning, Chinese Foreign Ministry spokesperson Lin Jian strongly rejected the comments, characterizing them as 'blatant rumor-mongering and smearing.' COSCO Shipping also dismissed the US claims, asserting that the port operates 'under the jurisdiction, sovereignty and control of Peruvian authorities, subject to all Peruvian regulations.'

Broader Geopolitical Context

China has been Peru's largest trading partner for over a decade, and its investments in Latin American infrastructure are part of a broader strategy to enhance trade connectivity and secure supply chains. The US views China's expanding economic footprint in the Western Hemisphere with increasing scrutiny, particularly concerning potential geopolitical and national security implications.