CHANCAY, Peru. Chinese President Xi Jinping commenced a high-profile diplomatic tour of Latin America by inaugurating a massive deep-water port in Peru, a $1.3 billion project that reflects China’s expanding influence and investment across the continent. The Chancay Port, located roughly 80 kilometers north of Lima, is poised to become a key gateway for trade between Asia and South America, marking the latest expansion of China’s Belt and Road Initiative (BRI).

During a virtual ceremony on Thursday, Xi and Peruvian President Dina Boluarte celebrated the port’s opening and signed a bilateral agreement to enhance their existing free trade pact. Xi praised the Chancay Port as a foundation for a new “21st-century maritime Silk Road,” highlighting it as a critical link in China’s BRI—a revival of the historic Silk Road trade routes aimed at creating economic corridors across continents. “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 remarked, referencing the ancient Inca network.

Chancay Port, developed by Chinese state-owned Cosco Shipping Ports, features 15 berths and has been designed to accommodate some of the world’s largest shipping vessels. According to Xi, the port is projected to generate $4.5 billion in annual revenue, create over 8,000 direct jobs, and lower the logistics costs of the Peru-China shipping route by 20%.

Peruvian officials highlighted that the port’s first shipment—a consignment of Peruvian fruits bound for China—is set to depart next week. “This project is more than a port; it’s a gateway to greater economic integration with Asia,” Mario Ocharan, director of the Chancay Chamber of Commerce, stated. He explained that the megaport will allow China to access neighboring Brazil, where a proposed $3.5 billion railway would transport exports like soybeans and iron ore to Chancay for expedited shipping.

Cosco’s corporate affairs manager for the Chancay project, Mario de las Casas, emphasized that the rail link to Brazil is “crucial” for enhancing agricultural exports, particularly soybeans, as Brazil is China’s largest supplier of the commodity.

Strategic Concerns in Washington

While China heralds Chancay as a purely economic venture, its strategic implications have raised concerns in Washington. General Laura Richardson, the former head of U.S. Southern Command, warned that Chancay could potentially serve dual-use purposes, such as a base for the Chinese navy or for intelligence operations, sparking fears over increased Chinese influence in a region historically within the U.S. sphere.

In response, China’s state-backed Global Times dismissed these concerns, labeling U.S. warnings as “smears” and reiterating that the port was “by no means a tool for geopolitical competition.”

Experts note that Chancay’s operational capacity will allow it to receive the largest ships, which will reduce the need for cargo to be consolidated at intermediary ports, saving both time and costs. “Chancay illustrates how China seeks secure access to resources and markets and its ever-more successful fight to corner global value added,” said Robert Evan Ellis, a Latin America research professor at the U.S. Army War College.

Xi Jinping’s Latin American tour will continue with his attendance at the Asia-Pacific Economic Cooperation (APEC) summit in Lima, followed by the Group of 20 summit in Rio de Janeiro. The new port, along with China’s broader investments in Latin American infrastructure, underscores the country’s long-term commitment to strengthening its economic ties in the region.