Peru: Canary in a coal mine

I’m following Peru as a canary in a coal mine for interference in South America and Latin America and the Caribbean as a whole.  You may remember the article that I wrote on Peru, just a few weeks ago.  https://sovereignista.com/2024/05/18/latin-america-and-peru/

The countries that are either lying in the nest as full-on empire eggs or at risk, are Peru (which may be a new win for the empire), Argentina (where the President now acts like a fool as well as being a fool calling himself the most intelligent president in the world and doing exceedingly bad rock concerts I kid you not), Chile, Paraguay and Ecuador. Ecuador is a surprise and is under severe pressure and threat. This is pushback against China’s influence in the so-called backyard of the hegemon and there is a concerted effort from the hegemonic side to win back influence.  The initial Monroe Doctrine is being dusted off and shined up, although most of Latin America and the Caribbean are furious about it.   https://www.bloomberg.com/opinion/features/2023-12-03/america-s-best-strategy-for-cold-war-ii-the-200-year-old-monroe-doctrine

This was discussed at the CELAC summit and follow-up meetings.  We covered this fully at GlobalSouth.com

CELAC takes off like a rocket!

CELAC-EU Summit

Peru has recently made a significant decision regarding the ownership and management of the deepwater Chancay Port Terminal, still under construction, and expected to be inaugurated by Xi Jinping as part of his participation in the Asia-Pacific Economic Cooperation (APEC) Presidential Summit during the last quarter of 2024, as announced by the Peruvian Foreign Minister Javier Gonzalez-Olaechea.

The $3.5 billion port in the resource-rich region may bolster trade between Asia and South America and open new markets for Chinese electric vehicles and other exports. It will also be the first port on South America’s Pacific coast that will be able to receive mega ships because of its nearly 60 feet of depth. All countries in the region consider this port as a ‘window to Asia’. The transit time between Peru and China will be reduced significantly and fresh produce will have a new outlet. The current shipping routes between Peru and China are about 35 days and take too long for most perishable foods to reach markets. The port in Chancay will help cut that time by a third with a significant cost reduction.

Now Peru has refused to allow the Chinese port manager and 60% partner to be the sole proprietor. This move comes in the context of Peru’s growing economic ties with China, which has become one of its major trading partners in recent years. ‘The decision reflects Peru’s concerns about potential overreliance on Chinese investments and the need to protect their national interests‘ which is of course a direct quote from hegemon sources.

We do not have much information on China’s response to the allegations by Peru that China, as the port manager, cannot expect to manage the port by themselves (Uhm .. how then? There is no information about that so I write it down to meddling). In May of this year, the Chinese state-owned company Cosco, at the center of the dispute offered arbitration instead of litigation as a dispute resolution method.  Hong Kong-based Cosco Shipping Ports will defend its legal rights to provide services as the exclusive operator of the deepwater Chancay Port Terminal under “terms that were agreed at the beginning of this investment,” the firm said in a statement.

Peru has also awarded a subsidiary of Chinese firm Jinzhao a contract to build a port in the south of the country, expected to require $405 million in investments. The construction of the port is expected to begin by the end of 2025.  As part of the deal, Jinzhao Peru will receive a concession to operate the port for 30 years. The port will transport bulk goods as well as an iron concentrate and copper and in total, it will reactivate mining projects worth $15 billion, according to Reuters.

Peru, notably, is also among the number of South American nations that have signed up for China’s Belt and Road Initiative infrastructure project.

From the hegemon’s side, Peru is being teamed up with South Korea as an erstwhile alliance – a military alliance – a weapons-supplying alliance.   This is a new strategy and method of empire that I have not seen before, but the countries are now something like cousins and will help one another seemingly. 

A South Korean company will build four ships for the Peruvian Navy under a $463 million contract signed this week.  The vessels are part of Peru’s ambitious program to modernize its naval surface fleet, (thanks to the good idea of the General of Southern Command) which may involve the construction of 23 ships of different types, an effort potentially worth more than $3 billion. The South American country’s primary focus is to acquire six advanced multipurpose guided-missile frigates to replace the six aging frigates that currently serve as the Navy’s main surface combatants.

In addition, South Korea has agreed to export military vehicles to Peru for the first time as part of a deal worth 82.8 billion won ($60 million). Under the agreement, Seoul-based STX Corporation will transfer 30 K808 wheeled armored vehicles to the Peruvian Army by 2025 to support transport and reconnaissance missions. The deal could be expanded to cover an additional 90 armored vehicles, according to the company.

Peru is a good ‘canary’ to watch in terms of hegemonic influence vs Chinese influence and frankly, militarization in the complete region. The port is a boon for the region. The Chancay Megaport, with an initial investment of US$1,315 million and projected to exceed US$3,500 million, stands out as one of the main projects for 2024 in Peru. Bilateral trade between China and Peru has exceeded US$34 billion, positioning Peru as the second most important destination for Chinese investments in South America. In addition, historical ties are highlighted, such as Chinese immigration to Peru, the signing of the Free Trade Agreement in 2009 and numerous joint projects in areas such as education, transportation, health and coastal defense. The investment in the Chancay Megaport symbolizes the strengthening of these strategic and economic relations.  Peru was more in the camp of China so, for now, it is a loss, yet, being in the business in Peru, China must know about the push to speed up copper projects:   https://www.bnamericas.com/en/news/peru-and-chile-urged-to-speed-up-copper-projects.

And as a surprise in the Chinese Foreign Affairs briefing today, was the statement by the Chinese spokesperson. “Beijing Daily: China announced Peruvian President Boluarte’s visit to China. How does China view the current China-Peru relations? Could you share with us the program and China’s expectation of the visit? https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/202406/t20240624_11440626.html

Mao Ning: Peru is an important country in Latin America. Our two countries have a comprehensive strategic partnership. Since establishing diplomatic ties over half a century ago, bilateral relations have grown steadily with fruitful cooperation in various fields, delivering tangible benefits to the two peoples.”

Peru President Dina Boluarte will travel to China later this month to meet with her Chinese counterpart Xi Jinping.  The two leaders are scheduled to meet on June 28.  She is also expected to meet with executives from Cosco Shipping Ports, Chinese telecoms giant Huawei, and electric carmaker BYD.  Boluarte is also scheduled to meet with executives from Jinzhao Mining and with the infrastructure giant China Railway Construction Corporation (CRCC).

Bear in mind that Boluarte is not wanted in Peru by the average Peruvian. There have been numerous attempts to remove her, but she sticks like a nit in hair.  Perhaps China is doing quiet diplomacy to both get Boluarte in their camp, and solve their problems with the port.

Peru was more in the camp of the Chinese so, for now, it is a loss, yet, being in the business in Peru, China must know about the push to speed up copper projects:   https://www.bnamericas.com/en/news/peru-and-chile-urged-to-speed-up-copper-projects.   The think tanks have been busy with Peru for a long time as it is strategically very important for trade right across the Latin American continent.  Brazil is fully on board and keen to use the facility.  https://www.bu.edu/gdp-cn/files/2017/09/Peru.pdf

Peru has also awarded a subsidiary of Chinese firm Jinzhao a contract to build a port in the south of the country, expected to require $405 million in investments. The construction of the port is expected to begin by the end of 2025.  As part of the deal, Jinzhao Peru will receive a concession to operate the port for 30 years. The port will transport bulk goods as well as an iron concentrate and copper and in total, it will reactivate mining projects worth $15 billion, according to Reuters.

Peru, notably, is also among the number of South American nations that have signed up for China’s Belt and Road Initiative infrastructure project. It is clear that the heat is on to grab Peru back for the hegemon, and Brazil is also under extreme pressure with LULA not as updated as he could be. As we see the hegemon pull out and dust off all of the older bugbears (refer to Pelosi’s visit to the Dalai Lama in India https://sovereignista.com/2024/06/20/modis-missteps-in-global-diplomacy/).

For now and for issues of multipolarity, we watch what China does and the results of Boluarte’s visit.  In the meantime, the EU is trying to cut a free trade agreement with Mercosur countries.  This was established years ago by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina, Brazil, Paraguay and Uruguay.  Venezuela is a full member but has been suspended since 1 December 2016.  So in this case an old treaty that has not been successful is being dusted off again.