China has big plans to increase its global presence – far beyond just investing in upcoming megaprojects – to control sectors including mining, energy and port infrastructure. One key area it wants to target is in South America, having already begun its economic and geopolitical expansion in Africa, including Nigeria and Egypt.
China has chosen its next prey despite it being some 10,700 miles away from Beijing. With its access to essential natural resources, the western country of Peru has become a key target. An expert has warned China has already “dangerously” increased its influence in the Peruvian economy.
Juan Belikow, professor of International Relations at the University of Buenos Aires, Argentina, to Diálogo said: “China is quietly expanding its influence in strategic sectors, which although tend to go unnoticed, are increasingly relevant on the geopolitical chessboard.
“One example is control of supply chains, now considered the sixth domain of warfare.”
A key part of China’s strategy is to dominate trade routes, ports and logistical hubs in Peru, he explained. It plans to secure its presence in critical infrastructure, also including energy networks, as well as key technologies for global logistics.
This will have a “significant influence on sectors essential for world stability,” Belikow added.
One key area of interest is Peru’s Port of Corío, in Arequipa, which is set to become a key axis for global trade. Plans for the project, promoted by the Regional Government of Arequipa, are already underway, with an investment of nearly £5.5 billion.
With a capacity of up to 100 million tons of cargo each year, it is set to have a depth of around 92 feet – meaning it will be able to receive larger ships than Chancery, which lies 37 miles north of the capital, Lima, and opened last year. According to Perú Construye, several Chinese companies have expressed interest in its development.
“By tying this project to the Belt and Road Initiative, where China has prioritized investments in strategic infrastructure, the outlook becomes more worrisome,” added Belikow.
“This control would not only allow it to manage the flow of goods in Peru, but also to influence global trade, with the capacity to disrupt key routes in the event of conflict.
“China’s dumping, subsidizing its companies while its competitors face unequal conditions, not only reinforces its commercial expansion, but also shapes a geo-economic war. What’s worrisome is that many still do not perceive this strategy,” the professor warned.
China has “dangerously” increased its influence in the Peruvian economy. It is a major investor in Peru’s mining sector, with Chinese firms controlling roughly 30% of the total mining investment portfolio, according to Boston University. One of the most important is Pampa de Pongo, an iron reserve also in Arequipa, developed by Zhongrong Xinda Group.
China also now controls more than half of electricity distribution assets across Peru.
Belikow said: “This economic colonialism, which many have become aware of too late, also has a profound impact on the automotive industry in the Andean region. Currently, 80% of the Peruvian vehicle fleet is of Chinese origin, and the same is true of buses.
“The Chinese presence in this sector is undeniable and reflects a strategy of economic occupation.”
In many cases, the agreements made between China and Peru are finalised “through corruption and spurious contracts”, making the latter even more vulnerable.
