{"id":9203,"date":"2022-09-09T16:41:33","date_gmt":"2022-09-09T16:41:33","guid":{"rendered":"https:\/\/asia-ibs.com\/v2\/chancay-the-strategic-megaport-for-trade-with-asia-that-china-is-building-in-peru-and-the-impact-it-is-already-having\/"},"modified":"2022-09-09T16:41:33","modified_gmt":"2022-09-09T16:41:33","slug":"chancay-the-strategic-megaport-for-trade-with-asia-that-china-is-building-in-peru-and-the-impact-it-is-already-having","status":"publish","type":"post","link":"https:\/\/asia-ibs.com\/en\/chancay-the-strategic-megaport-for-trade-with-asia-that-china-is-building-in-peru-and-the-impact-it-is-already-having\/","title":{"rendered":"Chancay, the Strategic Megaport for Trade With Asia That China Is Building in Peru (and the Impact It Is Already Having)"},"content":{"rendered":"\n

Not long ago, Chancay was a quiet fishing and farming enclave on Peru’s central coast, frequented by tourists and by the seabirds that migrate seasonally to and from Canada and the United States.<\/strong><\/p>\n\n\n\n

Strolling through its streets along the Pacific under the persistent mist typical of the southern winter in this part of Peru, nothing suggested that this town of 63,400 inhabitants will, in a few years, be home to a megaport that will radically change its appearance and turn it into a key link in trade between Latin America and China.<\/p>\n\n\n\n

Today, locals chat as they always have beside what were once two wooden piers, and from the ceviche restaurants along the promenade they shout to convince visitors that their menu is the best. But since the end of last year, an intermittent, violent noise has been interrupting the routine of Chancay’s residents: the explosions with which workers flatten the ground where a hill once stood, of which almost nothing remains.<\/p>\n\n\n\n

Cosco Shipping Ports, one of the corporate giants of the Chinese state, is building here, 80 kilometers north of Lima, the Chancay Multipurpose Port Terminal, a colossal piece of infrastructure that will mark a new milestone in China’s presence and influence in Peru and across Latin America.<\/p>\n\n\n\n

The megaport will be one of the preferred departure points for the raw materials the region exports to China, such as copper and other minerals that Peru produces in abundance, and given its size and volume of operations it is set to become a nerve center of international trade.<\/p>\n\n\n\n

“The dimensions are so remarkable that everything indicates Chancay will become a critical point for shipments to China and to all of Asia,” Margaret Myers, an expert on Asia and Latin America at The Dialogue, a U.S. think tank, told BBC Mundo.<\/p>\n\n\n\n

It is an enormous investment, US$3.6 billion according to official projections, and a complex engineering project already under way with which the Peruvian government hopes to attract around 50% of the roughly US$580 billion in trade that moves between China and South America each year<\/strong>.<\/p>\n\n\n\n

Such an ambitious project is, however, shrouded in controversy. Its promoters, mainly the Chinese and Peruvian governments, insist it will boost the area’s development, employment and trade, but its critics warn of its social impact and denounce environmental damage.<\/p>\n\n\n\n

\"Mapa<\/figure><\/div>\n\n\n\n

A macro-project ever since China arrived<\/h2>\n\n\n\n

The idea of building a complementary port to relieve congestion at El Callao, the main point of arrival for goods entering Peru, had been on the table for some time. But it was the arrival of Chinese capital that finally got it off the ground in Chancay.<\/p>\n\n\n\n

Everything took on another dimension with Cosco Shipping’s entry into the project. The Chancay terminal will have the capacity to berth the world’s largest cargo ships, those that can carry more than 18,000 containers. It will initially have four berthing points, but that number could later grow to fifteen, and the kilometers-long breakwaters where the freighters will dock are already visible.<\/p>\n\n\n\n

To build the port, one of the hills that shape the cliff landscape typical of this stretch of Peru’s central coast was demolished, and to connect it with the nearby Pan-American Highway a 1.8-kilometer tunnel is being excavated beneath the town center of Chancay, with three lanes for vehicle traffic, two conveyor belts for the transport of solid bulk cargo and pipelines for liquids.<\/p>\n\n\n\n

There will also be large container storage areas, parking for heavy vehicles, offices and customs facilities.<\/p>\n\n\n\n

\"Obras
Caption: A large tunnel under Chancay connects the port with the Pan-American Highway.<\/figcaption><\/figure><\/div>\n\n\n\n

According to Peru’s Ministry of Transport and Communications, Chancay will become a regional “hub” linking neighboring Chile, Ecuador and Colombia<\/strong>. And China’s ambassador to Peru, Liang Yu, predicted that it “will greatly foster development across the whole country because it will have the capacity to export goods to the world.”<\/p>\n\n\n\n

The vast project has been enrolled in the so-called New Silk Road<\/a>, officially the Belt and Road Initiative, a massive investment plan to build large infrastructure projects around the world launched by Chinese President Xi Jinping in 2013.<\/p>\n\n\n\n

“For a long time, Peru has been a very important partner for China and its involvement has been welcomed in Peru, so the country has become very attractive for Chinese investment,” says the expert Myers.<\/p>\n\n\n\n

Myers explains that “China has for years pursued an outward-looking strategy that pushes its companies to go out in search of natural resources and export markets for its products, and Peru has been important because it is a critical supplier of minerals, above all copper, which is in high demand in China.”<\/p>\n\n\n\n

Proof of that special relationship is that China has become the Andean country’s main trading partner, ahead of the United States, and the future port of Chancay is set to strengthen it.<\/p>\n\n\n\n

\"Vista
Caption: The Chancay megaport will completely alter the look of the area.<\/figcaption><\/figure><\/div>\n\n\n\n

Juan Barranzuela, until a few weeks ago Peru’s Minister of Transport, told BBC Mundo before leaving office that the Chancay project gives his country an “international strategic position that even outpaces countries like Chile, which had held the lead in trade with the Asia-Pacific.”<\/p>\n\n\n\n

According to him, the megaport will act as “a trigger for the national economy and will give Peru a special place on the international stage.”<\/p>\n\n\n\n

The supposed competitive advantage over neighboring Chile is an argument repeated by the government, which firmly backs the project, as made clear by President Pedro<\/strong> Castillo<\/strong>‘s visit to the construction site in March.<\/p>\n\n\n\n

According to estimates from the Chinese embassy in Peru, the port’s construction is generating 1,300 direct jobs, to which another 5,000 direct and indirect jobs would be added once it begins operating.<\/p>\n\n\n\n

But not everyone is convinced the project is a good deal for Peru<\/strong>, a country where the activity of foreign companies stirs considerable controversy and has long been at the center of public debate.<\/p>\n\n\n\n

In 2018, a group of civil society organizations filed a challenge against the Environmental Impact Study carried out by Cosco Shipping.<\/p>\n\n\n\n

They hired German marine biologist Stefan Austerm\u00fchle, who produced a report alleging that the port’s construction would cause irreparable damage to the Santa Rosa wetland, a 77-hectare site adjacent to the land where the port is being built, home to a sanctuary of nearly a hundred bird species now affected by the blasting and the bustle of trucks and heavy machinery.<\/p>\n\n\n\n

\"Dos
Caption: The port is being built next to a wetland frequented by migratory birds.<\/figcaption><\/figure><\/div>\n\n\n\n

Austerm\u00fchle’s report pointed to other effects the company had not disclosed in its initial study, such as coastal erosion caused by the immense earth movements and the impact on marine fauna of the heavy traffic of deep-draft vessels the port will bring.<\/p>\n\n\n\n

Austerm\u00fchle told BBC Mundo that the “study submitted by the company used inadequate methodologies to hide and minimize the impacts, taking advantage of the Peruvian authorities’ lack of knowledge.”<\/p>\n\n\n\n

After receiving Austerm\u00fchle’s report, Peru’s National Service for Environmental Certification for Sustainable Investments (Senace) asked the company to make modifications to its Environmental Impact Study, and some aspects of the project ended up being changed. Among other things, enormous tubes were installed that today stretch across Chancay’s beach from one side to the other.<\/p>\n\n\n\n

\"Playa
Caption: Enormous tubes were installed to hold back rising waters, but some experts question the measure’s effectiveness.<\/figcaption><\/figure><\/div>\n\n\n\n

Austerm\u00fchle explains that “they are geotubes used to contain rising waters,” but insists that “it is a technology that has already failed in many other places and does not solve the problem of coastal erosion.” One more problem for an area that was among those affected last January by the oil spill from a refinery owned by the Spanish company Repsol.<\/p>\n\n\n\n

The Chinese embassy in Peru responded in writing to a request for comment from BBC Mundo and stated that “the evaluation process for the environmental impact study has complied with all Peruvian laws and regulations” and with “the highest international standards.”<\/p>\n\n\n\n

The Chinese mission indicated that “Austerm\u00fchle’s opinions were received and answered technically” and were ultimately “dismissed by Senace.” It also argued that the Environmental Impact Study that was finally approved includes the Santa Rosa wetland in the project’s Indirect Influence Area, meaning specific actions are established to protect it.<\/p>\n\n\n\n

Cracks<\/h2>\n\n\n\n

Damage to the environment is not the only cause for complaint.<\/p>\n\n\n\n

M\u00edriam Arce, president of the Association for the Defense of Housing and the Environment of the port of Chancay, a neighborhood group demanding the port’s relocation, says that “many residents have watched cracks appear in their homes, and there are entire neighborhoods that have to be evacuated daily because of the blasting.”<\/p>\n\n\n\n

“We are suffering psychological harm. Nobody knows what it is like to live all day with the shock of the explosions,” says Arce, who went so far as to raise the issue with President Castillo in Yauyos, at one of the Councils of Ministers the president often holds in public venues far from Lima.<\/p>\n\n\n\n

Castillo listened to her and urged her to contact the Minister of Transport and Communications, but Arce says all her attempts to do so were in vain.<\/p>\n\n\n\n

Then-minister Barranzuela acknowledged in his conversation with BBC Mundo that “the demolitions and the earth movements are causing soil instability and the collapse of some homes.”<\/p>\n\n\n\n

\"Pedro
Caption: President Castillo backed the port with a visit to the construction site last March.<\/figcaption><\/figure><\/div>\n\n\n\n

Barranzuela had planned to meet with representatives of the Chinese embassy and the construction company at the end of August to address the problems reported by residents, but he was dismissed by Castillo before he could do so.<\/p>\n\n\n\n

He is one of the 68 ministers that, according to a tally by the Bloomberg news agency, the president has replaced in his little more than a year in office.<\/p>\n\n\n\n

His successor, Geiner Alvarado, has so far not taken up the matter. The Ministry of Transport told BBC Mundo that the minister would not comment on the port of Chancay until his situation is clarified after being implicated in the alleged corruption case involving the awarding of public works contracts, for which the Prosecutor’s Office is investigating Castillo and several members of his family, and which has landed his sister-in-law in jail.<\/p>\n\n\n\n

Alvarado has had to testify before the Prosecutor’s Office, and Congress has begun a process that could end in his removal.<\/p>\n\n\n\n

\"Barcos
Caption: Some in Chancay lament that the port’s arrival has put an end to the artisanal fishing customary in the area.<\/figcaption><\/figure><\/div>\n\n\n\n

Meanwhile, in Chancay, residents live alongside the port works, which occupy a large part of the town center.<\/p>\n\n\n\n

From the part of the cliff the explosions have not flattened, William Jurado, Chancay-born, points to the fishing boats anchored off the beach. “We used to live peacefully here on fishing and tourism, but all of that is over now.”<\/p>\n\n\n\n

His great concern is that the port will end up expanding and devouring the wetland where he likes to stroll, watching the gulls, swallows, plovers, coots and ducks that flutter about in it.<\/p>\n\n\n\n

“I feel great indignation,” he says.<\/p>\n\n\n\n

But not everyone here seems to share his sorrow, and in recent times new residents have arrived in Chancay drawn by the expectations of growth and opportunity around the port.<\/p>\n\n\n\n

“There are already people who have started to occupy wetland plots because they plan to sell them in the future,” says Davila.<\/p>\n\n\n\n

On the way out of the small city, a sign marks the sign of the times.<\/p>\n\n\n\n

“I buy land next to the megaport.”<\/p>\n","protected":false},"excerpt":{"rendered":"

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