Peru is China’s second-largest investment destination in Latin America, and last year about 36 percent of Peru’s goods exports were to China; This cemented China’s position as Peru’s largest trading partner and further deepened trade and investment relations. between two countries.

In 2008, Peru and China signed a strategic partnership agreement with the aim of not only increasing bilateral trade, but also deepening cooperation and harmonizing trade policies in areas such as international relations, including cooperation in global forums.

In 2009, Peru became the second country in Latin America (after Chile) to sign a free trade agreement with China, and the agreement came into force in 2010. And in 2013, the two countries signed a comprehensive strategic partnership agreement, improving bilateral relations. a higher level.

In September 2016, then-Peruvian President Pedro Pablo Kuczynski visited China on his first foreign trip, demonstrating the increasing importance of China-Peruvian relations for Lima. Former president Pedro Castillo, who replaced Kuczynski, visited the Chinese embassy a week before taking office in July 2021.

Additionally, incumbent Peruvian President Dina Ercilia Boluarte Zegarra met with Chinese President Xi Jinping at the APEC Leaders Meeting held in San Francisco, California last year, and went to China with a large delegation of ministers and businessmen in June this year. had made a visit. The two sides signed various agreements.

Nearly 200 Chinese companies have invested about $30 billion in Peru, according to figures given by Chinese Ambassador to Peru Song Yang in an interview in September. However, according to a study published by the American Enterprise Institute in July, between 2005 and June 2024, China invested approximately $31.8 billion in Peru.

More importantly, President Xi will attend the APEC Leaders Meeting in Lima and also pay an official visit to Peru from Thursday to Sunday.

Since Peru joined the Belt and Road Initiative in 2019, Chinese investments in Peru’s infrastructure sector have increased significantly. In particular, China is building a port at Chancay, about 55 kilometers north of Lima, that will be the most modern port on Latin America’s South Pacific coast. The port, 60 percent owned by China’s COSCO Shipping Corporation, will cost more than $3 billion and will be a gateway from Asia to Peru as well as an exchange and distribution center for South America.

Peru’s geographical location at the center of South America’s Pacific coast makes it the gateway to Latin American markets for Asian economies and the port of exit to Asia for Latin American countries.

Peru currently exports more than half of its goods to Asia, with more than 97 percent of them transported by ocean liners. There are no direct sea connections to Asian markets from Peru or any South American country. However, thanks to the Chancay port, South American countries will now have a direct sea route to Asia.

Other major Chinese investments by Chinese companies in Peru in recent years have been made by China Three Gorges Project Corporation and China Southern Power Grid International, which separately acquired two companies that produce and supply electricity to Lima. In 2019, China Yangtze Power International, a subsidiary of China Three Gorges Project Corporation, acquired Sempra Energy International for $3.59 billion, and in 2023, China Southern Power Grid International acquired Enel for $2.9 billion. paid billion dollars. Chinese companies have also acquired other Peruvian power companies.

Additionally, Peru became a member of the Asian Infrastructure Investment Bank and contributed $154.6 million to the bank’s fund (the largest amount made by a Latin American country). Only five Latin American countries contributed to the AIIB’s funding: Argentina, Brazil, Chile, Ecuador and Uruguay. In fact, Peru’s contribution to the AIIB fund accounts for 84 percent of the total of Latin American countries.

China is also investing in talent training for 5G technology; Chinese telecom giant Huawei is establishing laboratories and research centers at universities such as the National University of San Marcos and the National University of Engineering, two of Peru’s largest and most prestigious universities.

Peru’s railways and highways are other potential investment areas for Chinese companies. Every country needs to build modern infrastructure to enhance its economic development. Latin American countries need to improve their infrastructure to achieve higher growth; They can achieve this through the framework of the Belt and Road Initiative.

The author is an economist and director of the Center for Asian Studies at Peru’s National University of San Marcos. The views do not necessarily represent those of China Daily.

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