China Pursues $10 Billion Investment Package in Peru
On June 1, Chinese Ambassador to Peru Jia Guide unveiled plans for a 2‑year, $10 billion investment package in the country. Announcing the first project, Jia revealed that COSCO Shipping will build and operate a $2 billion port in the Pacific coast city of Chancay, north of the capital, Lima. In addition, Chinalco said on June 4 it would start work on a $1.3 billion expansion of the Toromocho copper mine in central Peru. Wu Jiangqiang, president of local subsidiary Chinalco China Copper, first announced plans to increase investment in April 2017.
In addition, China Railway Engineering Corporation (CREC) announced plans to build a port in Ilo, the capital of Peru’s copper mining region. Interestingly, however, Edgar Patino, Peru’s National Port Authority, said he was unaware of any proposal from CREC and that any port expansion work would be contracted via a public auction. Ilo has been speculated to be the end point of the Trans-Amazonian railway connecting Brazil’s Atlantic coast with Peru’s Pacific coast.
Peru and China grew closer during the term of recently-resigned President Pedro Paulo Kuczynski, who shirked tradition by making his first major international trip to China, rather than the United States. Departing for Beijing, he told journalists that attracting investment was the express purpose of his visit. He also warned that Washington’s pull-out from the TPP trade agreement may lead Peru and other countries to pursue a replacement agreement that may involve China and Russia. While it is still very early in the tenure of Kuczynski’s successor Martin Vizcarra, the announcement of the investment package indicates that the core dynamics of the bilateral relationship remain on the same track.