China’s Maritime Silk Road: The Strategic Expansion of Mega-Ports in Latin America

In a significant shift of regional trade dynamics, China has been steadily expanding its maritime footprint across Latin America through an ambitious network of port investments spanning from Mexico to the southern cone.

These infrastructure projects represent not only a commercial endeavor but also a strategic positioning that is reshaping trade routes and geopolitical relationships throughout the hemisphere.

The Jewel in the Crown: Peru’s Chancay Mega-Port

The most prominent symbol of China’s maritime ambitions in Latin America was unveiled in November 2024 when Chinese President Xi Jinping personally inaugurated the $3.5 billion Chancay Multipurpose Port Terminal in Peru, located 80 kilometers (50 miles) north of Lima. This state-of-the-art deep-water port stands as the first of its kind on South America’s Pacific coast.

“The Chancay mega port aims to turn Peru into a strategic commercial and port hub between South America and Asia,” Peru’s trade minister Juan Mathews Salazar told Reuters.

Part of China’s decade-old ‘Belt and Road’ drive, the new port embodies the challenge facing the United States and Europe as they look to counter Beijing’s rising influence in Latin America.

The port’s impact on regional trade efficiency cannot be overstated.

It will reduce shipping times between China and Peru by 10-12 days (to approximately 23 days) and cut logistics costs by at least 20%, according to reports from China Global Television Network (CGTN).

Moreover, Chancay is the first port in South America with the capacity to host carrier ships too large to fit through the Panama Canal, giving it unparalleled strategic importance.

China’s state-owned shipping giant COSCO holds a 60% stake in the port, which is projected to initially handle one million containers annually.

However, the port’s ambitions extend far beyond Peru’s borders, with plans to establish rail connections to neighboring Brazil, effectively creating a trans-continental network connecting the Pacific and Atlantic trade routes.

Strategic Footholds: The Panama Canal and Beyond

China’s port strategy in Latin America prominently includes key positions around the vital Panama Canal, through which approximately 5% of global maritime trade transits.

Chinese companies have secured strategically significant positions on both sides of this crucial waterway.

“Chinese companies have invested billions in Panama and operate two strategic ports on both sides of the canal: the Port of Colón and the Port of Balboa,” according to regional security analysts.

These operations, managed by Hong Kong-based Hutchison Whampoa, have raised concerns in Washington about potential influence over this critical maritime chokepoint.

Building a Continental Network

China’s port investments extend throughout the continent, creating what amounts to a new Maritime Silk Road across Latin America.

In Brazil, China Merchants Port controls Paranaguá Port—the country’s second-largest port—acquired in 2017 for $935 million.

This strategic position provides ideal access for exporting Brazilian commodities, particularly soybeans and iron ore, to Chinese markets.

In Mexico, Chinese interests have targeted both Manzanillo Port—the country’s most important maritime facility—and Lázaro Cárdenas Port in Michoacán state.

The latter is being developed as part of a special economic zone with an initial investment of $90 million, focusing on metallurgic and steel industries.

Manzanillo has already seen a substantial rise in Chinese imports since 2020, making the Mexico-China trade route one of the fastest-growing in the world.

According to a 2022 study by the Center for a Secure Free Society (SFS), China now has a foothold in approximately 40 ports across Latin America from Peru to Mexico.

This extensive network reflects a coordinated strategy rather than isolated investments.

Economic and Strategic Implications

The scale of China’s investment in the region is impressive.

From 2003 to 2022, Chinese foreign direct investment totaled $187.5 billion in Latin America and the Caribbean, with port and infrastructure projects representing a significant portion of this total.

The economic impact has been transformative.

Since 2000, trade between China and the region has increased 35-fold. China has become the leading destination for exports from Brazil, Chile, Panama, Peru, and Uruguay, and the leading source of imports for multiple countries across the region.

Beyond pure economics, these ports serve several strategic purposes for Beijing:

• Resource Access: The port network guarantees China constant and direct access to natural resources for its growing industrial sector, particularly high-value minerals like copper and lithium that are essential for clean energy technologies.
• Global Positioning: Former U.S. officials acknowledge that projects like the Chancay port “change the game” by platforming “China in a major new way in South America as the gateway to global markets.”
• Regional Influence: These ports are central to China’s expansion strategy to “become the region’s main trading partner and leader over the rest of the world in the financing, construction, and operation of marine terminals.”

Controversies and Concerns

China’s port expansion in Latin America has not been without controversy.

Environmental concerns have been raised about several projects, including the Chancay port, which will reportedly cause “irreversible damage to the Santa Rosa wetlands, a key corridor of biodiversity in the central coast of Peru” and affect artisanal fishing.

On November 19, 2024, China officially opened the Port of Chancay in Peru and this newly built, megaport, funded by China and operated by Cosco, aims to reduce trans-Pacific transit times and logistics costs, and is the first in South America to accommodate super-large container ships

Some regional analysts worry about economic dependence, loss of sovereignty, and national security implications for host countries.

Security experts, including former U.S. Southern Command Chief Laura Richardson, have expressed concern that ports like Chancay could potentially host Chinese navy warships, though China consistently denies any military motivations.

The maritime expansion also comes amid rising U.S.-China trade tensions and concerns about new tariffs from the Trump administration, adding another layer of complexity to an already sensitive geopolitical situation.

A New Maritime Reality

Whether viewed as primarily commercial or strategic, China’s extensive network of ports represents a new reality in Latin America’s maritime landscape.

The region has become an important piece in China’s global Belt and Road Initiative, with potentially lasting implications for trade patterns, resource flows, and political relationships.

As these mega-ports become fully operational in the coming years, their impact will likely extend beyond immediate economic benefits to reshape regional trade dynamics in ways that could permanently alter the hemisphere’s geopolitical orientation.

Featured image generated by an AI system.