A developed Chancay Port in Peru will enable better utilization of the new reconfiguration of global trade.
Jhon Valdiglesias, a researcher at the Center for Asian Studies of the National University of San Marcos, recently commented that the upcoming commencement of operations at the Chancay Port will allow Peru to integrate into major global value chains, enabling the country to better capitalize on the new reconfiguration of global trade resulting from the trade war between the United States and China.
“Having the Chancay Port will open up more opportunities for us to integrate into global value chains, thereby ensuring better utilization of the free trade agreements that Peru has signed,” he told Agencia Andina.
He highlighted that this new port terminal would promote the creation of industrial and technological cities and new infrastructure, such as access roads, enabling the production of goods or parts of final products traded globally.
For example, in the case of reduced exports from China to the United States (as a result of the trade war), Valdiglesias mentioned that the economies that are well integrated into global value chains and export manufactured products will replace these shipments.
The economist will speak this Thursday on the panel “Trade and Investment for Inclusive and Interconnected Growth” as part of the preparatory meetings for the Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit.
Exporting Manufactures
“With global value chains, it is easier to export manufactured products because there is no need for the final product, only one of the inputs. This is a great opportunity for less developed countries to take advantage of,” he emphasized.
He mentioned that the countries most benefited from this new reconfiguration of global trade have been primarily Mexico, Vietnam, and Taiwan due to their strong integration into global value chains.
“In the specific case of Mexico, one of its great advantages is its location, as it is close to the United States, which has facilitated the flow of many American investments into that country,” he explained.
Additionally, they receive investments from Asian countries to construct plants to sell to the United States, taking advantage of their proximity.
More Opportunities
He commented that Peru must be more aware of this new reality to capitalize on it better. “So far, very little has been achieved because Peru is primarily a raw material exporting country,” he noted.
In this regard, he reiterated that countries like Mexico, Vietnam, Taiwan, and Canada are better integrated into global value chains, which opens up more opportunities to take advantage of the new international trade scenario.
“If a country is part of the global value chain, it exports a high-value-added input or a technology-intensive product to produce a final product,” he explained.
Technology Transfer
He emphasized that being part of the Asia-Pacific Economic Cooperation (APEC) allows us to continue advancing by incorporating best practices for manufacturing development.
“Being in APEC allows us to continue expanding research and keep the debate going to advance the economy as a whole,” he said.
“Technology is the only way to advance in international trade and economic growth. While it is important to encourage foreign investment, it is also crucial to promote the transfer of new technologies,” he stressed.
In this regard, he mentioned China’s experience, a country that negotiated with international companies that wanted to establish themselves in its Special Economic Zones and ensured technology transfer.
“Without technology, there are no global value chains, and there is no sustained high growth to overcome the issues we know, such as poverty, inequality, insecurity, among others,” he emphasized.
Chinese role in the development of the Chancay Port
China has played a pivotal role in developing the Chancay Port. This critical infrastructure project marks a significant step in Peru’s efforts to become a major player in global trade. The port, located just north of Lima, is a joint venture between the Chinese state-owned company COSCO Shipping and the Peruvian company Volcan Compañía Minera. China’s involvement is financial and strategic, as the port is part of China’s broader Belt and Road Initiative (BRI), which seeks to enhance global connectivity through infrastructure investments. By investing in the Chancay Port, China is establishing a crucial logistics hub on the Pacific coast of South America, facilitating trade between Asia and Latin America. This investment aligns with China’s goals of expanding its regional influence and securing industry supply chains. For Peru, the partnership with China offers access to significant capital, advanced technology, and expertise in large-scale port operations. The development of the Chancay Port under China’s guidance is expected to transform Peru into a critical node in global value chains, boosting its export capacity and economic growth while strengthening bilateral relations between the two nations.
The development of the Chancay Port represents a critical milestone in Peru’s economic evolution, serving as a gateway for the country to fully integrate into global value chains and diversify its economic activities beyond raw material exports. By facilitating the production and export of higher value-added goods, the port will enable Peru to tap into new opportunities within the reconfigured global trade landscape, particularly in the wake of shifting dynamics between significant economies like the United States and China. Moreover, this project will enhance Peru’s competitiveness and attract foreign investment, promote technological advancement, and catalyze the growth of industrial and technological hubs across the country. In essence, the Chancay Port is poised to be a pivotal infrastructure asset that will drive inclusive and sustainable economic growth, helping Peru to achieve a more prominent role in the international market while addressing domestic challenges such as poverty, inequality, and economic security.