The Debate | Opinion | East Asia

Peru and the Limits of Alarmism About Chinese Investment

Legal, political, and sovereign constraints make the militarization of the Chinese-operated Port of Chancay far less plausible than critics suggest.

When Peru inaugurated the Port of Chancay in 2024, it did so with the intent of transforming the country into a gateway between South America and Asia. However, like most Chinese overseas port investments, this project has increasingly been interpreted through a different lens: not as infrastructure for trade, but as potential infrastructure for war. Lima’s political instability, coupled with endemic corruption, exacerbate this view as analysts contend that these dynamics could enable China to militarily leverage Chancay against the United States in a future conflict. 

Such warnings should be taken seriously, but they also merit careful scrutiny. Framing Chinese-built infrastructure as latent military expansion risks conflating commercial engagement with strategic subversion. That underestimates both Peruvian sovereignty and the complexities of strategic competition. Legal, political, and sovereign constraints all make a militarized outcome far less plausible than critics suggest.

Chancay is, first and foremost, a commercial port. The port’s construction was financed primarily through a joint COSCO-Volcan equity investment and a syndicated loan of about $975 million from a group of Chinese commercial banks led by Bank of China. Its construction was led by China Harbor Engineering Company, a subsidiary of China Communications Construction Company, with support from China Railway Engineering Corporation. It is operated by COSCO Shipping Ports Chancay Peru S.A., a joint venture in which COSCO holds 60 percent and Peruvian mining company Volcan Compañía Minera holds 40 percent. 

The project aims to reduce shipping times across the Pacific, expand Peru’s export capacity, and deepen its integration into global supply chains. These goals appear increasingly attainable. In just its first 10 months of operations, January to October 2025, the port handled foreign trade operations worth about $1.88 billion and generated roughly $234 million in customs revenues. That indicates significant early progress toward the projected annual economic impact of  $4.5 billion. 

The Port of Chancay exemplifies a broader trend across Latin America, where governments are pursuing infrastructure financing to overcome development bottlenecks and strengthen connectivity with Asian markets. This need is especially pressing in a region where chronic underinvestment in infrastructure continues to drive up transportation and shipping costs

Major ports are inherently “dual-use” in a narrow technical sense, given that deep-water facilities can accommodate large naval vessels as well as commercial ships. However, this physical capability does not automatically translate into military intent or operational readiness. If we extend that logic, a substantial portion of global maritime infrastructure – including facilities in Europe, Southeast Asia, and the Middle East – would be construed as latent military outposts. 

The more important question is legal and political, not infrastructural. Commercial ports operate under the jurisdiction of the host state. Customs enforcement, maritime security, and access permissions remain sovereign rights, regardless of what entity operates the port – including foreign state-owned enterprises like COSCO. As a result, formal military basing or military activities, whether in peace time or wartime, requires explicit agreements, status-of-forces arrangements, defense treaties, and negotiated frameworks that define rights and obligations. Absent such arrangements, speculation about wartime repurposing remains, at best, hypothetical.

Therefore, to assume that China could unilaterally transform the Port of Chancay into a naval hub in a crisis or conflict is to sidestep Peru’s agency. Peru is not a geopolitical vacuum. Despite well-documented political instability, resulting in multiple presidential transitions over the past decade, the country’s institutional architecture remains intact. Congress legislates, courts adjudicate, regulatory bodies function, and the armed forces remain under civilian oversight. 

Infrastructure contracts and port governance are embedded in bureaucratic processes that extend beyond the tenure of any individual administration. Consequently, while political instability complicates governance, it does not nullify sovereignty. 

This reality is evident in the recent court ruling regarding the supervision of the port. Although a recent Peruvian court ruling limited the national transport infrastructure regulator’s (Ositrán) regulatory authority over the Port of Chancay, it does not compromise Peru’s sovereignty. The port continues to operate under Peruvian law and jurisdiction and is monitored and regulated by key national authorities, including the Nacional Port Authority (APN), customs (Sunat), maritime authorities (Dicapi), and environmental regulators. All of these Peruvian agencies maintain a permanent presence in the port, and retain the ability to enforce compliance and safeguard national interests. 

In essence, the court’s decision simply reflects a legal interpretation of the port’s private financing, which was the principal legal question decided in the case, rather than any transfer of control to foreign entities. Accordingly, the state maintains ultimate authority over the port’s operations and territory, ensuring that Peruvian sovereignty is fully upheld.

The argument that China’s economic presence inevitably translates into strategic control reflects a broader zero-sum framing that has long shaped debates over Beijing’s overseas infrastructure activities. Similar concerns have been raised regarding ports operated by Chinese companies in Africa, South Asia, and Europe. Yet there is no empirical evidence that Beijing has sought to militarize these ports. 

Moreover, even if such an objective were central to China’s motives for investment, it could not be pursued unilaterally; host-nation consent is required, something Lima is unlikely to grant despite growing economic ties. 

This is not to dismiss legitimate security considerations. China’s global infrastructure footprint, often linked to the Belt and Road Initiative, carries strategic implications. Ports, digital networks, and energy corridors can influence patterns of interdependence and influence over time. Policymakers and analysts are justified in examining governance structures, contract transparency, and regulatory safeguards. However, it is crucial to distinguish careful scrutiny from presumption.

Debates about Chinese investment in the Global South regularly oscillate between alarmism and complacency. A more nuanced assessment recognizes the agency of host countries. Latin American governments are not passive actors in strategic competition. They pursue diversified partnerships to meet development needs while maintaining diplomatic flexibility. Peru engages China economically while preserving longstanding ties with the United States and participating in hemispheric institutions shaped by Washington. This diversification reflects strategic hedging, not geopolitical capitulation. 

Framing Chinese overseas port investments, such as the Port of Chancay, primarily as potential wartime assets risks overshadowing the domestic logic driving these projects. Peru faces several challenges including infrastructure deficits, logistical bottlenecks, and the desire of remaining competitive in global commodity markets. From this perspective, it is clear that enhancing port capacity is an economic imperative. For many policymakers in Lima, the calculus is developmental rather than ideological.

There is also a broader strategic consideration. If Washington’s approach to Latin America is perceived as primarily cautionary – warning partners about the risks of Chinese engagement without offering viable alternatives – it may inadvertently reinforce the appeal of diversified partnerships. Strategic competition requires more than critique; it requires credible economic engagement, infrastructure investment, and sustained diplomatic presence. 

None of this precludes vigilance. Peru should ensure transparent oversight of Chancay’s operations, clarify legal constraints on foreign military access, and strengthen regulatory mechanisms that safeguard national security. Clear legal firewalls between commercial management and sovereign authority are essential. 

Strategic competition is intensifying, and infrastructure will remain part of that landscape. That said, not every port is a pre-positioned base, and not every investment is a strategic encirclement. Over-securitizing commercial engagement risks narrowing policy options and obscuring opportunities for cooperative stability. 

The central issue is not whether the Port of Chancay could hypothetically serve military purposes under extraordinary circumstances. Almost any major port could. The more consequential question is whether current political, legal, and strategic conditions make such an outcome plausible. At present, the evidence suggests that Peru retains both the institutional capacity and the sovereign authority to determine how its infrastructure is used. 

Peru is navigating a complex geopolitical environment, balancing development needs with national autonomy in an increasingly multipolar world. Recognizing that agency, rather than assuming its erosion, offers a more grounded starting point for assessing both the risks and the realities of China’s presence in Latin America.

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When Peru inaugurated the Port of Chancay in 2024, it did so with the intent of transforming the country into a gateway between South America and Asia. However, like most Chinese overseas port investments, this project has increasingly been interpreted through a different lens: not as infrastructure for trade, but as potential infrastructure for war. Lima’s political instability, coupled with endemic corruption, exacerbate this view as analysts contend that these dynamics could enable China to militarily leverage Chancay against the United States in a future conflict. 

Such warnings should be taken seriously, but they also merit careful scrutiny. Framing Chinese-built infrastructure as latent military expansion risks conflating commercial engagement with strategic subversion. That underestimates both Peruvian sovereignty and the complexities of strategic competition. Legal, political, and sovereign constraints all make a militarized outcome far less plausible than critics suggest.

Chancay is, first and foremost, a commercial port. The port’s construction was financed primarily through a joint COSCO-Volcan equity investment and a syndicated loan of about $975 million from a group of Chinese commercial banks led by Bank of China. Its construction was led by China Harbor Engineering Company, a subsidiary of China Communications Construction Company, with support from China Railway Engineering Corporation. It is operated by COSCO Shipping Ports Chancay Peru S.A., a joint venture in which COSCO holds 60 percent and Peruvian mining company Volcan Compañía Minera holds 40 percent. 

The project aims to reduce shipping times across the Pacific, expand Peru’s export capacity, and deepen its integration into global supply chains. These goals appear increasingly attainable. In just its first 10 months of operations, January to October 2025, the port handled foreign trade operations worth about $1.88 billion and generated roughly $234 million in customs revenues. That indicates significant early progress toward the projected annual economic impact of  $4.5 billion. 

The Port of Chancay exemplifies a broader trend across Latin America, where governments are pursuing infrastructure financing to overcome development bottlenecks and strengthen connectivity with Asian markets. This need is especially pressing in a region where chronic underinvestment in infrastructure continues to drive up transportation and shipping costs

Major ports are inherently “dual-use” in a narrow technical sense, given that deep-water facilities can accommodate large naval vessels as well as commercial ships. However, this physical capability does not automatically translate into military intent or operational readiness. If we extend that logic, a substantial portion of global maritime infrastructure – including facilities in Europe, Southeast Asia, and the Middle East – would be construed as latent military outposts. 

The more important question is legal and political, not infrastructural. Commercial ports operate under the jurisdiction of the host state. Customs enforcement, maritime security, and access permissions remain sovereign rights, regardless of what entity operates the port – including foreign state-owned enterprises like COSCO. As a result, formal military basing or military activities, whether in peace time or wartime, requires explicit agreements, status-of-forces arrangements, defense treaties, and negotiated frameworks that define rights and obligations. Absent such arrangements, speculation about wartime repurposing remains, at best, hypothetical.

Therefore, to assume that China could unilaterally transform the Port of Chancay into a naval hub in a crisis or conflict is to sidestep Peru’s agency. Peru is not a geopolitical vacuum. Despite well-documented political instability, resulting in multiple presidential transitions over the past decade, the country’s institutional architecture remains intact. Congress legislates, courts adjudicate, regulatory bodies function, and the armed forces remain under civilian oversight. 

Infrastructure contracts and port governance are embedded in bureaucratic processes that extend beyond the tenure of any individual administration. Consequently, while political instability complicates governance, it does not nullify sovereignty. 

This reality is evident in the recent court ruling regarding the supervision of the port. Although a recent Peruvian court ruling limited the national transport infrastructure regulator’s (Ositrán) regulatory authority over the Port of Chancay, it does not compromise Peru’s sovereignty. The port continues to operate under Peruvian law and jurisdiction and is monitored and regulated by key national authorities, including the Nacional Port Authority (APN), customs (Sunat), maritime authorities (Dicapi), and environmental regulators. All of these Peruvian agencies maintain a permanent presence in the port, and retain the ability to enforce compliance and safeguard national interests. 

In essence, the court’s decision simply reflects a legal interpretation of the port’s private financing, which was the principal legal question decided in the case, rather than any transfer of control to foreign entities. Accordingly, the state maintains ultimate authority over the port’s operations and territory, ensuring that Peruvian sovereignty is fully upheld.

The argument that China’s economic presence inevitably translates into strategic control reflects a broader zero-sum framing that has long shaped debates over Beijing’s overseas infrastructure activities. Similar concerns have been raised regarding ports operated by Chinese companies in Africa, South Asia, and Europe. Yet there is no empirical evidence that Beijing has sought to militarize these ports. 

Moreover, even if such an objective were central to China’s motives for investment, it could not be pursued unilaterally; host-nation consent is required, something Lima is unlikely to grant despite growing economic ties. 

This is not to dismiss legitimate security considerations. China’s global infrastructure footprint, often linked to the Belt and Road Initiative, carries strategic implications. Ports, digital networks, and energy corridors can influence patterns of interdependence and influence over time. Policymakers and analysts are justified in examining governance structures, contract transparency, and regulatory safeguards. However, it is crucial to distinguish careful scrutiny from presumption.

Debates about Chinese investment in the Global South regularly oscillate between alarmism and complacency. A more nuanced assessment recognizes the agency of host countries. Latin American governments are not passive actors in strategic competition. They pursue diversified partnerships to meet development needs while maintaining diplomatic flexibility. Peru engages China economically while preserving longstanding ties with the United States and participating in hemispheric institutions shaped by Washington. This diversification reflects strategic hedging, not geopolitical capitulation. 

Framing Chinese overseas port investments, such as the Port of Chancay, primarily as potential wartime assets risks overshadowing the domestic logic driving these projects. Peru faces several challenges including infrastructure deficits, logistical bottlenecks, and the desire of remaining competitive in global commodity markets. From this perspective, it is clear that enhancing port capacity is an economic imperative. For many policymakers in Lima, the calculus is developmental rather than ideological.

There is also a broader strategic consideration. If Washington’s approach to Latin America is perceived as primarily cautionary – warning partners about the risks of Chinese engagement without offering viable alternatives – it may inadvertently reinforce the appeal of diversified partnerships. Strategic competition requires more than critique; it requires credible economic engagement, infrastructure investment, and sustained diplomatic presence. 

None of this precludes vigilance. Peru should ensure transparent oversight of Chancay’s operations, clarify legal constraints on foreign military access, and strengthen regulatory mechanisms that safeguard national security. Clear legal firewalls between commercial management and sovereign authority are essential. 

Strategic competition is intensifying, and infrastructure will remain part of that landscape. That said, not every port is a pre-positioned base, and not every investment is a strategic encirclement. Over-securitizing commercial engagement risks narrowing policy options and obscuring opportunities for cooperative stability. 

The central issue is not whether the Port of Chancay could hypothetically serve military purposes under extraordinary circumstances. Almost any major port could. The more consequential question is whether current political, legal, and strategic conditions make such an outcome plausible. At present, the evidence suggests that Peru retains both the institutional capacity and the sovereign authority to determine how its infrastructure is used. 

Peru is navigating a complex geopolitical environment, balancing development needs with national autonomy in an increasingly multipolar world. Recognizing that agency, rather than assuming its erosion, offers a more grounded starting point for assessing both the risks and the realities of China’s presence in Latin America.

Zenel Garcia is associate dean and associate professor at the U.S. Army War College, where he holds the Henry L. Stimson Chair of International and Military Studies. The views and opinions expressed in this commentary are solely those of the author.

Chancay Multipurpose Port

China in South America

China port investment abroad

Chinese investment in Peru

Chinese overseas investment

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