Balancing economic promise with concerns about organised crime and geopolitical tensions in Chancay, Latin America’s new mega-port

The port of Chancay before its inauguration on 14 November 2024. Image: iStock

9 January 2025

The infrastructure project is expected to continue leading to excessive claims of a looming threat, while inserting itself into the agenda of incoming US president Donald Trump. What is mostly certain is that the area is not going to be torn apart by organised crime in the short term and there is plenty of time to design proper guardrails.

By Diego Briceño, Latin America and Caribbean Analyst

Expected to handle five million TEUs annually, the fully automated mega-port of Chancay in Peru is set to become Latin America’s most important and efficient seaport. With China as the region's largest trading partner, the promise of shorter, direct routes to Asia offers significant potential for boosting transpacific trade and economic growth.

However, concerns about economic coercion and organised crime have emerged across the Americas. The port is built, owned, and exclusively operated by a subsidiary of the Chinese conglomerate Cosco Shipping, which the US Department of Defence has linked to the Chinese military. While China's influence in the region and the risks associated with dual-use technologies and infrastructure are well documented, fears are growing over Chancay becoming a hub for smuggling and organised crime.

China is already a key source of contraband goods and chemical precursors for fentanyl and methamphetamine production, as well as a lucrative destination for drug smuggling. Increased trade flows between finished products and bulk commodities create opportunities for criminal organisations to expand illegal activities, including drug trafficking and wildlife smuggling.

Moreover, Chinese state-owned conglomerates are known for operating with higher degrees of opacity. Chancay’s vertically structured operations present potential vulnerabilities for infiltration by organised crime groups. These groups could exploit the port’s supply chains through corruption, including bribery and falsified cargo manifests.

Despite these concerns, much of the alarm has been amplified by US-based analysts and think tanks, often coloured by anti-China sentiment. Chancay’s operation could increase risks of smuggling and corruption. But there is no substantial evidence to support exaggerated claims made in op-eds, social media, or news reports.

Chinese shipping conglomerates already operate at least seven ports across the region. Although some, such as Lazaro Cardenas, are linked to smuggling, these operations have not caused a marked increase in organised crime. Historical evidence suggests that larger regional dynamics, rather than localised factors, primarily drive criminal activities in Latin America.

Another point often misunderstood concerns the expansion of organised crime networks. While some assume criminal actors operate purely on cost-benefit analysis, examples such as Peru’s ports challenge this notion. The Venezuelan Tren de Aragua crime group, for instance, has overlooked nearby ports like Callao – despite opportunities. Similarly, while drug trafficking is a significant maritime threat, Peru’s violent crime and smuggling levels remain lower than those of Colombia and Ecuador.

The overall situation for the port of Chancay should not be overlooked. The infrastructure project is expected to continue to attract excessive claims of a looming threat, while inserting itself into the agenda of incoming US president Donald Trump if China’s regional presence attracts his ongoing attention. However, the threat landscape should be addressed properly, including the likelihood of additional constraints over Peruvian authorities to counterbalance the unregulated operational environment. What is mostly certain is that the area is not going to be torn apart by organised crime in the short term and there is plenty of time to design proper guardrails.

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