WATCH: Peru's $23 billion commercial exchange with China
Chinese Ambassador of Peru, Jia Guide, recently announced that Peru will join China’s Belt and Road Initiative (BRI). During the second Belt and Road Forum for International Cooperation when Peru signed the Memorandum of Understanding (MOU) joining China’s BRI. Head of Asian Studies Center at the National University of San Marcos in Lima, Carlos Aquino stated that Peru signing the MOU will boost bilateral relations through “greater investment.” China and Peru are setting up cooperation on several key fronts, which includes infrastructure, investment, and trade. Peru’s decision to sign the MOU came two weeks after the country was visited by United States Secretary of State Mike Pompeo. Following a recent interview with Peru’s Vice President, Mercedez Araoz. Pompeo stated that “signing this memorandum of understanding is the start of a cooperation model that China has proposed to the world which will allow us to broaden our ties.” However, along with this statement, Araoz believes that Peru will still have a strong partnership with the United States despite joining the Belt and Road Initiative.
Having first pitched the Belt and Road Initiative policy in 2013, Chinese President Xi Jinping’s main aim was to expand links with Africa and Europe through billions of dollars in infrastructure investments. Therefore by signing the MOU, Peruvian economist Carlos Aquino believes that by having an increase in infrastructure investment can lead to an improvement in economic activities. In January, an agreement was reached by Peruvian mining firm Volcan and China’s COSCO shipping ports. Both agreeing to the investment for the design, construction and operation of the Chancay Port Mega-complex project in Northern Lima.
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Along with the modernisation on Peruvian ports commencing, Aquino believes that this can lead to the importing cost of goods declining as the arrival time to Peru would be much faster. According to Foreign Trade and Tourism Minister Edgar Vasquez, the agreement formalises Peru’s intention in participating in the BRI to improve physical and virtual connectivity with Asia. Vasquez also states that by improving the country’s infrastructure, it will, in turn, improve Peru’s efficiency of maritime and air efficiency. Vasques stated that “Since 2014, China is the main trade partner of Peru.” Peru’s commercial exchange amounted to US$ 23billion, a historical record in bilateral trade.