The United States has issued a warning that Peru risks eroding its sovereignty after a court ruling limited state oversight of a Chinese-controlled megaport, prompting a sharp rebuke from Beijing and intensifying geopolitical tensions over a strategic hub on South America’s Pacific coast.
The dispute centres on the Port of Chancay, a US$1.3 billion deep water facility located about 80 kilometres (50 miles) north of Lima and majority owned by China’s state-run shipping giant Cosco Shipping Ports.
The port covers 180 hectares of Peruvian territory and has the capacity to handle up to one million containers a year.
Since its inauguration in November 2024 during the Asia-Pacific Economic Cooperation summit hosted by Peru, it has reportedly reduced shipping times between China and Peru to around 23 days and cut logistics costs by more than 20 per cent, while handling more than 336,000 TEU in its first year of operations.
In a message posted by the US State Department’s Bureau of Western Hemisphere Affairs, Washington wrote on X it was “concerned about latest reports that Peru could be powerless to oversee Chancay, one of its largest ports, which is under the jurisdiction of predatory Chinese owners”.
“We support Peru’s sovereign right to oversee critical infrastructure in its own territory. Let this be a cautionary tale for the region and the world: cheap Chinese money costs sovereignty,” the post added.
The remarks followed a ruling by a lower court in Lima on Wednesday that sided with Cosco Shipping Ports Chancay Peru in a constitutional protection action against the national transport infrastructure regulator Ositran.
The judge ordered the agency to refrain from exercising powers of regulation, supervision, inspection and sanction over the port’s operations, except in limited circumstances related to tariff setting and subject to a prior decision by the competition authority, Indecopi.
As Washington’s comments circulated, China’s foreign ministry dismissed them and defended the project.
Spokesperson Lin Jian said China “firmly opposes and strongly deplores the US’ blatant rumour mongering and smearing of Chancay port” and added that “the Chinese side expresses firm opposition and strong indignation” at what he called a “fabrication of rumours and slander by the US against Chancay Port”.
“Chancay Port, a deepwater hub and South America’s first smart green port, is a flagship belt and road cooperation project between China and Peru,” Lin said.
Cosco Shipping Ports also pushed back against the sovereignty concerns raised in the United States.
In a statement to media outlets, the company said the court decision “in no way involves aspects of sovereignty” and insisted that the port remains “under the jurisdiction, sovereignty and control of Peruvian authorities, subject to all Peruvian regulations”.
“Cosco Shipping has resorted to legal proceedings to assert its rights in relation to the specific oversight of Ositran. This does not mean that the State loses any capacity for control and supervision, nor for ensuring the protection of users’ rights,” the statement reads.
The company argued that the terminal is privately owned infrastructure financed entirely with private capital and not operated under a state concession contract, and therefore “should not be subject to the same regulatory regime applied to public or concessioned ports”.
But Peruvian law governing the national port system establishes oversight rules for both state-run and privately developed ports.
It assigns national authorities responsibility for port control and supervision, granting Ositran the mandate to monitor compliance with concession agreements and regulate tariffs in public-use port markets where competition is deemed insufficient.
Based on this argument, president of Ositran Veronica Zambrano said Cosco “would be the only company providing services to the public that could not be supervised”.
She confirmed the agency will appeal Wednesday’s decision, warning that without regulatory oversight final users such as importers, customs agents and cargo owners could be left without a formal authority to ensure transparency, non-discrimination and complaints procedures.
“Any investor is subject to a series of state inspections ... So if we say we are not going to oversee it, who will? No one will,” she told local newspaper El Comercio.
Peru’s government has also announced that it will challenge the ruling. In a statement, the Presidency of the Council of Ministers said it would use the legal mechanisms available if the decision is confirmed and reiterated that the port must comply with national law, including port security regulations.
Authorities noted that multiple state entities continue to operate at Chancay, including the National Port Authority, customs and tax officials, the navy’s port captaincy, anti-drug police units and environmental regulators. -- SOUTH CHINA MORNING POST
