From November 13 to 15, the 31st APEC Economic Leaders' Meeting was held in Lima, the capital of Peru. The meeting, under the theme of 'Empower, Include, Grow', inspired in-depth exchanges with world leaders on global cooperation, bilateral relations and the current international situation.
China's leader also met Peruvian President Dina Ercilia Boluarte Zegarra during a state visit. The two sides witnessed the signing of a protocol on upgrading the bilateral free trade agreement, plus a cooperation plan on jointly building the Belt and Road Initiative. They attended the inauguration of Chancay Port via video, a mega-port that marks a milestone in China-Peru cooperation under the Belt and Road Initiative (BRI).
In a recent interview with GDToday, Jorge Mazuelos, an Asian politics specialist and TV anchor at TV Peru, viewed that China and Peru's relations have significantly strengthened after the state visit, with both qualitative and quantitative growth in not just trade, but also more bonded closer in digital transformation and the green economy.
Peru's Chancay Port under China's BRI is best practice of win-win cooperation
As the two state leaders met during the APEC, Chancay Port, a flagship project under China's Belt and Road Initiative in South America, which will soon be in use, has earned tremendous global attention.
Situated approximately 80 kilometers north of the capital Lima on the Pacific coast and directly connected to the Pan-American Highway, a network of roads stretching across the Americas, the deepwater port is also poised to become a pivotal logistics hub between Latin America and Asia.
"It is actually a game changer because it will totally change the logistics game in South America and will allow us to export directly to Asia without passing through ports in North America, such as Manzanillo or Lazaro Cardenas in Mexico or Long Beach in the United States," he commented on the new port.
As a flagship BRI project, the Chancay Port will enhance trade efficiency between Peru and Asia, cutting shipping times to China to 23 days and reducing logistics costs by at least 20 percent.
He described the Chancay Port as a milestone for not just Peru, but also the whole spectrum of Trans-Pacific trade. "We see the fact that South American countries, not just Peru, but also Chile, Ecuador, and Colombia will be able to export directly to Asia through Chancay," he said.
The Chancay Port will strongly consolidate Peru's position as a gateway that connects land and sea, Asia and Latin America. Besides, China is ready to work with Peru to build a new land-sea corridor between China and Latin America with the Chancay Port as a starting point.
In addition to trade growth, he also sees the port bringing the country the exciting possibility of creating special economic zones. Creating special economic zones will allow the country to strengthen its industrial base, as he added, and China's cooperation could be quite important in this.
"China's ability to transfer technology will also be essential, I mean, when it comes to critical technologies. China is leading in 37 sectors out of 44 sectors in critical technologies," said Jorge. "Therefore, China's cooperation in technological transfer will certainly help us boost our development."
APEC empowers Peru's transition for a global and formal economy
As the host of the APEC meeting this year, Peru has proposed 'Innovation and digitalization to promote transition to the formal and global economy,' from the outset, which is a consideration not only from its domestic ends, but also international ones.
"Over 70 percent of our economy is unfortunately informal. Over 60 percent of our workforce is in the informal sector, which means that they don't have access to social security, health benefits, vacations, and a whole range of benefits that are essential for workers," Jorge explained the concerns facing Peru's economy.
As he analyzed, APEC members realized that the problem of the informal economy is not just an issue for developing economies but also for developed economies. "Therefore, every APEC economy has some degree of informal economy, which has to be addressed," he said.
As the consensus is made among APEC members, Peru presented a roadmap that includes structural reforms related to pension systems, labor standards, and regulations, which are essential to managing the shift towards formalization.
Financial inclusion, digital access, and the ability to access public services are also vital components of this roadmap. As Jorge detailed, digital tools have been identified as instrumental in reducing informality by lowering transaction and registration costs, thereby making it easier for enterprises to formalize.
Peru and China will see trade growth after upgrading the bilateral free trade agreement
One of the major highlights during the Chinese leader's visit to Peru was the signing of a protocol on upgrading the bilateral free trade agreement, in addition to a joint statement on deepening the comprehensive strategic partnership between the two countries.
"We have revised seven chapters in the original free trade agreement, and we have added five new chapters this time," Jorge explained to us about the changes made with the upgrade. "Some areas are related to, for example, the digital economy, which probably wasn't a big thing back then but is certainly quite essential now."
By leveraging the framework of APEC, which promotes trade liberalization and sustainable economic development, the trade relationship between the two countries has grown exponentially, with bilateral trade volume rising to $37.691 billion in 2023, while China has been Peru's largest trading partner and largest export market for 10 consecutive years.
"China is a big investor in Peru. It's the country where China invests the most in the region, in Latin America, after Brazil. China has over 30 thousand million dollars invested in Peru," Jorge added. "China is the main destination of our exports. It accounts for 36 percent of Peru's outward trade."
In Jorge's view, there has been and will be qualitative and quantitative growth in two-way trade. He noted that the trade of key product categories, such as minerals, agricultural products, and fisheries, has been vital for Peru's economic growth, while China benefits from a stable supply of essential raw materials for its industries.
Green energy remains the key to Peru-China partnership
Another key priority for APEC Peru 2024 is the promotion of green and digital transitions. Peru has already engaged deeply in dialogues concerning a fair and sustainable energy transition, a topic that resonates well within the APEC community.
In a time when global energy dynamics are shifting rapidly, Peru's efforts to promote hydrogen-based energy and other green alternatives within the APEC framework align with its broader domestic goals of enhancing energy security and mitigating environmental impacts.
"We wish that we could industrialize our economy and also provide more goods with added value to the Chinese market. For example, when it comes to agri-foods, I think there is great potential." Jorge pinpointed how the two economies remain complementary to each other.
He stated that Peru is currently in the process of transition to a green economy, and China is one of the leading countries when it comes to developing green energies, such as solar, wind, and thermal energy.
"Peru is one of the countries with the biggest production of copper, which is a mineral that is absolutely essential for this green transition." Therefore, if China invests in industries here in Peru, it will allow us to develop our industries."
He shared that representatives from the private sectors in Peru were expecting that a Chinese company would set up an industry for electric cars in Peru. "These cars could be exported to other markets, and Peru is in the central part of the coast of South America. Therefore, this will allow these products to reach other markets in the region in a very convenient way," he said.
Reporter | Guo Zedong
Video | Liang Zijian
Poster | Cai Junru
Editor | Steven, James, Shenhe
