LIMA — Peruvian President Dina Boluarte is deeply unpopular at home. So no better time to travel abroad, and it’s hard to argue with her destination: Peru’s premier trading partner and source of billions of dollars in export wealth: China.
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Another sign of the ever unstable nature of politics in Peru, Boluarte currently has no vice-president to act in her place as the constitution demands, but will instead use a contested law that will allow her to govern from abroad.
Peru’s first female leader, Boluarte was not elected but thrust into the presidential office as vice-president in December 2022, after parliament sacked her predecessor, Pedro Castillo, who had sought to rule by decree. People expected her to call a general election, but she decided, in spite of major national riots, to rule to the end of Castillo’s term (2026 at the latest). One recent poll put her approval rating at 5%.
China’s investment in Peru
Her China visit, scheduled for June 23-29, precedes the APEC (Asia-Pacific Economic Cooperation) summit Peru will host in November, where China’s President Xi Jinping is expected to attend. Peruvians generally disapprove of presidential trips as costly and useless, but China is different. Peru counted more than billion worth of exports to China in 2023, with a surplus of billion in Peru’s favor, while China’s investments in Peru include participation in building one of the continent’s biggest ports, Chancay, which President Xi is slated to help inaugurate in November.
This flourishing trade has not been an entirely smooth ride.
Peru has become Latin America’s third biggest exporter to China, after Brazil and Chile, largely on the back of a free-trade pact signed in 2009. In 2008, its exports to China between January and November totaled just under .5 billion.
The treaty’s implementation began in March 2010, and Peruvian exports to China have quadrupled since, according to a report by the Andrés Bello Foundation, which studies Sino-Latin American ties. Peru’s Comex or external trade chamber, put the annual growth rate for exports in those years at 13.2%.
These figures give an idea of how China’s strategic and economic importance for Peru place relations above party politics. As one of Peru’s presidents, the late Alan García said in 2008, “Peru’s development is tied to China.”
For better or worse in developmental terms, mining has been the chief beneficiary of this boom, with mining products constituting almost 96% of all commodities or primary goods exported to China (and almost 74% of that in turn consisting of copper).
This largely explains Beijing’s investment in the Chancay port, which is designed to channel raw materials to China as smoothly and efficiently as possible (with further infrastructures now being built to lead exportables to the port). Peru has other exports to China of course including fish and farming produce, textiles and chemicals, but they are worth far less than the minerals.
What can Boluarte do?
This flourishing trade has not been an entirely smooth ride, as both sides have restrictions. In September 2016, Peru’s President Pedro Pablo Kuczynski also visited China for his first trip abroad, making some progress on issues like easing sanitary barriers on Peruvian exports.
The two sides discussed big projects like a railway to link Lima with the southern city of Ica, or a far bigger transcontinental rail to link the Pacific and Atlantic Oceans. That was touted as a -billion project and evidently of interest to China for easing exportation of products of interest to China, notably minerals and soy. But Kuczynski signed nothing then, in part for doubts around the Bi-Oceanic Railway’s environmental impact. No other president has gone to Beijing since, as Peru entered a period of political turmoil that continues to this day.
Boluarte nonetheless hopes to discuss some of the same topics as the past, notably fast-tracking sanitary checks on Peruvian exports and Chinese investment in construction projects in Peru. Boluarte and China’s Xi previously discussed these at the 2023 APEC summit in San Francisco, with Xi promising then to boost China’s purchase of foodstuffs including dairies, meat and some fruits.
Tech temptations
Boluarte will also visit China’s tech hub Shenzhen on June 25, and meet with the bosses of Huawei and BYD, two firms winning market share in Peru. Chinese tech firms have irked Peruvians for cases of paying politicians to visit their plants or tech events around the world. That was the case of Luis Aragón, a conservative member of Parliament, who visited the Barcelona Mobile World Congress as a guest of Chinese multinational Huawei.
Boluarte will also meet in Shanghai with the bosses of mining and construction firms Jinzhao Mining, China Railway Construction and Cosco Shipping.
As with all free-trade frameworks, both sides have their vital interests, which include in Peru’s case, using exports to diversify the economy. China wants commodities and resources, and to earn billions and flex its industrial muscle with big projects that are often designed to ship more commodities its way. Some might term this parasitical trade. Peru, like other Latin American countries, will not want to export basic resources forever, so both sides need to find a balance there.
Will Boluarte’s trip lead to more and the right kind of business for Peru, or simply become another costly trip, where an iffy politician enjoys being taken for a ride?
