21 member countries from North and South America and Southeast Asia attended the 35th APEC Summit in Peru (November 15-16), which demonstrated a rapidly shifting power balance in the region. It is clear that the United States is losing influence, despite its endeavors to preserve its hegemony.
APEC functions as a platform that is consistent with the tenets of classical liberalism. Even its adopted declarations and statements could be readily reconciled with the rhetoric of US leadership.
For instance, the joint ministerial declaration underscored the necessity of a digital ecosystem that is conducive, open, equitable, non-discriminatory, safe, and inclusive to facilitate trade, as well as improve trust and security in the use of information and communication technologies (ICT). It encouraged nations to expedite their initiatives toward digital transformation. As part of an agreement with AIDEN (APEC Internet and Digital Economy Roadmap), members pledged to ensure the privacy, protection, and trust of digital transactions while facilitating data flow—objectives that align with the policy objectives of the United States.
On November 16, the leaders of member states, including rival powers like the United States and China, endorsed the Machu Picchu Declaration. This document also promoted the promotion of regional connectivity at various levels and advocated for fair, transparent, and predictable trade without discrimination. Moreover, the upcoming APEC summits in South Korea, China, and Vietnam from 2025 to 2027 underscore the growing importance of Southeast Asia in APEC over the next three years.
Nevertheless, certain subtleties were identified. It is important to note that the summit documents did not reference the Build Back Better World (B3W) program, which was initiated by the United States in 2021 and is led by President Joe Biden. The omission of this US geoeconomic initiative underscores its apparent failure, despite its alignment with APEC’s objectives. White House and State Department representatives occasionally mention the initiative to influence Latin America and the Indo-Pacific, but its impact has been negligible.
Conversely, China emerged as a constructive player and a distinct leader. In addition to symbolic gestures, such as Xi Jinping’s position at the center of the leaders’ group photo while President Biden was standing to the side, China’s actions were significant. On November 15, the presidents of Peru and China inaugurated the Chancay Port, located approximately 70 kilometers from Lima on the Pacific coast. The $3.4 billion project is under the control of Chinese logistics company COSCO Shipping, which possesses a 60% stake.
The port’s initial capacity is 1 million TEUs (twenty-foot equivalent units) per year, with the potential to increase to 1.5 million TEUs. ‘People’s Daily’ reports the completion of major dock facilities earlier this year, with over 80% of the work completed. This new hub in Latin America reduces logistics costs by up to 20% and shortens delivery timelines to 23 days for China. Previously, shipments traveled through Mexico or Panama before reaching South America. Peru now serves as a transit hub for neighboring countries like Ecuador, Colombia, Bolivia, Chile, and Brazil, potentially expanding to Argentina, Paraguay, and Uruguay via direct shipments to South America.
Peru also benefits from this development, as it enables the country to increase its exports considerably. Peru exported $23 billion in commodities to China last year, a fourfold increase from 2009. Mineral resources comprise the majority of these exports, which amount to 90%. China is notably interested in increasing its imports of copper and other resources, as Peru and Chile are the global leaders in copper production, and Bolivia has significant lithium reserves.
Peru’s primary exports to China in 2023 were ore and slag ($19.8 billion), copper ($1.18 billion), food industry byproducts and animal feed ($733.5 million), seafood ($336.9 million), edible fruits and nuts ($282.3 million), and mineral fuels and lubricants ($258.8 million).
Clearly, the Belt and Road Initiative (BRI) of China is progressing in a manner that is at odds with the preferences of Washington. US criticism of China’s activities in the region has been swift, with retired US General Laura Richardson, former chief of the US Southern Command, expressing apprehensions that the port could accommodate Chinese naval vessels. Additionally, she expressed her opposition to a Chinese port that was being considered in southern Argentina.
Delays in the construction of roads and rail lines necessary to connect products to the port were among the concerns expressed by Peruvian analysts and ‘Foreign Policy’. However, analysts anticipate that China and Peru will collaborate to resolve these obstacles. The new port is on the brink of becoming a model for other countries, showcasing China’s capabilities in contrast to US initiatives.
The United States previously advocated for a purely geoeconomic strategy, which China has intriguingly adopted. However, this strategy is devoid of the ideological constraints and physical power that are frequently associated with Washington’s policies. China has established itself as a more alluring partner than the United States by integrating pragmatism with a non-coercive strategy.