The Chancay port has the potential to turn Peru into a global shipping hub and transform trade between South America and Asia by slashing travel times for cargo ships.

Once built, it will be the subcontinent’s largest deep seaport, with two massive terminals, one with 11 berths and another with four specifically built for bulk cargo, as well as for general cargo.

Not surprisingly, the project has been a thorn in the side of the United States since Cosco took a majority stake in the project in 2019.

The stated excuse is that its deepwater design makes it possible for Chinese naval use. Never mind that Cosco is exclusively a commercial shipping and logistic concern and there is no reason to think Lima would ever risk antagonising Washington by allowing dual military use.

But the US has been putting pressure on Lima, and earlier this year, quite implausibly, Peru’s port body declared it had no authority to grant Cosco the right to be the exclusive operator of Chancay.

Peruvian government lawyers duly took Cosco to court and tried to annul the original contract.

The Chinese side understandably demurred. With support from Peruvian industry groups, it argued virtually all major South American ports have exclusive operators. In any case, why would Cosco invest US$1.3 billion and then some if it didn’t have an exclusivity right?

Washington, of course, was ecstatic. It needed a really big project to portray Cosco as the Chinese bogeyman looming over South America, and Chancay fits the bill. It has tried to put virtually every Chinese project in that malevolent light, including a Deep Space Station in the Argentinian province of Neuquén that was key to the success of the multi-year Chang’e lunar exploration programme. It supposedly could be used for military intelligence and surveillance, never mind that the US military’s Southern Command also has an emergency operations and coordination centre a short distance away in the same province.

In March, the chief of Southern Command, General Laura Richardson, used the word malign, such as “malign actor” and “malign influence” 24 times in testimony before the House and Senate Armed Services Committee. It was obvious to everyone she was referring to China and Russia.

On a different occasion, referring to Chinese infrastructure and telecommunications investments across Latin America, Richardson warned last August that “they [the Chinese] are on the 20-yard line to our homeland”, making an American football analogy that the opposing team is close to a touchdown.

Referring to the port and other Chinese-funded projects in the country, an unnamed US official told the Financial Times last October: “On the big geostrategic issues, the Peruvian government is not sufficiently focused on analysing the benefits and threats to the country.”

There is no doubt that the Chancay port project falls under her military remit, so far as the US is concerned, even though it is 100 per cent commercial.

Now though, the die is cast. The civil suit has been dropped, and the original terms of exclusivity will be honoured. The first phase of port operations may start as early as November, a time no doubt chosen for the scheduled state visit to Lima by President Xi Jinping where a summit of the Asia-Pacific Economic Cooperation will be held. The port is a major part of the global Belt and Road Initiative and is considered key to the future of the Pacific trade.

The US is miffed. Expect the port project to fall in Washington’s cross hairs again.

What Washington is really worried about is not that the Chancay port will turn into a naval base, but its vast commercial and trade prospects, which could make the whole project a poster child of success for the Belt and Road Initiative, something the US and many of its Western allies have devoted many years and enormous efforts to malign and discredit.

God forbid if the port turns out to be a great success for Peru. What will its neighbours think about partnering with China?