China’s Port Investments in Latin America Are About Leverage, Not Just Trade
The MOC
By
Anthony Gaudiuso
October 1, 2026
Discussion about Chinese-backed ports in Latin America, usually includes one particular worry: what if a regular shipping dock turns into a Chinese navy base someday? While it’s worth keeping an eye on, when a company builds and operates a major port, it doesn’t just win a business deal. It gets control over a big part of how that whole country trades with the rest of the world.
The company running a major terminal sits at the center of vessel operations, cargo handling, inland transportation, security systems, and the digital networks that connect them. That can give an operator access to valuable information about vessel schedules, cargo flows, delays, and transportation bottlenecks.
In Latin America, companies connected to the Chinese government are taking a bigger role in the region’s ports. Thus, China’s influence does not require a warship to reinforce it. Instead, this influence is already integrated into the system.
What makes this issue convoluted, however, is that Latin American States need such funding. The Inter-American Development Bank says the region needs about $2.2 trillion by 2030 just to meet basic development goals set by the United Nations. Ports — governments need help paying for all of it, and Chinese companies consistently show up with the funding.
And that offer really is hard to turn down. A good port means cheaper shipping, shorter waits, more local jobs, and exporters who can compete. Eventually, though, that assistance can turn into dependence, leaving the funding, day-to-day control, and data all in the hands of a single company that answers to a foreign government.
However, Chancay’s significance isn’t just due to its large size, but it’s because COSCO controls what could become one of the most important trade ports in all of South America. That means COSCO can see almost everything about how goods move through the region — which ships come and go, how long things get delayed, where the weak points are. It becomes a problem the next time there’s a real fight between the U.S. and China over something else — a rivalry Latin America is brought into simply by hosting the ports both nations depend on.
Beneath the legal disputes is a dilemma of where a company’s rights end and a country’s right to run itself begins. Signing a deal that lasts decades is a bet — a bet that the government will still have enough power left, years later, to control prices and data, once the company is fully settled in. That’s a hard bet to take back once it goes wrong, because by then the company has already spent huge amounts of money and locked in its rights. And ports keep getting more digital every year. The computer systems, cameras, scanners, and networks now matter just as much as the cranes and the docks. The U.S. government’s cybersecurity agency, CISA, runs practice drills for ransomware attacks and other cyberattacks on ports. If a foreign-run port gets hacked, the damage doesn’t stay in one place. It can leak private business information, stop cargo from moving, and create alarm in the supply chain.
CK Hutchison isn’t owned by the Chinese government, so it’s not fair to treat it exactly like COSCO. But Panama still makes the point clear: any foreign company running a port next to something as important as the Panama Canal is going to get pulled into political fights, no matter who owns it. In switching out the company running the port, a government gets lawsuits, angry diplomats, and shipping problems, all at the same time.
None of this means Latin American countries should just refuse Chinese money. That wouldn’t work anyway, because it ignores why these deals happen in the first place. It’s very unlikely that a government facing a huge infrastructure gap would turn down a fully paid-for port just because the U.S. doesn’t like who’s paying for it. What would work is the U.S. showing up earlier, before the contract gets signed. The U.S. doesn’t need to spend exactly as much as China on every single port, but it does need to offer a real alternative while a project is still being planned, not after a Chinese company is already the only company bidding. The Development Finance Corporation, a U.S. government agency, already puts money into infrastructure projects meant to make supply chains stronger, and it needs to do a lot more of that, working with allies and private companies, on ports, energy, and internet infrastructure. That’s harder to do right now than it should be. Shutting down USAID got rid of a tool the U.S. used to build good relationships in the region in the first place, and the Development Finance Corporation can’t fully make up for that loss on its own.
Money by itself doesn’t solve this problem. It must come with better rules written into the contract. Deals need to clearly outline who has the power to make rules, what the cybersecurity standards are, who owns the data, who is allowed to inspect cargo, equipment, and other port systems, who gets access during emergencies, and what happens if the company running the port needs to be replaced. Before signing anything, officials must confirm whether the government can step in during an emergency without getting stuck in years of legal fighting. Data collected by port operators can flow through corporate networks to parent companies, creating concerns about whether sensitive information could ultimately become accessible to Chinese authorities. Contracts should also make clear what safeguards are in place to prevent sensitive information from reaching a foreign government. A lot of this doesn’t take a large budget — training for customs workers, help checking cargo, port cybersecurity support, cleaner rules for awarding contracts, better tracking of what’s happening at sea. But together, they add up to a government that understands what’s going on inside its own ports.
Latin American countries don’t need to be lectured about the risks of taking Chinese money. They already deal with that trade-off every day. What they need is real investment and options that can actually compete with China’s offers. Chinese-funded projects are solving real problems, and pretending otherwise doesn’t help anyone. The danger shows up specifically when control over ports, shipping systems, and data all end up in the hands of companies tied to one foreign government. The job for the U.S. is to help its partners keep enough control to run their own trade smoothly while still having options for the day that stops being easy.
Anthony Gaudiuso is an undergraduate student at SUNY Maritime College studying International Transportation and Trade. His interests include maritime strategy, port security, infrastructure policy, and international trade.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.
Center for Maritime Strategy
By Anthony Gaudiuso
Discussion about Chinese-backed ports in Latin America, usually includes one particular worry: what if a regular shipping dock turns into a Chinese navy base someday? While it’s worth keeping an eye on, when a company builds and operates a major port, it doesn’t just win a business deal. It gets control over a big part of how that whole country trades with the rest of the world.
The company running a major terminal sits at the center of vessel operations, cargo handling, inland transportation, security systems, and the digital networks that connect them. That can give an operator access to valuable information about vessel schedules, cargo flows, delays, and transportation bottlenecks.
In Latin America, companies connected to the Chinese government are taking a bigger role in the region’s ports. Thus, China’s influence does not require a warship to reinforce it. Instead, this influence is already integrated into the system.
What makes this issue convoluted, however, is that Latin American States need such funding. The Inter-American Development Bank says the region needs about $2.2 trillion by 2030 just to meet basic development goals set by the United Nations. Ports — governments need help paying for all of it, and Chinese companies consistently show up with the funding.
And that offer really is hard to turn down. A good port means cheaper shipping, shorter waits, more local jobs, and exporters who can compete. Eventually, though, that assistance can turn into dependence, leaving the funding, day-to-day control, and data all in the hands of a single company that answers to a foreign government.
Peru’s Chancay port shows exactly what that looks like. China’s president Xi Jinping and Peru’s president at the time, Dina Boluarte, opened the port in November 2024 during a big economic summit in Lima. COSCO Shipping Ports, a company owned by the Chinese government, owns most of the port and runs it. COSCO says that just the first part of the port was built to handle a million shipping containers a year, six million tons of other cargo, and 160,000 cars, connected to the main highway by a mile-long tunnel. This gives Peru a much shorter route to sell goods in Asia, and Brazil is already looking at using the port to send its own farm goods overseas, while Brazilian and Chinese officials have talked about building a train line to connect Chancay to Brazil. If that train line gets built, Chancay could change how a big part of South America reaches Asia.
However, Chancay’s significance isn’t just due to its large size, but it’s because COSCO controls what could become one of the most important trade ports in all of South America. That means COSCO can see almost everything about how goods move through the region — which ships come and go, how long things get delayed, where the weak points are. It becomes a problem the next time there’s a real fight between the U.S. and China over something else — a rivalry Latin America is brought into simply by hosting the ports both nations depend on.
A 2025 CSIS report found 37 port projects across Latin America and the Caribbean tied to Chinese companies. The risk level was different for each one. It depended on who owned the port, who ran it day to day, how close it was to something important, and how much power the local government kept for itself. A company that fully controls a major port matters a lot more than one with a small building contract somewhere less important. Peru and COSCO have gone to court over who gets exclusive rights to run the port, over who gets to set prices, and over how much the government is allowed to check on things. In July 2026, a Peruvian court gave the government’s transportation watchdog, Ositrán, its power back over the port, after an earlier ruling had basically taken that power away.
Beneath the legal disputes is a dilemma of where a company’s rights end and a country’s right to run itself begins. Signing a deal that lasts decades is a bet — a bet that the government will still have enough power left, years later, to control prices and data, once the company is fully settled in. That’s a hard bet to take back once it goes wrong, because by then the company has already spent huge amounts of money and locked in its rights. And ports keep getting more digital every year. The computer systems, cameras, scanners, and networks now matter just as much as the cranes and the docks. The U.S. government’s cybersecurity agency, CISA, runs practice drills for ransomware attacks and other cyberattacks on ports. If a foreign-run port gets hacked, the damage doesn’t stay in one place. It can leak private business information, stop cargo from moving, and create alarm in the supply chain.
Panama shows a different version of the same story. A company called Panama Ports, owned by a Hong Kong firm named CK Hutchison, has run two major ports at each end of the Panama Canal since a deal signed in 1997 and renewed in 2021. Those ports were never actually part of the canal itself, so claiming China “controls the Panama Canal” is an exaggeration. Still, just being located there made the deal a political problem. In January 2026, Panama’s highest court canceled the deal, saying it broke the country’s constitution, and Panama Ports took the fight to an international court afterward.
CK Hutchison isn’t owned by the Chinese government, so it’s not fair to treat it exactly like COSCO. But Panama still makes the point clear: any foreign company running a port next to something as important as the Panama Canal is going to get pulled into political fights, no matter who owns it. In switching out the company running the port, a government gets lawsuits, angry diplomats, and shipping problems, all at the same time.
None of this means Latin American countries should just refuse Chinese money. That wouldn’t work anyway, because it ignores why these deals happen in the first place. It’s very unlikely that a government facing a huge infrastructure gap would turn down a fully paid-for port just because the U.S. doesn’t like who’s paying for it. What would work is the U.S. showing up earlier, before the contract gets signed. The U.S. doesn’t need to spend exactly as much as China on every single port, but it does need to offer a real alternative while a project is still being planned, not after a Chinese company is already the only company bidding. The Development Finance Corporation, a U.S. government agency, already puts money into infrastructure projects meant to make supply chains stronger, and it needs to do a lot more of that, working with allies and private companies, on ports, energy, and internet infrastructure. That’s harder to do right now than it should be. Shutting down USAID got rid of a tool the U.S. used to build good relationships in the region in the first place, and the Development Finance Corporation can’t fully make up for that loss on its own.
Money by itself doesn’t solve this problem. It must come with better rules written into the contract. Deals need to clearly outline who has the power to make rules, what the cybersecurity standards are, who owns the data, who is allowed to inspect cargo, equipment, and other port systems, who gets access during emergencies, and what happens if the company running the port needs to be replaced. Before signing anything, officials must confirm whether the government can step in during an emergency without getting stuck in years of legal fighting. Data collected by port operators can flow through corporate networks to parent companies, creating concerns about whether sensitive information could ultimately become accessible to Chinese authorities. Contracts should also make clear what safeguards are in place to prevent sensitive information from reaching a foreign government. A lot of this doesn’t take a large budget — training for customs workers, help checking cargo, port cybersecurity support, cleaner rules for awarding contracts, better tracking of what’s happening at sea. But together, they add up to a government that understands what’s going on inside its own ports.
Latin American countries don’t need to be lectured about the risks of taking Chinese money. They already deal with that trade-off every day. What they need is real investment and options that can actually compete with China’s offers. Chinese-funded projects are solving real problems, and pretending otherwise doesn’t help anyone. The danger shows up specifically when control over ports, shipping systems, and data all end up in the hands of companies tied to one foreign government. The job for the U.S. is to help its partners keep enough control to run their own trade smoothly while still having options for the day that stops being easy.
Anthony Gaudiuso is an undergraduate student at SUNY Maritime College studying International Transportation and Trade. His interests include maritime strategy, port security, infrastructure policy, and international trade.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.