The Asia-Pacific Economic Cooperation (APEC) summit in Lima concluded last week amid geopolitical shifts, with major decisions highlighting the region's importance in a rapidly changing global landscape. As 21 leaders from economies around the Pacific gathered, the event underscored the growing tensions between the US and China, while marking a new chapter in Peru's growing relationship with Asia.

This year’s event was particularly significant as it took place just as Chinese President Xi Jinping expanded China's footprint in Latin America, inaugurating the massive Chancay Port north of Lima. The port, set to become the largest shipping hub in South America, promises to revolutionise the region’s logistics and cement Peru’s role as a pivotal node in China’s Belt and Road Initiative. Xi, speaking during the summit, emphasised the importance of economic globalisation and multilateral cooperation, calling for an end to protectionism and tariffs, particularly as president-elect Donald Trump’s stance on international trade remains uncertain. His remarks came at a time when the future of the US-China rivalry hangs in the balance, as President Joe Biden, attending the summit, attempts to navigate these complex issues on the global stage during his last months in the White House.

Xi’s visit marks the culmination of increasing Sino-Peruvian cooperation, especially in the realms of trade and infrastructure. As the Chinese leader highlighted, the Chancay port will act as a critical link connecting Peru to Shanghai, which will expedite trade between Asia and Latin America, benefiting not just Peru but the entire region. The deepening ties were also reflected in the signing of a Free Trade Agreement (FTA) between Peru and Hong Kong, aimed at expanding the country's export capacity, notably for its agricultural products like blueberries, avocados, and fishmeal. With Hong Kong being a vital gateway for trade, this FTA signifies Peru’s strategic pivot towards Asian markets as part of its broader economic agenda.

However, the event was not just a celebration of new alliances. The potential impact of these developments on US trade policy loomed large. Mauricio Claver-Carone, a key adviser to Trump, recently floated imposing high tariffs on goods that pass through Chinese-controlled ports, including Chancay. This proposal signals a significant challenge for Peru, caught between its growing ties with China and its longstanding relationship with Washington, especially in the context of trade and security concerns.

The United States, through President Biden, reaffirmed its commitment to strengthening ties with Peru, particularly in security and counternarcotics efforts. The $65mn security assistance package, including a slew of Black Hawk helicopters, is a testament to the US' ongoing commitment to maintaining stability in Peru, especially as the two nations tackle shared challenges such as drug trafficking. Furthermore, Biden's discussions with President Dina Boluarte also focused on expanding cooperation in space, with new initiatives such as the NASA Sounding Rocket Memorandum of Understanding that was signed during the summit.

For Peru, the APEC summit was a milestone in its economic integration with the Asia-Pacific region. The country’s role as a major player in the global supply chain is becoming increasingly clear, with its growing trade partnerships, particularly with China and Hong Kong. In this regard, the signing of the FTA with Hong Kong is part of a larger strategy to position Peru as an economic hub in the Pacific, leveraging its strategic location and expanding infrastructure to boost exports and attract investment.

While the summit was marked by cooperation, it also underscored the shifting global dynamics, with China asserting its leadership in the region and the US grappling with internal challenges that could diminish its role on the world stage. For Peru, these developments present both opportunities and risks as it navigates its relationships with two of the world’s most influential powers. The coming years will test how well the Andean nation can balance these competing interests while ensuring its economic growth and security.

As the summit concluded, with Xi front and centre and Biden’s exit from the stage symbolising his waning influence, the question remains: will this moment of regional cooperation survive the political upheavals of the next few years? Peru's role in the Asia-Pacific is growing. Yet, as Beijing readies to assume the role of global defender of free trade, how it handles the next months' geopolitical shifts will determine whether it can fully capitalise on its emerging position in the global economy.