Since 2014, China has become Peru’s main trading partner. According to data from the Central Reserve Bank of Peru (BCRP), by 2022 exports to the Asian country were 31.8%, while imports represented 25%.
Likewise, Adrián Armas, Central Manager of Economic Studies of the BCRP, pointed out that a factor that is becoming relevant is the Foreign Direct Investment (FDI)which, in general, reached approximately US$15,000 million, especially highlighting investment from China.
“Foreign direct investment in the mining sector in our country is estimated at around US$15 billion. The mines that allowed copper production to double between 2015 and 2016, when we went from 1.2 million tons to more than 2.5 million tons, corresponded to the Bambas and Toromocho projects,” said Armas during the presentation of the book “In Search.” of a path to avoid the middle-income trap: the cases of China and Peru” organized by China and Asia-Pacific Studies of the University of the Pacific and the Institute of World Economics and Politics (IWEP) of the Chinese Academy of Social Sciences (CASS).
Along these lines, in 2007, Chinese Foreign Direct Investment (FDIC) in Peru, it was just US$2,134 million (8%), and by 2022 it increased to US$28,715 (21%).
Armas also indicated that this FDIC increase is a reflection of China’s own balance of payments position, which last year had a current account surplus of 2%, one of the highest in the last 14 years.
“When a country has a current account surplus, it means that it is financing the method to the rest of the world. The first way in which this was observed was through the accumulation of international reserves that the People’s Bank of China had, and then it has been through foreign direct investment, through projects such as the old Silk Road and in different economic sectors in the region (Latin America),” he added.
Private mining investment in decline
In 2022, according to the BCRP, mining investment will reach US$5,364 million. Nevertheless, by 2023 it would decrease to US$4.67 billion, which represents a drop of 18.1%. It is estimated that for next year, the investment will be US$4,375 million, with a decrease of 7.6%.
Source: Larepublica
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