Since the dust settled after the US election, export tariffs are one of the most concerned issues for many textile people.

According to Bloomberg News, members of the new US President’s team recently said in a telephone interview that they would impose the same tariffs as China on any goods passing through the port of Qiankai.

Qiankai Port, a name that most textile people are unfamiliar with, why can people make such a big fight? What kind of business opportunities are there in the textile market behind this port?

Chankai Port

Located on the Pacific coast of western Peru, about 80 kilometers from the capital Lima, the port is a natural deep-water port with a maximum depth of 17.8 meters and can handle super-large container ships.

Qiankai Port is one of the landmark projects of the Belt and Road Initiative in Latin America. It is controlled and developed by Chinese enterprises. The first phase of the project started in 2021. After nearly three years of construction, Qiankai Port has begun to take shape, including four dock berths, with a maximum water depth of 17.8 meters, and can dock 18,000 TEU super large container ships. The designed handling capacity is 1 million per year in the near future and 1.5 million TEUs in the long term.

According to the plan, after the completion of the Qiankai port will become an important hub port in Latin America and “South America’s gateway to Asia.”

The operation of the Chankai port will significantly reduce the transportation time of goods exported from South America to the Asian market from 35 days to 25 days, reducing logistics costs. It is expected to bring $4.5 billion in annual revenue to Peru and create more than 8,000 direct jobs.

Peru has a large textile market

For Peru and neighboring South American countries, the significance of the new Pacific deep-water port is to reduce dependence on ports in Mexico or California and export goods directly to Asia-Pacific countries.

In recent years, China’s export to Peru has grown rapidly.

In the first 10 months of this year, China’s import and export to Peru reached 254.69 billion yuan, an increase of 16.8% (the same below). Among them, the exports of automobiles and spare parts, mobile phones, computers and household appliances increased by 8.7%, 29.1%, 29.3% and 34.7%, respectively. In the same period, the export of Loumi products to Peru was 16.5 billion yuan, an increase of 8.3%, accounting for 20.5%. Among them, the export of textile and clothing and plastic products increased by 9.1% and 14.3%, respectively.

Peru is rich in copper ore, lithium ore and other mineral resources, and there is a strong complementary effect with China’s manufacturing industry, the establishment of Qiankai port can better play this complementary advantage, bring more income to the local, expand the local economic level and consumption power, but also for China’s manufacturing exports to open more sales, to achieve a win-win situation.

Food, clothing, housing and transportation as the basic needs of people, a local economic development, local residents naturally will not lack the yearning for high-quality clothing, so the establishment of Qiankai port is also a huge opportunity for China’s textile industry.

The lure of the South American market

Today’s textile market competition has entered the white heat, in addition to the rapid growth of production capacity, there is another reason is that the global economic growth slowdown, the increase in demand is limited, everyone is competing in the stock market, then open up emerging markets is particularly important.

In recent years, the joint construction of the “Belt and Road” has achieved more and more results, in the field of textiles, China’s annual exports to Southeast Asia, the Middle East and other emerging markets rapid growth, and South America may be the next “blue ocean”.

South America is about 7,500 kilometers from north to south, covers an area of 17.97 million square kilometers, includes 12 countries and one region, has a total population of 442 million, has rich natural resources, and there is a lot of complementarities with Chinese industry and demand. For example, this year, China imported a large amount of beef from Argentina, which greatly enriched the dining table of residents, and China also needs to import a large number of soybeans and iron ore from Brazil every year, and China also provides a large number of industrial products to the local. In the past, these transactions required passing through the Panama Canal, which was time-consuming and costly. With the establishment of Qiankai Port, the process of traffic integration in this market is also accelerating.

The Brazilian government has announced that it intends to invest about 4.5 billion reais (about $776 million) to promote the South American integration plan, which will be used to support the development of the domestic part of the two-Ocean railway project. The plan focuses on road and water transport projects in the short term, but includes rail projects in the long term, and Brazil says it needs partnerships to build new railways. At present, Brazil can enter Peru by water and export through the port of Ciancay. The Liangyang Railway connects the Pacific and Atlantic Oceans, with a total length of about 6,500 kilometers and an initial total investment of about 80 billion U.S. dollars. The line starts from the Peruvian port of Ciancay, passes northeast through Peru, Bolivia and Brazil, and connects with the planned East-West railway in Brazil, and ends east at Puerto Ileus on the Atlantic coast.

Once the line is opened, in the future, the vast market in South America will be able to radiate around the center of Chankai Port, opening the door to Chinese textiles, and the local economy can also usher in development through this east wind, and ultimately form a win-win situation.