When videos surfaced of Peru’s president arriving in a hooded top for late-night meetings with the businessman Yang Zhihua, it sparked the latest in a string of Peruvian political scandals.
Dubbed Chifagate, after the Chinese-Latin American fusion restaurants where the undeclared meetings took place, it ultimately led to José Jerí’s ousting in February. Peruvian law requires all such meetings to be documented. The next election process – to choose a successor who will be the ninth president of Peru in just a decade – begins on 12 April.
Chifagate has elicited broader questions about the growing influence of Chinese investors and businesses in Peru. Yang is one of scores of business people who have driven Peru’s investment links with China since the 1990s. His company holds a concession for a hydroelectric project on Pachachaca River. Delivery was initially promised for early this year, but at the time of his meetings with Jerí, it had applied for a three-year extension.
Several Chinese companies have become key components of Peruvian mining, energy and infrastructure. The most notable example is Chancay port, a megaport near Lima, which the US has recently spoken out about as it targets Chinese influence in the region.
Beyond the implications of geopolitics, these developments are situated in some of Peru’s most ecologically sensitive regions. Research by the OECD and environmental groups has shown that weak governance has undermined environmental oversight of extractive industries in particular.
Decades of corruption
For years now, Peru has been mired in political turbulence, marked by presidents being investigated, prosecuted or convicted for corruption.
The first was Alberto Fujimori, removed from office in 2000, who spent 16 years in prison for human rights violations and corruption offences. Fujimori died in 2024.
Four of his successors were then ensnared in Lava Jato (Operation Car Wash), a bribery scandal involving Brazilian construction companies.
Another, elected in 2021, also found himself under investigation for alleged bribes, linked to public works. After being impeached and convicted of conspiracy to rebel, his successors were unable to complete their terms due to impeachment proceedings and congressional censure.
According to José Luis Gargurevich, executive director of Proética, part of anti-corruption network Transparency International, the balance between branches of government has broken down: “Political instability shows that any congressperson could become president tomorrow […] congress has accumulated disproportionate power.”
Congress is perceived as the country’s most corrupt institution, found a Proética survey conducted last year of 1,300 Peruvians living in urban areas, earning an 85% disapproval rating. In Transparency International’s 2025 Corruption Perceptions Index, Peru ranks 130 out of 182 countries.
Against this backdrop, Peruvians will head to the polls on 12 April to elect a new president.
China’s investment growth
Chinese companies are continuing to invest in Peru. “China has a long-term vision and Peru’s political turbulence does not necessarily alarm them,” says Cynthia Sanborn, director of the Centre for China and Asia-Pacific Studies (CECHAP) at the University of the Pacific (PE) in Lima.
The country has become Peru’s main trading partner in recent decades. According to CECHAP figures, seen by Dialogue Earth, Investments totalling USD 27.9 billion represented 21% of all foreign investment in the country at the end of 2023. Mining remains the flagship sector, accounting for 47% of this total.
The presence of major Chinese state-owned enterprises began in 1992, when Shougang acquired the state-owned company, Hierro Perú. This established Shougang Hierro Perú, based in Marcona in the coastal department of Ica, investing more than USD 2.25 billion.
This trade relationship deepened in 2007 with the arrival of the Aluminum Corporation of China, which took over the Toromocho copper megaproject in Junín, central Peru. It invested around USD 5.59 billion in infrastructure and mining operations.
The most significant recent acquisition came in 2014. A consortium led by MMG Limited, together with Guoxin and CITIC purchased one of Peru’s largest copper deposits, in the southern Apurímac region. They invested close to USD 4.74 billion.
In recent years, Chinese investment has diversified into energy, port infrastructure and logistics. Following the withdrawal of US and European capital, Chinese state-owned corporations acquired majority stakes in Enel and Luz del Sur, the main electricity distributors for the Peruvian capital Lima.
In 2024, China COSCO Shipping inaugurated the Chancay megaport, north of Lima. With a projected handling capacity of two million containers annually, it is considered the most important port facility on the South Pacific coast.
China also carries decisive weight in Peru’s trade balance. At the beginning of 2025, 28.7% of imports originated from China, while 33.8% of Peruvian exports were sent in the other direction.
Some Chinese firms operating in Peru have been linked to allegations of corruption. In 2022, a cooperating witness (providing information in exchange for legal benefits) made allegations against a group of congress members known as “Los Niños”. The group is accused of lobbying in favour of a consortia involving the China Railway Tunnel Group and the China Civil Engineering Construction Corporation.
Yang’s construction company is also a part of a group of 13, dubbed the “Dragon Club”. The group has been accused of “influence peddling” in relation to the acquisition of public contracts.
Sanborn worries observers may oversimplify this state of affairs, and is at pains to counteract negative assumptions: “We should not treat all Chinese investment as homogeneous, just as we would not do so with Mexican, US or French investment. Corruption allegations are a domestic problem across various sectors – they are also our responsibility to address.”
Socio-environmental tensions
Some Chinese companies operating in Peru have also faced complaints over environmental damage.
There has been opposition among Indigenous communities in La Convención province, central Peru since the China National Petroleum Corporation acquired the concession for this gas field from Petrobras Argentina in 2013. They claim proper consultation has not been carried out.
More recently, the ceramics and porcelain manufacturer Tengda – also linked to Yang Zhihua – built a 35-hectare plant in Salas district, Ica, in 2022. Before operations began, Peru’s Environmental Assessment and Enforcement Agency (OEFA) investigated and determined the facility would overexploit water resources and release gases that are harmful to health. The plant is currently not operational.
The investigative journalism outlet Ojo Público recently reported that several companies are under investigation for the illegal extraction, theft and export of mining tailings to China. The material arrived at Chinese ports after being purchased by WuChan ZhongDa International Group Co, Ltd and Shuikoushan Nonferrous Metals Co, Ltd, both state-owned enterprises. Neither responded to Dialogue Earth’s requests for comment. The illicit transport and extraction of potentially toxic materials highlights a lack of oversight which creates the risk of environmental damages.
Two powers in contention
Partly because of the levels of Chinese investment, Peru finds itself in the middle of ongoing tensions between China and the US.
Following a recent court ruling curtailing the power of local regulators over Chancay port, the US Bureau of Western Hemisphere Affairs warned of a possible loss of Peruvian sovereignty to Chinese owners.
The US ambassador to Peru, Bernie Navarro, escalated the rhetoric by posting on social media: “Everything has a price. In the long term, what was cheap is costly. There is no higher price to pay than losing sovereignty.”
Lian Jian, the Chinese Foreign Ministry in Peru’s spokesperson, responded at a press conference: “China firmly opposes the false accusations and disinformation spread by the United States against China-Peru cooperation on the Chancay port.”
César Gutiérrez, consultant and former president of Petroperú, tells Dialogue Earth he rejects claims the judicial measure undermines sovereignty: “Regulation of Chancay should have been defined before the port concession was granted in 2008, not six months before inauguration, as has been attempted.” More broadly in the region, the recently released US National Security Strategy emphasises the country’s desire to remain the hegemonic power in the western hemisphere. But Jose de Echave, a former environment vice-minister and a researcher at the NGO CooperAcción. argues the US is playing catch-up: “China has become the main trading partner of most countries worldwide, and Peru is one of them. It is difficult for the US to reverse investments such as Chancay, although it will likely attempt to counterbalance that influence, as seen in Panama with renewed US involvement in the interoceanic canal.”
Meanwhile, the US has approved a USD 1.5 billion agreement for the modernisation of the Callao naval base, near Lima’s international airport. In turn, a decision from Peru is pending on the acquisition of a fleet of fighter aircraft worth more than USD 3 billion.
For now, 83-year-old temporary president José María Balcázar faces the task of trying to maintain stability in a country experiencing constant turbulence.
