China has become Peru’s second largest trade partner, with interests basically in mining and oil. However, it is viewed with caution by this Andean nation, because the Asian giant has a reputation for flouting environmental standards and labour rights.
China accounts for 40 percent of the total investment flowing into Latin America, while this region is an important source of commodities needed for China’s breakneck rate of growth.
But analysts say this relationship should be radically modified so that the emerging global power becomes an actual partner, making a real contribution to development in Peru.
Peruvian economist Víctor Torres Torres and U.S. political scientist Cynthia Sanborn have written “La Economía China y las Industrias Extractivas: Desafíos para el Perú” (China’s Economy and Extractive Industries: Challenges for Peru), a book that describes how Beijing’s increasing investment in Peru is concentrated in the extractive industries.
There are two leading Chinese mining firms in Peru: Chinalco, which runs the Toromocho mine, and the Zijin Consortium, which administers Río Blanco, the new name for the controversial project formerly known as Majaz.
The Río Blanco project has been at the centre of conflict with local people opposed to the mine since 2004. Several people have been killed and many more wounded, and legal charges have been brought against dozens of rural leaders and environmental activists.
The latest violent incident took place in December  in the province of Huancabamba, where two local peasant farmers were shot and killed during police investigations in their villages of an earlier attack on the mining camp, according to the La República newspaper.
The view of local residents is that the government wants to impose the mining project on them because of the close relations between Lima and Beijing, reflected by a free trade agreement signed in April 2009. The trade deal was presented as a tool to affirm China’s position as the second purchaser of Peruvian exports, after the United States.
But the agreement does not include “any stipulations about environmental and labour standards, which is worrying in the light of the behaviour of the Chinese government and its companies in those fields,” Torres said.
One symbol of irresponsible practices by Chinese companies in Peru is Shougang Hierro Peru, which has been mining iron ore in the country since 1992, and has failed to fulfil its initial investment commitment with the Peruvian state.
The Chinese firm is also accused of causing pollution and flouting health standards and labour laws as well as the right of workers to form trade unions.
Moreover, local people in the district of San Juan de Marcona, where the mine is situated, have to get the company’s permission to obtain water, sanitation or electricity.
Read the full article: Milagros Salazar, IPS, 03 Feb 2010