By Pedro Alarcón
Peru is the regional epicenter of the geopolitical dispute between China and the United States not only for securing access to critical raw material for the energy transition (which are abundant in Peru), but also for supremacy over the so-called backyard. What are the international orientations of the presidential candidates facing the June 7 runoff election?
Amidst an avalanche of 35 presidential candidates, Keiko Fujimori and Roberto Sánchez advance to the runoff election with 17.19 and 12.04 percent of the vote, respectively. Recent polls show a close race.
More than running an effective campaign, the finalists bet on the ‘anti-vote’. On the one hand, Keiko of right-wing Fuerza Popular, who leads in Lima and urban areas of the North of the country, appeals to the fears for communism and state interventionism in value-conservative and market-liberal Peru. Thereby, she points directly at leftist former president Pedro Castillo, who is seen as Sánchez’ political predecessor. Castillo was convicted for attempting to dissolve congress to avoid impeachment only 16 months after winning the 2021-runoff election against Keiko herself.
On the other hand, Sánchez of left-leaning Juntos por el Perú, who has the vote of the Andes, and leads in the rural areas particularly in the South of Peru, calls for a change while accusing his opponent of having ruled from congress and hence being responsible of the country’s political instability that translates in having eight presidents in a decade (seven of them in jail or facing accusations that reach from embezzlement to money laundering). Sánchez often invocates the shadow of Keiko’s father, Alberto, who ruled the country with an iron fist between 1990 and 2000. The name Fujimori is not best remembered for paving the way for Peru’s current neoliberal path than for leading the dirty war against Sendero Luminoso.
Due to rising insecurity, the domestic agenda of the presidential candidates has overshadowed discussions on international relations. However, some episodes involving China and the US, in which the powers show ‘concern’ about Peru’s sovereignty, have triggered debates about a possible shift in international alignment, currently weighted toward China. What are the finalists’ different international orientations?
…some episodes involving China and the US, in which the powers show ‘concern’ about Peru’s sovereignty, have triggered debates about a possible shift in international alignment, currently weighted toward China.
China’s current prevalence can be traced back to 1992 when Shougang Corporation of Beijing acquired state-owned Hierro Perú amidst the privatization wave conducted by Alberto Fujimori. Hierro Perú was established in 1975 following the nationalization of US-Marcona Mining Company by the self-styled Revolutionary Government of the Armed Forces (1968-1975), which sought to finance a domestic industrialization project with Peru’s natural riches. The abundant iron deposits of the region of Marcona were concessioned to US capitals during the 1950s, when it was commonsense that the Peruvian extractive sector was a prolongation of the US economy.
Nowadays, more than half of all Chinese investment goes to the mineral sector, which turned China into Peru’s leading partner in foreign direct investment. Since 2011, when it surpassed the United States, China is Peru’s main trading partner as well. More than one third of all Peruvian exports go to China; amidst the snowballing demand triggered by the energy transition, minerals and metals account for about 90 percent of these exports.
Nowadays, more than half of all Chinese investment goes to the mineral sector, which turned China into Peru’s leading partner in foreign direct investment.
US’ attempts to regain lost ground take place under a close look of China. In April, Peru sealed a $3.5 billion deal for 24 F-16 jets. Following interim President Balcázar’s attempt to defer the purchase to the next government, Bernie Navarro claimed that Peru is “undermining US interests”. The Peruvian minister of finance promptly moved ahead with the initial payment and the ministers of defense and foreign affairs resigned. At that time, the move might have been triggered by the fears for the possibility of Sánchez reaching the runoof. China Ambassador Zhu Jingyang accused his US colleague of using plain coercion. Navarro responded that China follows the script of Little Red Riding Hood. The Chinese ambassador replied that it would take more than a fairy tale to break the relationship with Peru and accused the US of being the actual wolf.
US’ attempts to regain lost ground take place under a close look of China.
In the beginning of 2026, the US State Department announced US$1.5 billion support for relocating the Callao Naval Base. A main outcome is the expansion of the commercial port of Callao, the main competitor to the Chancay mega-port. Inaugurated in 2024, and with an initial investment of US$1.3 billion, Chinese-controlled Chancay is a masterpiece of the Belt and Road Initiative.
Shortly after a statement of the Trump administration regarding Chancay warned that the price of “cheap Chinese money” is the loss of sovereignty, the US Ambassador to Peru Bernie Navarro posted a photo on social media sharing a hamburger with then-President José Jerí. The caption “changing the menu” alludes also to the president’s clandestine meetings in a chifa (Chinese Peruvian restaurant) with Chinese contractors. A week later, the ‘chifagate’ caused Jerí’s impeachment.
The pursuit of geopolitical supremacy comes alongside the race to secure access to critical minerals for the green transition. Without an industrial strategy, natural resource abundance is the curse that dooms Peru to depend on transnational capital. Both candidates fell the pressure of making the most of the snowballing global demand of critical minerals by bringing wealth to the places that were never reached by the benefits of Peru’s extraordinary mineral riches and to the territories that rather suffer the social and environmental consequences of natural resource extraction.
The pursuit of geopolitical supremacy comes alongside the race to secure access to critical minerals for the green transition.
Keiko promises to focus on the generation of wealth, which is ultimately to thank to Peru’s extraordinary natural endowments. Here, foreign direct investment (FDI) is key, no matter where it comes from (so the rules of neoliberalism) so far it benefits a few local gatekeepers. With hindsight, this model generates wealth while fueling inequality. Peru’s sound macroeconomic indicators, the best credential for FDI, contrast with 70 percent of informality in the economy. Informal economy is not less increased by the fact that, to attract investors, governments tend to relax local regulation on worker’s protection and social security. In case of winning the election, conservative values (e.g. regarding same-sex marriage and reproductive rights) promoted by Keiko Fujimori will determine an affiliation with the US. Not in vain the MAGA-movement has been promoting right populist leaders across the region like in neighboring Ecuador. Further, Keiko supports the militarization of internal security strategies. US Marines are already inland due to an agreement sealed by congress in December 2025.
With an agenda focused on the redistribution of wealth, Sánchez’s government offers to perform the balancing act of enforcing domestic industrial policy while further attracting FDI. Sánchez is seen as the bannerman of the left-leaning movements that ruled South American countries during the twenty-first century commodity boom. Therefore, he is expected to deepen ties with China. Different than in Bolivia, Brazil or Venezuela, where the marriage with China took place amidst the anti-US rhetoric of ‘pink tide’ governments, in Peru, China’s influence begun to thrive due to free-market reforms. Besides, China is greedy for raw material, this might crash into Sánchez’s industrialization strategy.
On July 28, a new president will be sworn in. The imperative that is long overdue for the global powers: Peru will have to pick sides.
Pedro Alarcón is a Global Forum Democracy and Development (GFDD) research fellow. His research lies at the crossroads of climate change, energy and society, particularly in Southern Africa, Andean countries and the Philippines.
This article is published under the sole responsibility of the author, with editorial oversight. The views expressed do not necessarily reflect those of the editorial team or the CEU Democracy Institute.
