14 Feb, 2011

China discussing Panama Canal replacement

China is said to be toying the idea of building an alternative to the Panama Canal that would link Colombia’s Atlantic and Pacific coasts by rail, in an attempt to spur Congressional approval of a US-Colombia free-trade pact.

“It’s a real proposal, and it is quite advanced”, said the Columbian President Juan Manuel Santos. The studies that the Chinese have made on the costs of transporting per tonne, as well as the cost of investment, all work out, he added.

The 220km “dry canal” would run from the Pacific to a new city near Cartagena, where imported Chinese goods would be assembled for re-export.

The mooted rail link also marks China’s increasing aggressive lending to the developing world. Notably, over the past two years, Chinese banks have lent more to developing countries than the World Bank. “Asia is the new motor of the world economy”, Santos said.

Colombia has long dreamt of building an alternative to the Panama Canal. The country is the US’s closest ally in South America, but Bogotá is frustrated by Washington’s stalling over a free-trade agreement which was signed by both governments four years ago, but yet to be ratified by the Congress.

Notably, bilateral Sino-Colombian trade has soared from $10 million in 1980 to more than $5 billion in 2010, marking China as Colombia’s second-biggest trade partner after the US.

“Colombia has a very important strategic position, and we view the country as a port to the rest of Latin America”, said Gao Zhengyue, China’s ambassador to Colombia.

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