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In 2011, China will have its own “Panama Canal”.

China dreams of controlling the trade in Latin America, and the way to do it is to compete with the Panama Canal.   China wants to create an alternative to Panama.

Panama Canal

One of the possibilities is constructing a canal through Nicaragua.

But a mnore realistic project is to build a railway that would interconnect the Atlantic and Pacific oceans through Colombian soil.

It will be a ‘dry canal’ of  more than 200 miles. The estimated cost of the project is 7,700 million dollars, and the chinese are willing to invest in the project.

The projected railway depart from the Pacific Ocean, near an “futuristic” port in Buenaventura. The port already exists but will be expanded and upgraded. The railway will end on the Caribbean Coast, in a newbie port located south of Cartagena.

China will use the railway and the two ports as imort/export hubs for the new chinese assembling factories and also for the export to China of raw materials and minerals like the vast reserves of coal located in northern Colombia.

“It’s a real proposal, and is quite advanced,” told the president of Colombia, Juan Manuel Santos, to the Financial Times. “I do not want to create an exaggerated expectation, but it is a project that makes sense. [China] has carried out studies on transport costs per tonne and investment costs and everything fits, “he said.

These words of Santos brought to public light a plan that China wanted to keep secret.

Both chinese authorities in Beijing and the Chinese newspapers barely mentioned the project.

Some analysts in Beijing  are certain that China will begin building the railway this year with the funding of the Chinese Development Bank, one of the principal organs of state investment.

The Panama Canal (80 km long) represents near 5% of world trade, with more than 13,200 ships passing through each year. But it is the only way to jump from one ocean to another. United States already has a railway line between California and the East Coast, faster but more expensive than the canal.

The viability of the Chinese project, then, is a mystery, although it can be seen as another step in its positioning as a major economic player in Latin America.

China needs to give an outlet for its exports and looks with disgust the obstacles that the Panama Canal, always crowded, too expensive and unable to accommodate large freighters, is for access to the Atlantic. So, China could have chosen to assume the risks of having its own trade channel.

China is today the main trading partner of Colombia reaching U.S. $ 5 billion in 2010, in second place the U.S.