China and Brazil signed a memorandum of understanding, Chinese state media reported on Wednesday, to explore the possibility of jointly building a transcontinental railroad from the east coast of Brazil to the west coast of Peru — directly to a port funded and partially owned by Beijing.
The Chinese state-run Global Times cited trade experts who predicted that the completed railroad could “shorten export times from Brazil to Asia by up to 10 days” and potentially offer an “alternative to the Panama Canal” for China to ship its goods to Atlantic ports.
“There is a strong possibility that the cross-continental railroad will become a reality in the future, Jorge Viana, CEO of Brazilian Trade and Investment Promotion Agency… told the Global Times in May,” the newspaper relayed. “Viana said the railroad would almost open an alternative to Panama Canal, as the railway would enable Brazilian goods to be transported directly from Peru to Shanghai Port in China, without taking detours.”
The Panama Canal, built by the government of the United States, has experienced a growing presence of Chinese regime-linked businesses, prompting alarm from the Trump administration. Trump vowed prior to taking office in January that he would focus on erasing the nefarious Chinese communist influence in and around the Canal and restore security to the Canal zone with the cooperation of the government of Panama.
“Look, the Panama Canal is vital to our country. It’s being operated by China. And we gave the Panama Canal to Panama; we didn’t give it to China. And they’ve abused it. They’ve abused that gift,” Trump said at a press conference in January prior to his inauguration.
Defense Secretary Pete Hegseth said in April that the Trump administration would, with the help of the Panamanian government, “take back the Panama Canal from China’s influence, and we will do this along with other capable like-minded allies and partners. This is what ‘peace through strength’ looks like.”
The plan to connect the east and west coasts of South America would require prodigious engineering work in one of the most inhospitable environments for such a project — the Amazon Rainforest, which covers much of the heart of the continent. The Chinese government, through its Belt and Road Initiative (BRI) infrastructure scam, has caused massive environmental destruction in much of the underdeveloped world, particularly in Africa and Southeast Asia. Panama exited the BRI in February following a visit by Secretary of State Marco Rubio.
The Brazilian Transport Ministry acknowledged in its announcement of the first phase of a potential deal on Monday that environmental studies would be required to ensure viability of the railway. It specified that the agreement was with the China State Railway Group, which it described as a “strategic branch of the largest public railway corporation in the world.”
Brazilian Railway Transport Secretary Leonardo Ribeiro described the agreement as “not just a formal gesture, it is the first step in a technical, institutional, and diplomatic journey that seeks to bring continents closer together, reduce distances, and strengthen ties.”
China and Brazil have maintained friendly relations throughout both right-wing and left-wing governments. While former President Jair Bolsonaro campaigned on making the Brazilian economy less dependent on China, he ultimately governed as a China-friendly leader, inviting Chinese businesses and thanking China for sending coronavirus vaccine ingredients to the country.
Current President Luiz Inácio Lula da Silva — who was imprisoned and sentenced to 25 years in prison on charges of corruption related to overpriced infrastructure contracts — has made much more forceful efforts to bring Brazil deeper into China’s orbit and away from its traditional Western allies. Lula visited China in April, seeking closer business ties, but Chinese dictator Xi Jinping has yet to return the favor, skipping this year’s BRICS leadership summit in Rio de Janeiro.
Xi was most recently in Latin America in November, visiting Peru for the opening of the Chancay port which China helped construct and partially owns through a BRI deal. The Chancay port reportedly benefitted from a $1.3 billion Chinese investment and is majority owned by China’s Cosco Shipping.
“China is willing to work with the Peruvian side to take the Chancay project as a starting point to forge a new maritime-land corridor between China and Latin America and connect the Great Inca Trail,” Xi said during his visit.
The Chancay port project was concluded under the administration of former President Joe Biden, which never developed a coherent Latin America foreign policy and largely ignored the region. At the time, Peruvian Trade Minister Ursula Leon complained that America was “missing opportunities” to invest in the country, leaving the way open for China.
In Brazil, the Global Times claimed on Wednesday that the Lula government has expressed significant interest in a Chancay-level investment at home. The project in Peru, it claimed, “has reignited Brazil’s interest in enhancing connectivity with China.”
Follow Frances Martel on Facebook and Twitter.
Read the full article here