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Economic Expansion of China in Latin America, alternatives to Panama Canal

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  • Economic Expansion of China in Latin America, alternatives to Panama Canal

    When I read about it and thought a little it made sense. Panama Canal while in place and in good use is limited. Even with the recent expansion that should come through in the next few years. My feeling is the rail purchase in Panama, and investment into Columbia's rail and other infrastructure sets up the whole region for a greater volume of trade with Asia. The problem is things actually being developed and more importantly used post-facto.

    Panama Canal Expansion Project Called `Disaster' in U.S. Diplomatic Cable - Bloomberg

    An alternative to the Panama Canal? | PRI's The World
    Rather than a waterway, Colombia and China are discussing a so-called “dry canal.” It would consist of about 150 miles of railroad linking Colombia’s Pacific coast to a new Atlantic port that would be built near the city of Cartagena. The railroad would make it easier for China to import Colombian commodities, like coal, and to export Chinese electronics and other goods to the region.
    Colombia, China plan rail alternative to Panama Canal - Colombia news | Colombia Reports
    Nevertheless, other analysts are skeptical of the economic benefit of a "dry canal" linking both oceans. A shipping executive told the FT newspaper that moving containers onto and off the rail link at either end would probably cost $200 each in addition to $100 fees for the rail transport. In comparison, fees for the canal are around $100 a container.
    My feeling is that most traffic will be one way or value added. Ergo Chinese enterprises can set up shop in both ports and import either finished goods for export or partly completed material and add local labor/material to re-export value added things. Development of Coal deposits and other raw materials from inland makes it more realistic this is mentioned in the article in relation to coal at least.

    Colombia optimistic about approval FTA and trade preference - Colombia news | Colombia Reports
    I get a feeling this is a playing off into the trade leverage space.
    Originally from Sochi, Russia.

  • #2
    Chinese imports disrupt Colombian textile industry - Wire - Lifestyle - bellinghamherald.com
    Good story a recreation of what happened in the U.S. with the textile industry being non-competitive vis-a-vis asian imports. Just to add more perspective to the above, if anyone actually reads what I post.

    MEDELLIN, Colombia Trade with China may be helping to lift Colombia's economy to new heights, but don't ask Alvaro Hincapie to sing the Asian dragon's praises.

    Legal and illegal Chinese textile imports have clobbered Enka, the textile company he runs in Medellin, and forced him to refocus operations to rely more on recycled, environmentally friendly threads.

    Industrywide, Colombia's textile and apparel makers saw sales slump 13 percent to $6.1 billion last year from $7 billion in 2008 - and there is little sign the slide is ending.
    Originally from Sochi, Russia.

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    • #3
      If the ships are going to call on this Pacific port (not a small consideration), unload, load the containers (one presumes) onto rail cars, move them across the continent, unload the rail cars, and finally load the goods on ships that call on the Atlantic port (see above), there is going to have to be one heck of a lot of value added during the train ride. It simply would not make economic sense any other way.

      Mobile factories, anyone?
      Trust me?
      I'm an economist!

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