China’s Rail Building In Colombia Looks East And North

The long-term significance of the proposed rail link between the Atlantic and Pacific Oceans that the Financial Times reports China is in talks with Colombia to build and finance may not lie so much in exporting Colombian coal but Venezuelan oil, and providing Chinese exporters a new route to U.S. east coast ports.

The so-called dry alternative to the Panama Canal is one of several transport projects the Chinese and the Colombians are investigating. Most advanced, according to the FT report, is a 791 kilometers railway and expansion of the Pacific port of Buenaventura. The $7.6 billion project, funded by the Chinese Development Bank and operated by China Railway Group, would be capable of carrying up to 40 million tonnes of cargo a year, both outbound Colombian natural resources and inbound Chinese semi-manufacturers. Should Washington ever ratify a long-stalled free-trade agreement with Bogota, Colombia would become an important access point for exports to the U.S. market.

At the same time China is already buying oil from Venezuela to the east. China National Petroleum Corp. last year struck deals with PDVSA, Venezuela’s national oil company, to develop the Orinoco Belt oil field which extends from northern Venezuela out into the Atlantic and to explore for oil in southern Venezuela. The eventual output from both will need transporting to Pacific ports for transshipment to Asian markets. Colombia’s will be closest and potentially best connected thanks to the proposed rail lines. “Colombia has a very important strategic position, and we view the country as a port to the rest of Latin America,” Gao Zhengyue, China’s ambassador to Colombia, told the FT.

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Filed under China-Latin America, China-U.S., Trade

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