Panama and BlackRock "tragedy": The restart of the South American "Two-Ocean Railway."

According to a compilation report by South China News Network on October 30, 2024, the Panama Canal Authority released its latest annual report on September 25, 2024. The report shows that in the 2024 fiscal year [October 1, 2023 - September 30, 2024), the total revenue of the Panama Canal reached $4.986 billion, an increase of 1% compared to the previous fiscal year, with an additional $18 million. Despite the severe drought affecting channel operations, the revenue of the Panama Canal still achieved positive growth.

This is the main reason why former President Trump kept a close eye on the Panama Canal. For asset management company BlackRock, this is a project with very strong cash flow. It must be pointed out that China is the second-largest customer of the Panama Canal, and any alternative route will dilute the future income of the Panama Canal.

The website Gizmodo Brazil published an article titled 'China's Restart of the Mega Railway Project in South America Could Radically Change International Trade' on April 19 (see the second screenshot), written by Alexandra Lima dos Santos.

In 2024, the deep-water port of Callao in Peru was launched. Whether it can play a key role depends on whether the inland logistics behind the port can cooperate. Here, logistics refers to the "Two-Ocean Railway" (Twin Ocean Railway, TOR) planned by China with Brazil, Peru, and other countries. This railway will cross South America, connecting the Atlantic and Pacific Oceans.

The Two-Ocean Railway plan can be traced back to the 1960s, proposed by leaders of Latin American countries. However, due to various economic and geographical restrictions, the plan has never truly started. China hopes to incorporate the "Two-Ocean Railway" into the "Belt and Road" initiative to deepen economic cooperation with Latin America. The project requires at least $50 billion in investment.

In 2014, China and Peru agreed to conduct feasibility studies on this railway, which crosses the Amazon River and the Andes Mountains and is over 3,000 miles long. China believes that the Two-Ocean Railway will reduce the transportation costs of grains and minerals and enable China to export production capacity and make investments. Additionally, once completed, the railway will significantly speed up the exports of Brazilian iron ore and soybeans and can directly transport grain and raw materials from Peruvian ports to Asia's largest market – China.

The website Gizmodo wrote: "China is not limited to railway projects. A Chinese grain enterprise [the name of the company is omitted here - Editor's note] will also invest $486 million to expand the Santos Port terminal, which will go into operation in 2026, capable of transporting up to 14.5 million tons of agricultural products annually. Moreover, COFCO has purchased freight cars and locomotives to optimize the internal transportation of Brazilian grain."

With the Two-Ocean Railway, future goods from South America, such as iron ore and grain from Brazil, will no longer need to detour through the crowded and geopolitically risky Panama Canal.

As the article concludes: "Meanwhile, China continues to expand its strategic influence in Latin America, making direct investments in infrastructure construction, which is crucial to the development of the region, and constantly strengthening cooperation."

Original source: https://www.toutiao.com/article/1830036473422852/

Disclaimer: This article solely represents the views of the author.