mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Chinese Company To Build Huge Canal in Nicaragua


Nicaraguan lawmakers approved a plan by a Chinese investment company to build a massive canal from the Caribbean Sea to the Pacific yesterday, even though the plan contains no specific route and virtually no details on financing or economic feasibility. Nicaragua is one of the western hemisphere’s poorest countries, and its government is dominated by supporters of President Daniel Ortega, a leftist revolutionary leader who has ruled the country essentially as president for life since 2006. The canal, Ortega and his supporters say, will turn Nicaragua’s fortunes around.

“Today is a day of hope for the poor of this country,” said Edwin Castro, a member of Ortega’s party.

The Chinese company that submitted the $40 billion plan is headed by Hong Kong lawyer Wang Jing, whose only other professional experience appears to be in the telecommunications industry. His plan to develop Nicaragua also includes airports, two free-trade zones, a railway, and an oil pipeline, Reuters reports.

Despite questions about the practicality and economic sense of building such a canal—the site was studied but eventually rejected by the builders of the Panama canal to the south—the project makes sense for China. It builds on Beijing’s recent overtures to Caribbean and Central American countries, countries historically tied to the US and Europe. Amid ongoing European financial instability and American focus on the Middle East and Asia, China has begun to assume the role of benevolent, rich benefactor in America’s backyard. Once operational, the canal would also diversify China’s options in importing energy and other resources and increase access to Latin American commodities.

Wang Jing is very optimistic about the project: “We believe that by 2030—just over 16 years from now—the volume of trade addressable by the Nicaragua Canal will have grown by 240 percent from today,” his company said in a statement. “The total value of goods transiting the combined Nicaragua and Panama canals could exceed $1.4 trillion, making this one of the most important trade routes in the world.” But a top official at the Panama Canal Authority sounded a note of caution: “We get questions of hypotheticals every day, ‘What happens if the Arctic melts, if manufacturing is moved from China to Mexico.’…Until we really see the plans and understand the investment, all we know is that they talk about $40 billion. It’s very, very early.”

Features Icon
show comments
  • Atanu Maulik

    Perhaps China is getting tired wasting trillions on building ghost towns and shopping malls with no shops inside China. Now they want to stimulate some faraway countries. Any ways it will be within easy reach of the US navy…just in case.

    • Corlyss

      They’re tweaking us. Iran does that to Russia: building up infrastructure in Azerbaijan and other close former SSRs.

      • Atanu Maulik

        China is entangling itself fully into an US led international order. This is good and should be encouraged. This will actually make sure that China will have less of an incentive to overturn that order in some fit of insanity and in case they do try, it will be much easier for the US to give it the “German treatment”(as given to Germany in World wars). It is actually more difficult to control nations which has nothing to lose (e.g. North Korea).

  • Corlyss

    It might turn Ortega’s fortunes around and those of his cronies. It won’t do a thing for Nicaraguans, just as he’s done nothing for Nicaraguans except kill ’em.

  • Tom Chambers

    The concept of the Nicaragua Canal was raised as recently as the 1960s, because of the limitations of the Panama Canal—its locks were already too small. The idea at the time was that the US could use nuclear explosives to blast a sea-level (no locks) canal across Nicaragua. The Chinese won’t use nuclear explosives (I don’t think) but, if they can build it, ships will come.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service