In recent years, Chinese investors have been promising one of the most ambitious infrastructure projects in history: a rival to the Panama Canal, routed through Nicaragua. And though Wang Jing, the billionaire backing the canal, lost 84 percent of his net worth in the recent Chinese stock market collapse, Wang’s aides say he isn’t giving up on the project. Bloomberg:
The company said that despite the economic setbacks and local protests against the canal’s construction, the project is moving forward. “I have no doubt that appropriate financial arrangements will be in place before construction commences,” Bill Wild, HKND’s chief adviser for the canal, said in an e-mailed response to questions. Company representatives for Xinwei declined to comment on Wang’s personal investments and declined a request for an interview with Wang.
Color us skeptical. Back in August, Bloomberg reporters visited Nicaragua but were unable to find much evidence of progress on the canal. Between that news and this development, we’re unconvinced that China’s $50 billion dreams will be realized. (The idea for the canal, by the way, has been floated for hundreds of years, and was under somewhat serious U.S. government consideration in 1929.)
Over the past decade, Chinese companies have been laying the groundwork for grandiose construction projects in developing countries, including in South America—where, since the Monroe Doctrine, world powers have often deferred to Washington. Now that China’s economy is faltering, it is likely that many of these ambitious efforts will either publicly be cancelled or quietly put on the back burner. Countries like South Africa, Nigeria, and Brazil are already reeling from the consequences of reduced Chinese demand for their commodities. They are likely to get hit again as Chinese plans for investment and infrastructure development are suspended.