MercoPress. South Atlantic News Agency

Peru joins railroad project to Chancay to boost Chinese trade

Viana insisted that the railroad was an alternative to the Panama Canal

Peru has joined Brazil and China's transcontinental railroad project to connect the Pacific coast with the Atlantic Ocean across South America, offering an alternative trade route to the Panama Canal. This railway aims to facilitate the transport of Brazilian goods, such as soybeans and minerals, to China’s Shanghai port via Peru’s Chancay port, reducing maritime trade distance by about 10,000 km and easing reliance on Brazil’s congested Santos port.

Peru is promoting a modern railway system to enhance regional connectivity, while Brazil sees it as a strategic opportunity to boost trade with China, its largest trading partner (over US$160 billion in 2023). The project, requiring a US$ 1.3 billion investment, is supported by Chinese President Xi Jinping as part of China’s Belt and Road Initiative. Environmental concerns in the Amazon and indigenous lands are being addressed, with Brazil rejecting a shorter, ecologically sensitive route.

Peru's Economy Minister Raul Pérez Reyes said his country promoted a modern and efficient railway system. He made these announcements after a meeting with representatives of the National Railway Administration (NRA) of the People's Republic of China, headed by Fei Dongbin, and with the Chinese ambassador to Peru, Song Yang.

The encounter was also attended by Peeru's Transport and Communications Minister César Sandoval, the Deputy Finance Minister Erick Lahura, and Deputy Transport Minister Ismael Sutta to promote projects that strengthen road connectivity and the development of the national railway system. The South American country's Transport Ministry also pointed out the importance of advancing in the bioceanic interconnection project that includes a railway connection to Pucallpa.

The reestablishment of a more expeditious route in the Pacific Ocean for trade between Brazil and China has been planned since 2014. The development of the Port of Chancay and other infrastructure would facilitate the new route through Peru.

Meanwhile, Brazil recognized important opportunities to strengthen connectivity with China, through the Port of Chancay, so the Brazilian government expressed interest in reviving the transcontinental railway project.

The director of the Institute of Developing Countries of the China Institute of International Studies in Beijing, Wang Youming, reiterated China's capacity as an ideal partner for both Brazil and Peru and the potential in infrastructure, equipment manufacturing and experience in railroad construction. In his view, the relationship between Brazil and China “is very strategic” because “we want to learn and attract more investments to Brazil. We want more railroads, more subways, more technology...”.

Brazilian Export and Investment Promotion Agency Executive Director Jorge Viana insisted that the railroad was an alternative to the Panama Canal, allowing Brazilian goods to go directly from Peru to the port of Shanghai in China.

Last week, Chinese leader Xi Jinping gave his blessing to the undertaking. Brazil's Planning Minister Simone Tebet highlighted the initiative's advantages.