China Envisions ‘Dry Canal’ to Compete With Panama Canal

Beijing seeks to capture canal traffic revenue, challenge U.S. presence, and gain influence with new transcontinental railway project.

Brazilian President Luiz Inácio Lula da Silva (L) talks to Chinese Ambassador to Brazil Zhu Qingqiao at the Palacio do Planalto in Brasilia on Feb. 3, 2023. Sergio Lima/AFP via Getty Images

Commentary

In response to the Trump administration’s new U.S. policy of reasserting control over the Panama Canal, China and Brazil are exploring the possibility of building a transcontinental railway to provide an advantageous alternative to the Panama Canal. The proposed rail system would potentially run from Brazil’s Atlantic coast, perhaps Ilhéus, Bahia, to Peru’s Pacific coast at Chancay.