Nicaragua gives Chinese firm contract to build alternative to Panama Canal

[GAP]

Nicaragua gives Chinese firm contract to build alternative to Panama Canal
Project will reinforce China's growing influence on global trade and weaken US dominance over a key shipping route
Jonathan Watts and agencies,  guardian.co.uk, Thursday 6 June 2013
http://www.guardian.co.uk/world/2013/jun/06/nicaragua-china-panama-canal

Nicaragua has awarded a Chinese company a 100-year concession to build an alternative to the Panama Canal, in a step that looks set to have profound geopolitical ramifications.

The president of the country's national assembly, Rene Nuñez, announced the $40bn (£26bn) project, which will reinforce Beijing's growing influence on global trade and weaken US dominance over the key shipping route between the Pacific and Atlantic oceans.

The name of the company and other details have yet to be released, but the opposition congressman Luis Callejas said the government planned to grant a 100-year lease to the Chinese operator.

The national assembly will debate two bills on the project, including an outline for an environmental impact assessment, on Friday.

Nicaragua's president, Daniel Ortega, said recently that the new channel would be built through the waters of Lake Nicaragua.

The new route will be a higher-capacity alternative to the 99-year-old Panama Canal, which is currently being widened at the cost of $5.2bn.

Last year, the Nicaraguan government noted that the new canal should be able to allow passage for mega-container ships with a dead weight of up to 250,000 tonnes. This is more than double the size of the vessels that will be able to pass through the Panama Canal after its expansion, it said.

According to a bill submitted to congress last year, Nicaragua's canal will be 22 metres deep and 286 km (178 miles) long - bigger than Panama and Suez in all dimensions.
more on link

 

[Kat Stevens]

Chinese troops posted to control the Canal Zone?  Nope, can't see any potential problems there

 

[CougarKing]

The question is: will there be enough shipping traffic taking that route to justify the building of the second canal? Remember that a couple of years ago a news story broke that the worldwide shipping glut was such that a huge ghost fleet of merchant ships with unemployed crews was said to be anchored just off Singapore.

Such a canal might prove attractive to the United States if the builders made it large enough to fit a US Navy supercarrier, since CVNs normally have to go around Cape Horn since they can't fit through the current Panama Canal. But if Beijing will control the new canal, they won't be so open to the idea of American carrier groups going through their new canal whenever tensions rise over flashpoints like the Taiwan Strait...

 

[Edward Campbell]

The question is: will there be enough shipping traffic taking that route to justify the building of the second canal? Remember that a couple of years ago a news story broke that the worldwide shipping glut was such that a huge ghost fleet of merchant ships with unemployed crews was said to be anchored just off Singapore.

Such a canal might prove attractive to the United States if the builders made it large enough to fit a US Navy supercarrier, since CVNs normally have to go around Cape Horn since they can't fit through the current Panama Canal. But if Beijing will control the new canal, they won't be so open to the idea of American carrier groups going through their new canal whenever tensions rise over flashpoints like the Taiwan Strait...

There might be if the Nicaragua Canal can accommodate ships even larger than the New Panamax standard.

Some lines, including Maersk, are already operating container ships that will not fit in the New Panama Canal and many supertankers are in the same boat - forgive the pun.

 

[GAP]

Strategically, I can't see the US being happy with this.....it is a Chinese foothold in the Americas.

Economically, China can subsidize the hell out of the usage until it bleeds the Panama Canal into bankruptcy or the national equivalent....

What could go wrong?

 

[Edward Campbell]

Remember what Ronald Reagan did to the Russians ...

By the 1970s the inherent strains in communism ~ and the exact same strains exist in ALL socialist systems ~ were becoming to great to go untreated. The Russian government wanted to retain its power as a global military superpower and the Russian people wanted what they knew others had: decent food and housing, for a start.

In 1983 President Reagan proposed the Strategic Defence Initiative ~ Star Wars. The Russians, if they were to keep up, would have to deny their people even more, "make then eat grass," as the saying went at the time - and a revolt was a very, very real, indeed very likely product of that course of action, or Russia could, tacitly but publicly admit that it was, as it is, a regional military power, at best, with a broken economy and a second rate political system.

The comparisons are not exact but:

    1. America is badly overspent, if it wants to retain its strategic military power it must either -

        a. deny the American people entitlements to which they are very, very attached, or

        b. raise taxes, a lot, to compensate for the increased borrowing;

    2. China is sitting on a small ocean of US dollars that it wants to spend.

The foothold in the Americas is a bonus.

 

[GAP]

agreed.

American can't outspend China when China is using America's money.

 

[Retired AF Guy]

What could go wrong?

Ecological/environmental disaster waiting to happen. I can't the eco-weenies being in favour of this.

 

[CougarKing]

I find it ironic that mainland China is courting Nicaragua, one of the few remaining countries which recognize Taiwan as the "One China", instead of the mainland. Interestingly, Panama does not recognize mainland China as the "One China" either.

wiki reference:
Foreign relations of Taiwan: countries that recognize the Republic of China/Taiwan

Furthermore, according to this article below, Colombia and Costa Rica (2 nations which DO recognize mainland China as the "One China") have a pending territorial dispute with Nicaragua over the area where part of the canal will be built. So what happens if the International Court rules in favour of Colombia and Costa Rica against Nicaragua? No canal for China's COSCO shipping company and the PLA-N?

Nicaragua has accused Colombia and Costa Rica, which has a claim on territory likely to be used by the new canal, of trying to prevent the project going ahead.

Guardian link

 

[Old Sweat]

And to go waaaay out on a limb, could the Monroe Doctrine be applied in the case of China establishing a naval base in Central America? While China is not an European power, and the world has changed since 1823, Chinese expansion into the Americas might just upset Washington.

http://en.wikipedia.org/wiki/Monroe_Doctrine

 

[Retired AF Guy]

Furthermore, according to this article below, Colombia and Costa Rica (2 nations which DO recognize mainland China as the "One China") have a pending territorial dispute with Nicaragua over the area where part of the canal will be built. So what happens if the International Court rules in favour of Colombia and Costa Rica against Nicaragua? No canal for China's COSCO shipping company and the PLA-N?

Funny you should mention that. I was reading an article this morning that just after the above was signed, a Chinese ruled in favour of Nicaragua. Nothing suspicious there.

Sorry couldn't find the link.

 

[Edward Campbell]

And to go waaaay out on a limb, could the Monroe Doctrine be applied in the case of China establishing a naval base in Central America? While China is not an European power, and the world has changed since 1823, Chinese expansion into the Americas might just upset Washington.

http://en.wikipedia.org/wiki/Monroe_Doctrine

This is China's response to the Asian pivot: you put troops in Australia, we'll befriend Nicaragua.

 

[CougarKing]

Mr. Campbell,

Wouldn't another consequence of a Nicaragua Canal also mean the diversion of increasing traffic from the Northwest Passage? The implications of a Northwest Passage made navigable year-round by the retreating Arctic ice cap, as mentioned by academics like Michael Byers in books such as Who Owns the Artic?, would also have effects on Canada`s Arctic sovereignty interests.

For shipping companies that originate in Europe, the Northwest Passage is 7,000 km shorter than the current Panama canal route to Asia. The same goes for Asian companies that ship to Europe.  From Europe, travelling east through the Suez Canal is also longer at 21,000 kilometres.

Do you think that the lack of maritime traffic in the passage, partially caused by a Nicaragua Canal opening, might force Ottawa to reconsider the construction of its planned "Diefenbreaker"?

 

[Edward Campbell]

All good points and a good question, S.M.A..

If the Northwest passage becomes reliably navigable then I expect it to be used, for the vital economic reason - lower cost - you cite.

I suspect the Diefenbaker can survive on the  jobs! Jobs!! JOBS!!!" front, alone.

 

[tomahawk6]

Strategically, I can't see the US being happy with this.....it is a Chinese foothold in the Americas.

Economically, China can subsidize the hell out of the usage until it bleeds the Panama Canal into bankruptcy or the national equivalent....

What could go wrong?

The Chinese have long had a foothold in the Americas - Chinese restaurants. ;D
Seriously though, a second canal has long been a consideration but the cost may be prohibitive.

 

[Oldgateboatdriver]

You are asking Mr. Campbell, but I can answer that one.

The Nicaragua canal being considered here would have little to no noticeable impact on the distance between Asia and Europe when compared to the Panama canal. Its real impact is in the size of vessels it can accommodate.

Therefore, the savings in distances  (and time and money) that would result from the North-West passage being opened part of or all year long would be the same with regards to either the Nicaragua or the Panama canal and this would have no effect on the use of the NW passage.

This is China's response to the Asian pivot: you put troops in Australia, we'll befriend Nicaragua.

I do not think so. Closer collaboration between Washington and Australia is no surprise to Beijing and is of a military nature. This canal to be built by China is more indicative, to me anyway, of Beijing's view that the North-West or the North-East passages will not be available for year round traffic for quite a while and they need a further route to accommodate their always increasing volume of raw material intake.

I am absolutely certain that the Munroe doctrine will be explained to China on this one, in direct and no uncertain terms that would go like this: " You want to build this canal? Go ahead, but if we find a Chinese finger in the internal affairs of Nicaragua, we will cut it off at the elbow, or any military foothold? We'll cut it off at the knee. Are we clear on this?"

 

[Edward Campbell]

You are asking Mr. Campbell, but I can answer that one.

The Nicaragua canal being considered here would have little to no noticeable impact on the distance between Asia and Europe when compared to the Panama canal. Its real impact is in the size of vessels it can accommodate. ✔ agree

Therefore, the savings in distances  (and time and money) that would result from the North-West passage being opened part of or all year long would be the same with regards to either the Nicaragua or the Panama canal and this would have no effect on the use of the NW passage. ✔ agree

I do not think so. Closer collaboration between Washington and Australia is no surprise to Beijing and is of a military nature. ✘ not sure about that The Chinese are Australia's biggest trading partner, by a huge measure, and they have been trying to build closer and closer ties of all kinds with Australia. They are, I think "disappointed" with Australia's decision to agree to a permanent American military presence. This canal to be built by China is more indicative, to me anyway, of Beijing's view that the North-West or the North-East passages will not be available for year round traffic for quite a while and they need a further route to accommodate their always increasing volume of raw material intake. ✔ agree

I am absolutely certain that the Munroe doctrine will be explained to China on this one, in direct and no uncertain terms that would go like this: " You want to build this canal? Go ahead, but if we find a Chinese finger in the internal affairs of Nicaragua, we will cut it off at the elbow, or any military foothold? We'll cut it off at the knee. Are we clear on this?" ✔ agree But I think the Chinese will simply shrug and go about their business, as they already are in South America. The Chinese will not provoke the Americans militarily but they do not fear them. The Chinese position - with which I and many, many Americans agree - is that America cannot win a land war in Asia. And China will not - not for another generation, consider engaging the US maritime power.

 

[GAP]

I am absolutely certain that the Munroe doctrine will be explained to China on this one, in direct and no uncertain terms that would go like this: " You want to build this canal? Go ahead, but if we find a Chinese finger in the internal affairs of Nicaragua, we will cut it off at the elbow, or any military foothold? We'll cut it off at the knee. Are we clear on this?"

Easy peasy.....simply build your basic infrastructure so that it is dual purpose and large enough to accommodate, at any future date, placement of Chinese "defensive" forces/equipment.

Of course the US will see through it, but they operate on a "prove it" basis. They won't do a thing. They no longer have the "UMPH"

 

[muskrat89]

I think this is related to your discussion?

http://www.washingtontimes.com/news/2013/jun/7/china-encircles-us-arming-western-hemisphere-state/

China has been quietly taking steps to encircle the United States by arming western hemisphere states, seeking closer military, economic, and diplomatic ties to U.S. neighbors, and sailing warships into U.S. maritime zones.
The strategy is a Chinese version of what Beijing has charged is a U.S. strategy designed to encircle and “contain” China. It is also directed at countering the Obama administration’s new strategy called the pivot to Asia. The pivot calls for closer economic, diplomatic, and military ties to Asian states that are increasingly concerned about Chinese encroachment throughout that region.


Read more: http://www.washingtontimes.com/news/2013/jun/7/china-encircles-us-arming-western-hemisphere-state/#ixzz2VjYWIE5D
Follow us: @washtimes on Twitter

 

[Edward Campbell]

I think this is related to your discussion?

http://www.washingtontimes.com/news/2013/jun/7/china-encircles-us-arming-western-hemisphere-state/

Yes, indeed. Good catch.