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Dunno. That's an awfully high capital cost to compete with the Panama Canal--which will have a lot lower cost to expand its capacity to match a competitor's fea
by jccooper 12y ago
Dunno. That's an awfully high capital cost to compete with the Panama Canal--which will have a lot lower cost to expand its capacity to match a competitor's features (mostly extra size) if they turn out to be in high demand. The current Panama Canal expansion project is a $5B operation. No doubt another expansion (the "gargantuan locks project" or something) would cost more, but certainly not in the $50B ballpark.
Panama seems to make $1B/yr on the canal, even restricted as it is, so I can see where they're coming from if you believe in a strong and growing unmet demand (for very large ships). But with the existing competition you really have to believe in a level of traffic that will saturate the Panama Canal in any reasonable expanded configuration. And probably the Suez as well.
And I'd be very worried about the Northwest Passage.
- vacri 12y agoThe article suggests that the money is actually being supplied by the Chinese government - $50B is nothing to establish a strong political foothold in the area. Or even provide a rationale for military bases to defend such expensive infrastructure.
- adventured 12y agoThe headline number certainly jumps out, but $50b spaced over, say, ten years is definitely no particular problem for China (or any major economic power for that matter). The Panama Canal cost between $7b and $10b in today's dollar ($375m originally), and of course thousands died in the process of construction. Between higher labor and material costs, making this much larger, nicer, and avoiding thousands dying, a $40b or $50b cost wouldn't be surprising.
- Htsthbjig 12y agoIt has nothing to do with economics. It is about strategy. US is the US of America because of the Panama channel, without it transporting something from coast to coast is so expensive. That is the reason they basically invaded Colombia and make independent Panama (from Colombia, it made it dependent of the US). Now, while in theory Panama is now independent from the US, in practice it is not. If the US wants to create sanctions to those that treat the petrodollar or US hegemony, like Russia(now) or China(tomorrow), and make their commerce with West Africa-Europe and Brazil way more expensive, they could simply close the Panama channel to those countries. This is unacceptable for China. So China (and Russia) wants an alternative. It is also a good way to spend their huge stockpile of US dollars China has that loses value with each Quantitative easing.
- rtpg 12y ago>If the US wants to create sanctions to those that treat the petrodollar or US hegemony, like Russia(now) or China(tomorrow)... I think saying that Russia is an economic threat to US hegemony is a bit misplaced. In international trade, Russia has as much trade volume as Spain (which is around 1/5 of the trade volume of China/EU/US). In the one area it does dominate (Natural Gas), basically all of it goes to the EU anyways. So at best Russia could help create a petroeuro (because Russia certainly doesn't have the international trade necessary to cancel out energy price volatility,so using the rouble would be very dangerous) Besides, Russian use of the Panama canal is practically nil (they don't show up in the top 25 countries using it, in country of origin or destination). They have enough land routes to most of the big economies already.
- chatmasta 12y agoChina has trade volume, Russia has a military. Together, they form a powerful adversary.
- philwelch 12y agoCanada has a large, defensible landmass, vast oil reserves, and cutting edge technology. North Korea has a huge army and nuclear weapons. Together, they form a powerful adversary.
- Natsu 12y agoCan't be too careful, they are the only country that ever managed to burn down the White House...