A major South American infrastructure deal is in the works as China’s prime minister tours the region this week. Beijing is hoping to back and build an ambitious interoceanic railway between Brazil and Peru that could make for faster, cheaper transportation of local commodities to resource-thirsty Chinese markets. It’s an unprecedented project in Latin America that’s already raised some flags over environmental and human rights risks, and analysts say it could be the biggest test yet of China’s growing relationship with the region.
The proposed rail link, known as the Twin Ocean Railroad, would connect Porto do Açu, a Brazilian Atlantic port, with Peru’s Puerto Ilo on the Pacific Ocean through some 3,300 miles (5,300 km) of rail. The railway is expected to cut transportation time and reduce the cost of shipping grain from Brazil to China by about $30 a ton, Brazilian officials told Reuters last year. China is a major trading partner for both countries: Brazil is a top exporter of iron ore and soybeans to China, while the biggest share of Peruvian exports — primarily minerals like gold and copper — also goes to Chinese markets.
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