EXCLUSIVE: China Dangerously Close To Circumventing The Panama Canal, Alarming Report
China is accelerating efforts to expand its footprint in Latin America by backing major infrastructure projects designed to sidestep the Panama Canal, according to a new report released Tuesday.
The report, published by China-focused consulting firm Horizon Advisory, details Beijing’s deepening ties with Peru and Brazil to advance two interconnected megaprojects: the new Chancay Port on Peru’s Pacific coast and a proposed 3,000-mile transcontinental railroad through Brazil. Together, these projects would give China direct shipping access to the Atlantic Ocean, reducing reliance on the U.S.-controlled Panama Canal.
“We’re 20 years behind China having its fingers in the Panama Canal,” said Nate Picarsic, senior fellow at the Foundation for Defense of Democracies and co-founder of Horizon Advisory. “As we finally start competing there, they’re already building massive new projects in Peru that will let them bypass the canal entirely.”
The Chancay Port, developed through heavy investment by China’s state-owned COSCO Shipping, began operations in November 2024 as part of Beijing’s Belt and Road Initiative (BRI). COSCO executives acknowledged this summer that demand for shipping through the port has grown faster than expected.
While Beijing promotes the BRI as a “win-win” for partner countries, the Horizon Advisory report argues that the projects bind local economies to Chinese markets, creating long-term dependence on Beijing.
The proposed Bi-Oceanic Railway would link the Chancay Port to Brazil’s Atlantic coast, potentially cutting shipping times for Brazilian exports more efficiently than routes through the Panama Canal. Analysts warn the project could give China greater economic and strategic leverage in South America.
Picarsic praised the Trump administration for prioritizing hemispheric security, saying Washington must move quickly to counter Beijing’s influence: “The direction is right — solidify our foundation in the hemisphere and guarantee security and prosperity in our neighborhood. But execution will be key.”
The report urges the U.S. to respond not only by competing economically, but also by confronting what it calls China’s “military-civil fusion apparatus” driving these projects.
A State Department spokesperson told the Daily Caller News Foundation the U.S. is closely monitoring Beijing’s activities and cautioned regional governments about the risks of Chinese investment. “We encourage host countries to exercise absolute sovereignty over their critical infrastructure and resist the pull of Chinese investment that undermines local economies and labor,” the spokesperson said.
The Chinese Embassy did not respond to a request for comment.
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