HK firm promises 'Nicaragua Canal' between oceans by 2020

Feasibility research is underway for a spectacular new canal through Nicaragua, three times as long as the current Panama Canal, Wang Jing, owner of the Hong Kong-based company behind the project, said in Beijing on Tuesday.

The $40 billion canal is expected to start its six-year construction at the end of 2014, said Wang, chairman and owner of HK Nicaragua Canal Development Investment Co, adding that it will be 286 kilometers long and capable of bearing 400,000-ton cargo ships.

"Global trade has become so developed that the world needs a new canal," Wang said, adding that it is a dream Nicaragua has been pursuing for a century.

"The key for this region to gain a sustainable growth is its geographic advantage," Wu Baiyi, deputy director of the Institute of Latin American Studies under the Chinese Academy of Social Sciences, told the Global Times, adding that with a very simple economic structure, Nicaragua has to look at the benefits brought to Panama by its canal, completed in 1914 after decades of work.

A contract signed on June 14 with the Nicaraguan government allows the company to invest in the project and run the channel for 50 years with a possible extension of another half-century afterwards. "It doesn't matter if construction cannot break ground in 2014, and there is no way there will be a default," said Wang, offering assurances that the project is well-researched and promising to protect the environment.

The Chinese mainland currently has no formal diplomatic relationship with Nicaragua, and the Ministry of Commerce issued an alert in 2012 to Chinese businesses who were seeking to invest in the country. "This is purely a business deal, not representing the Chinese government," Wu said, adding that as newcomers to Latin America, Chinese companies, both State-owned and private alike, have to come out with a sound risk-control plan beforehand.