Managua approves the construction of a new canal linking the Pacific and the Atlantic. Funded and managed by China, the new canal is also response to Taiwan's influence in the region. In his first official visit to the region, Xi Jinping lays out China's Latin America policy.

Managua (AsiaNews/Agencies) - Nicaragua's National Assembly voted 61 to 28 in favour of a plan to build a canal between the Pacific Ocean and the Caribbean Sea. A Hong Kong-based company was chosen to carry out the project. For shipping, the new waterway would provide an alternative route to the existing Panama Canal.

"One of Nicaragua's great riches is its geographic position, that's why this idea has always been around,'' government MP Jacinto Suarez said in the house on Thursday. "Opposing it is unpatriotic,'' he added.

From the early 20^th century onward, plans to build a canal link to Lake Nicaragua have made but never realised. Instead, when the US-funded Panama Canal opened in 1914, Nicaragua's dreams were dashed, until now.

Although environmentalists are against the canal because it would go through Lake Nicaragua, Nicaragua's President Ortega has found a rich ally in mainland China to build it.

A Chinese company, the Hong Kong Nicaragua Canal Development Investment Co, was granted a 50-year concession to build the waterway. The latter could be extended for another 50 years once the canal is operational.

Under the terms of the agreement, the Nicaraguan government will get a minority share of the profits generated by the canal.

China's move does not come out of the blue. Over the past few years, Beijing has watched with growing interest the growth of Central American economies.

By 2016, the mainland is expected to overtake the European Union as Latin America's second-largest export market.

What is more, China plans to invest more than US$ 500 billion overseas in the next five years.

In the first week of June, Chinese President Xi Jinping travelled to San José (Costa Rica) and Mexico City on his first official trip to the region, signing deals worth US$ 400 million and nearly US billion, including upgrades of oil refinery, highway and public transport.

In Mexico, Latin America's second largest economy after Brazil, the Chinese president sent "a strong message to the international community that China and Mexico will form a common front to face various challenges in the future".

China's push into Central America is also designed to counter Taiwan's influence. In this region, the Beijing and Taipei have vied for allies ever since the two have been ruled separately after defeated Nationalist forces fled to the island at the end of the Chinese Civil War in 1949.

The deal with Managua over the construction of a Nicaragua canal would not only boost trade ties with the mainland but also undermine Taiwan's own place in the area.

• china
• latin
• america
• nicaragua
• taiwan
• panamà
• canal
• influence