The Panama Canal VS the Nicaragua Canal

The United States constructed the Panama Canal in 1914. Actually they finished it in 1914. The Canal connects the Atlantic to the Pacific Ocean. As you can see on the map, with the Panama Canal the journey from San Francisco to New York is reduced from 13.000 miles to 5.200 miles. See map 1.

Picture 1

Panama Canal

http://springerhistory.weebly.com/uploads/2/2/0/7/22079454/206764_orig.gif

The United States are in very good terms with Panama, and in 1999 the control of the Canal came under Panama’s control. However the American Navy is still active at the Canal. China is trying to construct the Nicaragua Canal, which will connect the Atlantic with the Pacific Ocean, but it will be larger than the Panama Canal, and it will be controlled by the Chinese Navy. See map 2.

Map 2

Panama Canal and Nicaragua Canal Map

http://newsimg.bbc.co.uk/media/images/42222000/gif/_42222810_canal_nicar_416.gif

As you can read at the following Diplomat article, titled “Nicaragua Canal: China’s Strategic Presence in Central America”, June 2015, a Chinese billionaire appears to be the man who will construct the canal, which will cost approximately 50 billion dollars. But everybody knows that it is China who wants the Canal. The Diplomat wonders whether the US can do anything, or whether the US should do anything, and it says that the project will boost economic activity and trade, which will be good for the US too, but it might eventually bring the Chinese Navy very close to the United States.

I must also say that Venezuela is located near these two canals, and Venezuela is the country with the largest oil reserves in the world. Venezuela holds 300 billion barrels of oil, leaving Saudi Arabia at the second place with 270 billion barrels. Venezuela exports oil to both the US and China, and her reserves are of strategic importance for both countries. The problem for the Americans is that Venezuela is a socialist and highly corrupted country, and therefore Venezuela prefers to deal with China, in order for her transactions to be less transparent.

At the following Bloomberg article, titled “Falling Oil Prices Push Venezuela Deeper Into China’s Orbit”, December 2014, you can read that from 2008 till 2014, China has provided Venezuela with 46 billion of dollars in loans. Venezuela will repay these loans with oil exports to China.

Besides, the Americans have many allies near China, and a naval base in Nicaragua would give China the chance to get very close to the US.

For Diplomat’s article see “Nicaragua Canal: China’s Strategic Presence in Central America”, June 2015.

http://thediplomat.com/2015/06/nicaragua-canal-chinas-strategic-presence-in-central-america/

For Bloomberg’s article see

“Falling Oil Prices Push Venezuela Deeper Into China’s Orbit”, December 2014

http://www.bloomberg.com/bw/articles/2014-12-12/with-oil-prices-falling-venezuela-needs-china-more-than-ever

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