The newly expanded Panama Canal will boost trade between China and Latin America as it makes the flow of goods between the two regions easier and more efficient, a Mexican expert on Asia said.
Jose Luis Leon-Manriquez of Mexico City’s Autonomous Metropolitan University, spoke with Xinhua following the opening of the expanded canal on Sunday, with the inauguration ceremony featuring a huge Chinese container ship passing through the waterway.
It (the expansion) does not only make it easier to ship manufactured goods from China to the east coast of the United States, but also makes it possible to improve transport between Chinese ports and Latin American ports on the Atlantic side, said Leon-Manriquez.
The Panama Canal allows ships a shortcut between the Atlantic and the Pacific. The expansion project, which aims to make the waterway capable of accommodating larger modern vessels, lasted nearly a decade at a cost of 5.5 billion U.S. dollars.
The canal, which was built 102 years ago, sees 6 percent of global trade passing through its lanes and locks every year.
Due to the expansion, the canal now allows passage of Neo Panamax mega-vessels, which could carry up to 13,000 containers. The largest ship used to travel the canal could only carry 5,000 containers.
Neo Panamax ships represent 16 percent of the world’s shipping fleet, but move up to 45 percent of all cargo, said Leon-Manriquez, adding that the situation underscores the need to expand the canal.
“There was a certain decrease in traffic through the Panama Canal in recent years, because these enormous ships couldn’t pass through,” he said.
China is the canal’s second-biggest client, after the United States, transporting about 23 percent of the total volume of goods through the waterway in 2014, according to the Organization for Economic Cooperation and Development.
“Now it will be much easier for these large ships stacked with containers to pass through … reducing transport time and by extension, costs,” said Leon-Manriquez.
In April, the China Ocean Shipping Company won a draw to inaugurate the expanded canal with its container vessel Andronikos, which it renamed Cosco Shipping Panama in honor of the historic event.