Why Is Chankai So Important? What Does It Mean for China?

Why is Chankai so important? What does it mean for China?

One is to bypass the Panama Canal and refuse to be trapped by the United States. South America is very special. It is bounded by the Pacific Ocean to the west and the Atlantic Ocean to the east. But its good deep-water ports are almost all on the Atlantic coast, while there are no big ports on the Pacific coast. Brazil's Rio de Janeiro, Sao Paulo, two major port cities, as well as Argentina's Buenos Aires, are close to the Atlantic Ocean. As a result, if Chinese goods want to be shipped to Brazil and Argentina, they have to dock at ports on the west coast of the United States, resupply, then go through the Panama Canal and enter the Caribbean Sea before reaching the Atlantic Ocean and landing on the east coast of South America.But the Panama Canal has one big limitation. It is too small and not deep enough to handle cargo ships up to 76,000 tons. The Panama Canal toll is also very expensive, with an average of 1.05 million yuan charged for one trip. This greatly increases the cost of shipping.

But after the opening of Chankai port, there is no need to go through the Panama Canal, and there is no need to stop in the United States. If our ship crosses the Pacific, it'll take us straight to Chankai. The port of Chankai is the largest port in the whole of South America, facing the Pacific Ocean, and is also a super logistics center with the highest level of automation.

Second, corn and soybeans are not afraid to be stuck by the United States. In Trump's last term, in order to counter the US chip sanctions, China took the initiative to cut imports of US corn and soybeans, and turned to Brazil and Argentina to import corn and soybeans. But Brazil, Argentina's corn, soybean imports, logistics costs are much higher, have to take a big circle to ship to Shanghai, China. Moreover, the shipping route, which still passes through the Panama Canal, is still at risk of being jammed by the United States.

A trade war is a process of hurting each other. U.S. corn and soybean exporters lose the Chinese market, but China also bears higher replacement costs. But after the opening of Chankai Port, there will be no such problem. Because the cost of alternative products is also down. In the future, even if we do not import a single grain of corn or soybean from the United States, we do not have to worry about it. Brazil and Argentina can provide China with an endless supply of corn and soybeans. In fact, Peru is also a corn country.

Third, iron ore, copper, lithium, not afraid of being trapped by Australia. In his last term, Trump, in conjunction with Australia, maliciously raised iron ore exports to China and extorted China. Because Australia is China's largest source of iron ore imports, the cost of switching to Brazilian iron ore would be much higher.

But now, with the opening of the Ciancay port, Brazil's highway leads directly to the Peruvian port of Ciancay. In the future, we can also build a special freight railway line in Brazil, specifically to transport Brazilian iron ore to the port of Qiankai, onto the ship, and quickly transported to Shanghai, China. Dependence on Australian iron ore will be greatly reduced. In addition, after entering the new energy era, Australia has also become the world's largest lithium ore exporter with its rich lithium ore, and China's largest lithium ore importer.

But South America has more lithium than Australia. For example, Bolivia is the world's largest lithium reserve country, Chile is the world's second largest lithium producer, after Australia. Chile is also the world's No. 1 copper producer and could displace Australia.

If Australia wants to raise the price with China maliciously in the future, it will be difficult to do so.

Fourth, it is easier for Chinese companies to explore the South American market. When Trump comes up, he will almost certainly restart the trade war between China and the United States. What is the next potential market for Chinese goods exports? Asean is already China's largest trading partner. What about Africa? Too poor to get up any time soon. The EU and the United States are in harmony, and trade frictions between China and the United States and between China and the European Union are unavoidable. The Russian and Middle Eastern markets have already been eaten up by China. That leaves South America as the next preferred market for China.

South America has a population of more than 400 million, with a per capita GDP of around $10,000. For example, Brazil's per capita GDP is $10,000, Argentina's $13,700, Chile's $18,000, Peru's $8,000, Colombia's $7,000. These South American countries look unstable, but they are actually quite rich. It is just that it used to be too rich, and now it is a little down, but it still consumes energy far more than Africa, India and Central Asia and other countries.

Chinese mobile phones, cars, computers, mechanical equipment, clothing electronics, etc., can be exported to South America on a large scale. With this big market, China's ability to resist trade frictions between Europe and the United States will be stronger. Yes, it's not light in the west, it's light in the east. When the European and American markets crowded out Chinese goods, we had to find the next incremental market and replace the stock with increment.

And the port of Chankai is right on the cusp. South American agricultural products and minerals are exported to China through the Qiankai Port, and Chinese electronics, automobiles, machinery, clothing and other exports to Latin America are also exported through the Qiankai Port. Peru, on the cusp, won outright.