China-backed infrastructure in the Global South: lessons from the case of the Brazil–Peru Transcontinental Railway project

Abstract

In the past decade, infrastructure has become a key area of cooperation between China and the Global South. Among the cooperation initiatives, numerous cases have experienced shortcomings or have failed. Notwithstanding some efforts, the reasons why still need to be better understood. To contribute to further illuminating this issue, the present study examines approximately 2000 pages of previously undisclosed documents of one of the most ambitious projects China has been involved in, namely the Brazil–Peru Transcontinental Railway project. The main events of this case are reconstructed to explain why the Brazil–China–Peru cooperation failed to achieve its objective of producing a basic feasibility study acceptable to these three countries. It finds that the main causes were: (1) the clash between Chinese and Brazilian interests; (2) the use of poor quality standards for the development of the basic feasibility study; and (3) the Peruvian abandonment of the initiative. Therefore, this case study draws attention to the importance of accounting for and trying to conciliate all partners’ interests; it also suggests that relevant Chinese actors may need to improve their planning and feasibility studies quality standards; and, finally, it highlights the consequential role of institutional and technical capacity in host countries.

Keywords:

• China-backed infrastructure
• South–South cooperation
• development cooperation effectiveness
• aid effectiveness
• China

Acknowledgements

The author thanks Professor Guo Jie (School of International Studies, Pekin University) for her valuable guidance and comments, and Darissa Cama (student at Universidad del Pacífico) for her research assistance. He also expresses his gratitude and appreciation to the anonymous interviewees for their insights and to the reviewers for their highly helpful comments and suggestions.

Disclosure statement

The author reports there are no competing interests to declare.

Notes

1 This 72-billion-dollar figure was provided by the basic feasibility study in the course of the trilateral cooperation (CREEC 2016a). Before that, according to news sources, the preliminary estimate for the project implementation was close to 10 billion dollars (eg BBC 2015).

2 In Peru, it was kept as a single project (ProInversión 2011), while it was segmented in Brazil (see EPL 2015).

3 CREEC is a subsidiary of the giant China Railway Group that specialises in comprehensive engineering survey and design. It has 70 years of experience and it is one of the biggest of its kind in China. As for its experience internationally, CREEC worked on 50% of China’s railway projects overseas, including initiatives in Latin America (CREEC n.d.).

4 Considering the content of the MOU on the Creation of the Trilateral Working Group for a Brazil–Peru Bioceanic Railway Connection (2014) and the MOU on the Joint Conduction of the Basic Feasibility Studies for a Bioceanic Railway Connection (2015).

5 For instance, CREEC used 600 meters as the minimum curve radius, whereas Brazil proposed 344 meters or less (CREEC 2016a, 42).

6 Note that there was no such conflicting interpretation in the case of Peru.

7 The Brazilian technical team worked during and after the process of impeachment (April–August 2016), as can be seen from the dates of meeting minutes (EPL 2017a, 2017b).

8 In the best-case scenario, the internal rate of return would be approximately 1% in four decades, whereas it would be as low as negative 6% over a period of almost 60 years in the worst case (CREEC 2016a, 125).

Additional information

Funding

This work was supported by the Centre for China and Asia-Pacific Studies at Universidad del Pacífico in the framework of the initiative Build – China in the Global South.

Notes on contributors

Leolino Dourado

Leolino Dourado, @Leolino_Dourado, is a research affiliate at the Center for China and Asia-Pacific Studies at Universidad del Pacífico (Lima, Peru). He is also a PhD student of international politics at Fudan University (2021–2024) and holds a master’s degree in international relations from Peking University (2018–2020). Previously, he served as a research assistant at the School of International Studies at Peking University and as an assistant at the Center for China and Asia-Pacific Studies at Universidad del Pacífico. In his academic and professional experience, he has conducted and supported research on economic development and South–South cooperation, Sino–Latin American relations, and China’s foreign policy. Moreover, he actively contributed to the organisation of several high-level academic events, including an official meeting of the G20’s think tanks engagement group.