China, Brazil and Peru signed an agreement on May 19 for feasibility research on a railway linking Brazil’s Atlantic coast to Peru’s Pacific coast.

Analysts said the project will greatly boost development in Latin America, and that China would be an ideal partner in such an expansive and costly plan.

Premier Li Keqiang and Brazilian President Dilma Rousseff witnessed the signing of the document after an official meeting.

The three countries first revealed the project in July when President Xi Jinping made his second visit to Latin America since taking office in 2013.

“Latin America has vast land, but lacks enough railways. The project will help meet an urgent need,” said Chen Fengying, a researcher at the China Institute of Contemporary International Relations.

At present, countries in the region mainly rely on the Panama Canal to link the two oceans, and the proposed railway would be a good substitute, Chen said.

She said such a project is expensive and as it is difficult to raise enough money from international institutions, “China’s involvement is critical”.

Additionally, China’s high-speed railway technology is very mature, while its costs are much lower than those of Japan and European countries, Chen said.

As for concerns over the project’s potential impact on the environment, Chen said she believes China and the two countries can find a reasonable plan to protect nature.

Wu Changsheng, director of the Latin American Studies Center under the China Foundation for International Studies, said the railway will also benefit other countries besides the three initiators.

“For instance, at present, Argentina’s raw material exports have to go through the Panama Canal at a high cost. The railway will greatly reduce the cost and increase efficiency,” Wu said.

By connecting the two oceans, the railway will contribute to regional and global development, said Wu, former ambassador to several Latin American nations.

Wang Zhen, former ambassador to Uruguay and Venezuela, noted that the project is still at the stage of feasibility research and has a long way to go before details are confirmed.

“But it is a grand plan. Once finished, the railway will bear great significance for economic development of Latin America and deepen China’s multilateral cooperation in the region,” Wang said.

Brazil is China’s largest trading partner in Latin America, while Peru has free trade pacts with China.