"It's a real proposal... and it is quite advanced," Juan Manuel Santos, Colombia's president, was quoted as saying.

"The studies (the Chinese) have made on the costs of transporting per tonne, the cost of investment, they all work out."

The 220-kilometre (136-mile) rail link would run from the Pacific to a new city near Cartagena in northern Colombia, where imported Chinese goods would be assembled for re-export throughout the Americas, the report in Sunday's edition said.

Colombia-sourced raw materials would make the return journey to China, it added.

"I don't want to create exaggerated expectations, but it makes a lot of sense," Santos was quoted as saying. "Asia is the new motor of the world economy."

China has ramped up investment and lending to the developing world, including Latin America, a strategy widely viewed as aimed partly at securing access to the raw materials needed to fuel its fast-growing economy.

Trade between China and Colombia in the first eight months of 2010 reached $4.8 billion, an increase of more than 73 percent over the same period in 2009, according to the Chinese commerce ministry.

The report said this was just one of a series of Chinese proposals that would boost transport links with Asia and improve Colombia's infrastructure.

According to a report posted on the website of the China Coal Transport and Marketing Association in October, China Development Bank and China Railway Group have agreed to invest $2.7 billion in a railway in Colombia.

It will link the Pacific to the Atlantic and be used to transport coal. But it was unclear whether this was the same project as the one mentioned in the FT report.

AFP was unable to reach spokespersons at either China Development Bank or China Railway Group on Monday.

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