Reuters and AFP China and Peru have agreed to study the feasibility of a 5,300-kilometre transcontinental railway that would connect the Pacific coast of Peru with the Atlantic coast of Brazil.
The agreement came as Chinese Premier Li Keqiang arrived in Peru on the third leg of a Latin America visit. Earlier this week, Brazil and China agreed on a feasibility study for the rail link, China's Xinhua News Agency reported.
The proposed transcontinental railway would span the Andes to the Pacific and reduce the cost of shipping grain and minerals to Asia.
Li has said that the Beijing-funded project would respect the region's environment including the Amazon basin.
"The three countries agree on the fact that the viability of this project will not only be favourable to our common development but will also protect the environment," he said in Lima on Friday.
"To create the infrastructure, it is necessary to protect the environment," he added in a joint declaration made with Peruvian President Ollanta Humala.
The railway could cost $10 billion. Humala said it would "consolidate Peru's geopolitical position as the natural entry to South America".
Peru and China have special historical ties due to the arrival in Peru between 1849 and 1874 of more than 100,000 labourers who helped build the Peruvian economy through sugar production, guano collection and the building of railways.
El Callao, not far from the capital Lima, is the busiest Pacific port in South America in terms of container traffic.
In his talks with Humala, Li also called for cooperation in the oil, clean energy, mining, agriculture, forestry and fishery sectors, Xinhua said.
China and Latin America would each benefit from the railway by upgrading infrastructure, while allowing China to export its "industrial capacity" and investment, the news agency added.
In January, Chinese President Xi Jinping pledged $250 billion in investment in Latin America over the next 10 years as part of a drive to boost resource-hungry China's influence in a region long dominated by the United States.
Li oversaw the signing of several agreements during his visit to Brazil, ranging from a $1-billion purchase of passenger jets made by Brazil's Embraer to the lifting of an export ban on Brazilian beef.
Li is scheduled to travel to Chile after his visit to Peru.