Experts say China has spent years laying the groundwork for its current influence near the Panama Canal.
President Donald Trump’s promise to take back control of the Panama Canal has put a spotlight on the expanding relationship between China and the Central American nation.
Security analysts say U.S. officials are right to be concerned about Panama’s deepening strategic partnership with China. This partnership has been fueled by a years-long lack of U.S. investment in key sectors of the Latin American country.
Beijing hasn’t been shy about making moves to further its economic and political interests in the Americas.
The Asian nation has been successful in creating a web of influence through large-scale infrastructure projects and “debt trap” loans to countries that allow China to gain influence over local governments that end up in default.
“To me, the real issue is influence through economic relationships, human ties, and with that, the opportunity for the Chinese to sort of bend Panama’s government to their will,” Evan Ellis, an analyst and research professor for the U.S. Army War College, told The Epoch Times.
Some of this persuasion has been gained through China’s controversial Belt and Road Initiative (BRI). Panama was the first Latin American country to join the BRI just months after breaking diplomatic relations with Taiwan in 2017.
Historically, the United States has been Panama’s top trade partner and largest provider of foreign direct investment at $3.8 billion.
However, China has curried favor in Panama through a willingness to invest in large-scale development projects such as bridges, loans, and support for some of the country’s more neglected sectors.
An example of the latter is the $2 million in health care support and supplies China sent Panama between February and June 2020, as the COVID-19 pandemic put enormous strain on the country’s hospitals. The following year, local officials renewed the 25-year contract for Panama Ports Company, a division of the Hong Kong-based CK Hutchison Holdings, which owns two maritime facilities.
Through its subsidiary, CK Hutchison Holdings operates ports on the Pacific and Caribbean sides of Panama—close to the canal—making them a focal point of concern among U.S. officials.
