Donald Trump has begun his second term as president by ramping up pressure on Panama \u2013 threatening to \u201ctake back\u201d the Panama Canal and accusing the country of ceding control of the critical waterway to a US rival: China. <\/p>\n
\u201cAbove all, China is operating the Panama Canal. And we didn\u2019t give it to China. We gave it to Panama, and we\u2019re taking it back,\u201d Trump claimed in his inaugural speech last month. <\/p>\n
There\u2019s no evidence that China controls the canal, which is run by an independent authority appointed by Panama\u2019s government. Beijing has repeatedly denied that it has interfered in canal operations. <\/p>\n
But the US concern comes as the Trump White House seeks to shore up national security, especially in <\/strong>its own neighborhood, and win an economic competition with China. <\/p>\n At the heart of Trump\u2019s contentions are a Hong Kong-based company that operates two key ports at either end of the 50-mile long waterway \u2013 and broader concerns about Beijing\u2019s expanding influence in a region of the world where the US has long been the dominant power. <\/p>\n Panama\u2019s President Jos\u00e9 Ra\u00fal Mulino has said Panama\u2019s sovereignty over the canal was not up for debate, but the country has made other concessions to US pressure. <\/p>\n Following a meeting with top US diplomat Marco Rubio last Sunday, Mulino said Panama would exit China\u2019s Belt and Road infrastructure drive \u2013 a blow for Beijing, which had celebrated Panama as the first country in Latin America to join the program. <\/p>\n Panamanian officials last month also launched an audit of the Hong Kong-owned firm that operates two ports at either end the canal. <\/p>\n Chinese companies have become increasingly caught in the crosshairs of Washington\u2019s national security concerns. Chinese-owned app TikTok and telecoms giant Huawei have been among private firms facing intense scrutiny in Washington over concerns that they are ultimately beholden to Beijing, despite their denials. <\/p>\n Here\u2019s what to know about China\u2019s involvement in the strategic channel. <\/p>\n The Trump administration\u2019s key concern is found at either end of the waterway, where two of the five ports that service the canal are operated by Panama Ports Company (PPC), part of a port operator owned by Hong Kong-based conglomerate CK Hutchison Holdings. <\/p>\n Based in a gleaming skyscraper in downtown Hong Kong, CK Hutchison is a publicly listed company and one of the world\u2019s largest port operators, overseeing 53 ports in 24 countries, according to the company. It was first granted the concession over the two Panama Canal ports in 1997 when Panama and the US jointly administered the canal. That concession was renewed in 2021 for another 25 years. <\/p>\n Rubio ahead of his visit to Panama said Hong Kong-based companies \u201chaving control over the entry and exit points\u201d of the canal is \u201ccompletely unacceptable.\u201d <\/p>\n Hong Kong, which came under Chinese control in 1997, is meant to have a high level of autonomy from mainland China, but Beijing has dramatically tightened its grip on the city in recent years following widespread pro-democracy protests. <\/p>\n \u201cIf there\u2019s a conflict and China tells them, do everything you can to obstruct the canal so that the US can\u2019t engage in trade and commerce, so that the US military and naval fleet cannot get to the Indo-Pacific fast enough, they would have to do it,\u201d Rubio said in an interview with journalist Megyn Kelly, without directly naming the company. <\/p>\n The Hong Kong-owned operator PPC, however, does not control access to the Panama Canal. <\/p>\n The Hutchison ports are not the only China-linked firms involved in canal infrastructure. <\/p>\n A consortium comprised of state-backed China Harbour Engineering Company and China Communications Construction Company was awarded the contract to build a $1.4 billion highway bridge over the canal to ease traffic in Panama City. <\/p>\n Meanwhile, state-owned COSCO Shipping is a major canal client, with nearly 300 of its cargo ships navigating the waterway each year, including container ships, dry bulk carriers, and oil tankers, according to company data from 2018. <\/p>\n There\u2019s no evidence that the Chinese government controls the canal or of Chinese military activity in Panama, experts say. <\/p>\n But US officials\u2019 concerns come amid a global scrutiny of Beijing\u2019s efforts to build or secure access to commercial ports around the world \u2013 which could also benefit China\u2019s expanding navy. <\/p>\n When it comes to the Panama Canal, some observers say that Chinese firms\u2019 involvement in the canal and its infrastructure could give Beijing leverage \u2013 both in terms of commercial advantage and in the event of a potential future conflict with the US. <\/p>\n Rubio referenced this concern during a confirmation hearing for his post in January, saying that a \u201cforeign power\u201d possesses the ability, through their companies, \u201cto turn the canal into a choke point in a moment of conflict.\u201d <\/p>\n The strategic risk from a military perspective is that the more commercial assets that are linked to China around the canal, the more options Beijing has to block the US from moving military equipment through the waterway in the event of a conflict between them, according to R. Evan Ellis, a research professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute. <\/p>\n \u201cAll of these operations, and the relationships with Panama Canal Authority \u2026 plus the technical knowledge that you get as a regular operator of the canal basically multiplies the possibilities that if you are (China) and you want to shut down the canal at a time of conflict, there are a thousand ways to do it,\u201d he said, pointing to actions like attacking lock control systems or physically blocking the waterway. \u201cTheir physical presence, influence and technical knowledge \u2026 would make it harder for us to defend against.\u201d <\/p>\n Federal Maritime Commission Chairman Louis Sola last week told Congress the US must also guard against \u201cany effort by other interests in Panama to diminish the independence or professionalism of the (Panama Canal) Authority.\u201d <\/p>\n A 1977 treaty laying out the return of the canal from the US to Panama requires the canal to remain neutral and allows for the US to intervene militarily if the waterway\u2019s operations are disrupted by internal conflict or a foreign power. <\/p>\n However, some observers see little or limited sway from China at present. <\/p>\n The US is so firmly established as a the \u201cpre-eminent\u201d partner for Panama that any leverage over goods passing through the canal that China could hope for by enhancing its ties in the country is \u201ccapped and limited at best,\u201d according to Brian Wong, a fellow at the University of Hong Kong\u2019s Centre on Contemporary China and the World. <\/p>\n A 2018 state visit from Chinese leader Xi Jinping to the country of roughly 5 million underscored just how much emphasis Beijing \u2013 a major global exporter \u2013 has placed on building its ties with the strategically vital country. <\/p>\n Then, the countries inked some 19 agreements to collaborate on trade, infrastructure, banking, and tourism, while Xi declared their relations had \u201cturned over a new chapter.\u201d <\/p>\n That certainly was the case then. China and Panama only established diplomatic ties a year prior, after Panama stopped recognizing Taiwan as the government of China. That same year Panama became the first country in Latin America to join Xi\u2019s flagship Belt and Road global infrastructure development initiative. <\/p>\n Those changes were accompanied by a flurry of bids from Chinese companies to build and invest \u2013 projects ranging from a $1 billion container terminal to a high-speed rail. Both those projects ultimately fizzled, as a change in Panama\u2019s leadership brought greater scrutiny over such plans and US concerns drove more caution. <\/p>\n But Chinese firms have also had successes. <\/p>\n A China-built cruise ship terminal was inaugurated last year, while Chinese companies also have a significant presence in special trade zones near Colon and Panama Pacifico, experts say. Chinese telecommunications giant Huawei in 2015 opened a large distribution facility for its electronic systems from one of those zones. <\/p>\n Mulino\u2019s decision not to stay involved in the Belt and Road initiative may signal a new stage of scrutiny on China\u2019s presence in the country. But some observers say Beijing may not be phased. <\/p>\n \u201cChina will continue to make investment in Panama if the Central American nation needs the money, and China will continue to trade with Panama,\u201d said Jiang Shixue, director of the Center for Latin American Studies at Shanghai University. Panama\u2019s decision will merely signal to Beijing that \u201cAmerican pressure is so huge,\u201d he added. <\/p>\n Meanwhile, there are signs that while China has an interest in expanding its footprint in the country, it may have other goals, in places with less potential resistance. <\/p>\n \u201cControl of strategic chokepoints like the Panama Canal is probably among China\u2019s goals,\u201d said Will Freeman, Fellow for Latin America studies at the Council on Foreign Relations in New York. <\/p>\n \u201cBut it\u2019s dwarfed in importance by a project like Chancay, the new Peruvian mega-port which will accelerate South America-China trade.\u201d <\/p>\n<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Donald Trump has begun his second term as president by ramping up pressure on Panama \u2013 threatening to \u201ctake back\u201d the Panama Canal and accusing the country of ceding control of the critical waterway to…<\/p>\n","protected":false},"author":1,"featured_media":3522,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[118],"tags":[],"class_list":["post-3521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-world"],"_links":{"self":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts\/3521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/comments?post=3521"}],"version-history":[{"count":0,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/posts\/3521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/media\/3522"}],"wp:attachment":[{"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/media?parent=3521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/categories?post=3521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/invest360pro.com\/index.php\/wp-json\/wp\/v2\/tags?post=3521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} Does China have a presence in the Panama Canal?<\/h2>\n
Does that give China \u2018control\u2019 over the canal?<\/h2>\n
What kind of relationship does China have with Panama?<\/h2>\n