Focus on the BIG picture.
Saturday, Feb 08, 2025
Outside the box.
The Strategic Importance of the Panama Canal in the US-China Competition
U.S. officials express worries about China's participation in the Panama Canal infrastructure as Panama withdraws from China's Belt and Road Initiative.
The Panama Canal, an essential waterway connecting the Caribbean Sea with the Pacific Ocean and accounting for approximately forty percent of US container traffic and five percent of worldwide maritime trade, remains central to the intensifying tensions between the US and China.
US President Donald Trump has consistently threatened to "reclaim" the canal, alleging that Panama has transferred control to China, a claim that both Panama and Beijing refute.
Secretary of State Marco Rubio has criticized Hong Kong-based firms, especially CK Hutchison’s subsidiary Panama Ports Company, which manages two major ports at each end of the canal.
CK Hutchison was granted a concession in 1997, renewed in 2021 for an additional twenty-five years, which has raised concerns, although the canal is operated by the Panama Canal Authority.
Panama, having joined China's Belt and Road Initiative in November 2017 after shifting its diplomatic recognition from Taiwan, has recently filed a formal notice to withdraw from the initiative.
President Jose Raul Mulino confirmed this decision following talks with US officials, while asserting that the choice was not solely influenced by US pressure.
In reaction, China's foreign ministry expressed disappointment over Panama's withdrawal and accused Washington of adopting a Cold War mentality in Latin America.
Complicating matters further, a consortium that includes state-owned China Harbour Engineering Company and China Communications Construction Company has been granted a contract to construct a $1.4 billion highway bridge over the canal to alleviate traffic in Panama City.
While there is no evidence linking the Chinese government to control over the canal, US military analysts, including R Evan Ellis, a research professor at the US Army War College Strategic Studies Institute, have cautioned that increased commercial presence near the canal could give China greater leverage to disrupt US military logistics in the event of conflict.
These developments highlight the intricate interplay of economic, infrastructural, and geopolitical elements surrounding the Panama Canal, a strategic asset that remains crucial in global trade and the rivalry between the US and China.
US President Donald Trump has consistently threatened to "reclaim" the canal, alleging that Panama has transferred control to China, a claim that both Panama and Beijing refute.
Secretary of State Marco Rubio has criticized Hong Kong-based firms, especially CK Hutchison’s subsidiary Panama Ports Company, which manages two major ports at each end of the canal.
CK Hutchison was granted a concession in 1997, renewed in 2021 for an additional twenty-five years, which has raised concerns, although the canal is operated by the Panama Canal Authority.
Panama, having joined China's Belt and Road Initiative in November 2017 after shifting its diplomatic recognition from Taiwan, has recently filed a formal notice to withdraw from the initiative.
President Jose Raul Mulino confirmed this decision following talks with US officials, while asserting that the choice was not solely influenced by US pressure.
In reaction, China's foreign ministry expressed disappointment over Panama's withdrawal and accused Washington of adopting a Cold War mentality in Latin America.
Complicating matters further, a consortium that includes state-owned China Harbour Engineering Company and China Communications Construction Company has been granted a contract to construct a $1.4 billion highway bridge over the canal to alleviate traffic in Panama City.
While there is no evidence linking the Chinese government to control over the canal, US military analysts, including R Evan Ellis, a research professor at the US Army War College Strategic Studies Institute, have cautioned that increased commercial presence near the canal could give China greater leverage to disrupt US military logistics in the event of conflict.
These developments highlight the intricate interplay of economic, infrastructural, and geopolitical elements surrounding the Panama Canal, a strategic asset that remains crucial in global trade and the rivalry between the US and China.
