Panama and China’s Partnership Highlights Years of Strategic Investment

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.

“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.

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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.

Opportunity Knocks

According to Ellis, the effect of China’s mega projects and quiet support for underdeveloped areas of Panama’s economy cannot be overstated.

He said a lot of capital for economic development in the 1980s and 1990s went to Asia rather than Latin America, laying the foundation for China’s current position in Panama. In recent years, a lack of active conflict requiring U.S. attention has hindered “deep strategic thinking” in terms of how Washington allotted resources to Panama.

And while Panama sat on the back burner, China readily stepped in with its checkbook.

Now, major banks such as the Industrial Commercial Bank of China and an abundance of Chinese businesses operate in nearly every sector of Panama.

“You have tens, if not hundreds, of Chinese companies working there,“ Ellis said. ”There’s different kinds of influence that come with that money.”

Richardson said: “The PRC has not extended itself into the Western Hemisphere to offer win-win, high-quality investment. They have come to extract, and they intend to gain access and influence.”

“As China invests more in the region, it could lead to more military cooperation or influence over certain countries’ defense policies, even if it doesn’t involve outright military bases initially,” national security analyst and founder of Scarab Rising, Irina Tsukerman, told The Epoch Times.

“China has already established a military base in Djibouti [Africa], so they have a blueprint for expanding their military reach through strategic partnerships and infrastructure development,” Tsukerman said.

She said the existing Chinese ports near the Panama Canal would make an ideal location to replicate this move.

Though China may not specifically build naval ports, it leans heavily on dual-use infrastructure in key maritime locations that have the potential to serve as military or espionage facilities, according to Tsukerman.

Tsukerman agrees with this and believes China’s port facilities near the Panama Canal have the potential to facilitate future naval operations.

“While these facilities may be commercially oriented initially, they could be leveraged for military use down the line. This would give China proximity to U.S. naval and commercial operations and potentially compromise U.S. control over such a critical chokepoint,” she said.

The internal scrambling of Panamanian officials comes ahead of U.S. Secretary of State Marc Rubio’s highly anticipated visit to the country.

Ellis said Panama will need to answer “important questions” about what China’s current influence over the canal implies and whether it violates the neutrality agreement signed with former U.S. President Jimmy Carter.

“That question is what makes [Panamanian President Jose Raul] Mulino and the canal authorities so nervous,” Ellis said.

On Jan. 30, Mulino stated there would be no negotiation with the United States in terms of ownership of the canal.

“That is done. The canal belongs to Panama,” he told reporters during a press conference.

The Associated Press contributed to this report.