The Panama Canal, a vital 51-mile (82 km) maritime passage connecting the Atlantic and Pacific Oceans through Panama, plays a critical role in global shipping. Operated directly by Panama, this strategic waterway sees approximately 14,000 ships passing through each year. While the United States remains the largest investor in Panama and the top user of the canal, China has significantly increased its influence in the region through infrastructure investments related to its Belt and Road Initiative (BRI) since 2017. Recent geopolitical developments have highlighted the complex interplay of power and influence in this crucial maritime corridor.
China's growing presence around the Panama Canal has raised concerns and led to significant geopolitical shifts. From October 2023 to September 2024, shipping to or from China accounted for 21% of the cargo traversing the canal. This underscores China's expanding economic footprint in a region where three primary container ports—Colon, Rodman, and Manzanillo—are operated by companies based in Singapore, Taiwan, and the United States. Despite this, the canal remains a critical conduit for goods moving between China and the US east coast or between San Francisco and New York, reducing transit times by weeks.
However, Panama recently distanced itself from its partnership with China amid pressure from the United States. Panamanian authorities have expressed dissatisfaction with their experience in infrastructure partnerships with China. A major bridge project around the canal has garnered attention, but several other high-profile Chinese-led projects have been shelved. Notably, an extension to the Panama City Metro, set to run under the south end of the canal, is being constructed by the China Railway Tunnel Group Company.
The potential for China to leverage its influence in regional ports during a global conflict has been a point of concern for US officials. General Laura J Richardson remarked:
"In any potential global conflict, the PRC [China] could leverage strategic regional ports to restrict US naval and commercial ship access." – Gen Laura J Richardson
Henry Ziemer echoed these concerns, suggesting that:
"In a time of a crisis or a conflict it would be relatively trivial for the Chinese Communist Party (CCP) to say we're going to use the ports." – Henry Ziemer
Further amplifying these apprehensions, Republican Senator Ted Cruz pointed out:
"Partially-completed bridge gives China the ability to block the canal without warning." – Republican Senator Ted Cruz
Despite these geopolitical tensions, the United States continues to maintain its dominant position concerning cargo passing through the canal. Last year, three and a half times as much cargo traveled through the canal between the US and other destinations compared to China.
Victor Li Tzar-kuoi, chairman of CK Hutchison, serves as a member of the national committee of the Chinese People’s Political Consultative Conference (CPPCC). His role highlights China's intricate ties with companies operating around the canal. The Chinese national security law introduced in 2020 could further complicate matters by allowing China to exert influence over Hong Kong-based companies during conflicts.
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