Trump says that China “operates” the Panama Canal: how far Beijing’s ties arrive with this key river path?

Hong Kong
CNN
–

Donald Trump began his second term as president increasing the pressure on Panama, threatening to “recover” the Panama Canal and accusing the country of giving control of the critical aquatic path to a rival of the United States: China.

“Above all, China is operating the Panama Canal. And we did not give it to China. We gave it to Panama and we are recovering it, ”Trump said in his investiture speech last month.

There is no evidence that China controls the channel, managed by an independent authority appointed by the Panamanian government. Beijing repeatedly denied that it has interfered in the channel operations.

But American concern occurs when Trump’s White House seeks to prop up national security, especially in its own neighborhood, and win an economic competition with China.

In the center of Trump’s arguments is a company based in Hong Kong that operates two key ports at each end of the navigable road 80 kilometers long; and broader concerns about the growing influence of Beijing in a region of the world where the United States was for a long time the dominant power.

The president of Panama, José Raúl Mulino, said that Panama’s sovereignty on the channel is not under discussion, but the country made other concessions to US pressure.

After a meeting with the high American diplomat Marco Rubio last Sunday, Mulino said that Panama would leave the Chinese infrastructure program to the program.

Last month, the Panamanian authorities also initiated an audit of the company owned by Hong Kong that operates two ports at both ends of the channel.

Chinese companies are increasingly in the spotlight of Washington’s concerns in national security. The application of China Tiktok property and the Huawei telecommunications giant were some of the private companies subjected to intense scrutiny in Washington for the concern that, ultimately, they are indebted to Beijing, despite their negatives.

This is what you have to know about China’s involvement in the strategic channel.

The main concern of the Trump Administration is located at both ends of the aquatic road, where two of the five ports that serve the channel are operated by Panama Ports Company (PPC), part of a port operator owned by HONG headquarters Kong, CK Hutchison Holdings.

Based in a shiny skyscraper in the center of Hong Kong, CK Hutchison is a company that quotes in the stock market and one of the largest port operators in the world, with 53 ports in 24 countries. He first obtained the concession of the two ports of the Panama Canal in 1997, when Panama and the US jointly administered the channel. The concession was renewed in 2021 for another 25 years.

Rubio, before his visit to Panama, said that the fact that Hong Kong headquarters “have control of the entry and exit points” of the channel is “completely unacceptable.”

Hong Kong, who was returned by Great Britain to China in 1997, is supposed to have a high level of autonomy with respect to continental China, but Beijing drastically reinforced its control over the city in recent years after generalized protests in favor of the democracy.

“If there is a conflict and China tells them: do everything possible to obstruct the channel so that the US Fast enough, they would have to do it, ”Rubio said in an interview with the journalist Megyn Kelly, without directly appointing the company.

However, the PPC operator, owned by Hong Kong, does not control access to the Panama Canal.

The workers of their two ports carry and download containers in the ships and supply fuel, while the channel itself is operated by the Panama Canal Authority, CNN previously reported. The ships that travel through the channel must be piloted by local captains used by the authority.

CNN contacted CK Hutchison to comment. In a recent statement in social networks, PPC said that he is the only port operator in the channel in which the Panamanian State is a shareholder. He added that more than 99% of his staff was Panamanian.

The Hutchison ports are not the only companies linked to China that participate in the channel infrastructure.

A consortium formed by the Chinese state companies Harbor Engineering Company and China Communications Construction Company was awarded the contract to build a road bridge over the US $ 1.4 billion channel to facilitate traffic in Panama City.

Meanwhile, the state company Cosco Shipping is one of the main clients of the channel, with almost 300 of its cargo ships sailing through the navigable route every year, including bonnets, dry bulkters and oil companies, according to data from the 2018 company.

There is no evidence that the Chinese government controls the Chinese channel or military activity in Panama, experts say.

But the concern of the US authorities occurs in the midst of a worldwide scrutiny of Beijing’s efforts to build or ensure access to commercial ports worldwide, which could also benefit the growing Chinese armed.

With regard to the Panama Canal, some experts say that the participation of Chinese companies in the channel and their infrastructure could give Beijing influence, both in terms of commercial advantage and in case of a possible future conflict with the United States.

Rubio referred to this concern during a confirmation hearing for his position in January, saying that a “foreign power” has the capacity, through its companies, “to turn the channel into a strangulation point in a moment of conflict” .

The strategic risk from the military point of view is that the more commercial assets are linked to China around the channel, the more options will be a Beijing to block the US to the transport of military equipment through the navigable road in case of conflict in case of conflict Between them, according to R. Evan Ellis, Research Professor of Latin American Studies at the Institute of Strategic Studies of the US Army College.

“All these operations, and the relations with the authority of the Panama Canal… plus the technical knowledge obtained as a regular channel operator basically multiplies the possibilities that if you are (China) and want to close the channel in a time of conflict , there are a thousand ways to do it, ”he said, pointing out actions such as attacking locking control systems or physically blocking the aquatic route. “His physical presence, his influence and his technical knowledge (…) would make defense difficult.”

The president of the Federal Maritime Commission, Louis Sol ”

A 1977 treaty that establishes the return of the US Channel to Panama requires that the channel remain neutral and allows the US to intervene militarily if the operations of the aquatic pathway are disturbed by an internal conflict or by a power Foreign

However, some observers see little or limited influence from China today.

The United States is as firmly established as a “preeminent” partner of Panama that any influence on the goods that pass through the channel to which China could aspire to reinforce its ties with the country is “limited in the best case”, according to Brian Wong , Professor of the Center on contemporary China and the world of Hong Kong University.

And Vincent Clerc, CEO of the World Maritime Transport Giant Maersk, told Anna Stewart, CNN, that the operations on the channel “were most affected by the lack of rains … than by the Chinese.”

A state visit in 2018 of Chinese leader Xi Jinping to the country of approximately 5 million inhabitants stressed how much emphasis put Beijing – an important world exporter – in the construction of their ties with the strategically vital country.

Then, the countries signed about 19 agreements to collaborate in commerce, infrastructure, banking and tourism, while XI declared that their relations had “opened a new chapter.”

Certainly, so it was. China and Panama only established diplomatic ties a year earlier, after Panama stopped recognizing Taiwan as China’s government. That same year, Panama became the first country in Latin America to join the emblematic Global Infrastructure Development Initiative Belt and Route of XI.

These changes came accompanied by an avalanche of offers from Chinese companies to build and invest in projects that went from a container terminal of US $ 1 billion to a high -speed train. Both projects ended failing, since the change in the leadership of Panama was a greater scrutiny of such plans and the concern of the United States promoted greater caution.

But Chinese companies have also been successful.

Last year a cruise terminal built by China was inaugurated, while Chinese companies also have a significant presence in special trade zones near Colón and Panama Pacífico, experts say. The Chinese telecommunications giant Huawei opened in 2015 a large distribution installation of its electronic systems from one of those areas.

Mulino’s decision not to continue participating in the belt and route initiative can point out a new stage of scrutiny about the presence of China in the country. But some observers claim that Beijing could not be flinch.

“China will continue to invest in Panama if the Central American nation needs money, and China will continue to trade with Panama,” said Jiang Shixue, director of the Center for Latin American Studies of the University of Shanghai. Panama’s decision will simply point to Beijing that “US pressure is very large,” he added.

Meanwhile, there are indications that although China is interested in expanding its footprint in the country, it can have other objectives, in places with less potential resistance.

“The control of strategic strangulation points such as the Panama Canal is probably among China’s objectives,” said Will Freeman, Fellow of Studies on Latin America at the Council on Foreign Relationships in New York.

“But it is dwarfed in importance for a project like Chancay, the new Peruvian megaport that will accelerate trade between South America and China.”