Panamanians, not CCP agents, may be the ones flipping the switches that let ships through the Panama Canal.
But the Atlantic Council reminds us that “The US is right to be concerned about China’s influence” over the Canal (January 9, 2025).
Chinese companies such as Landbridge Group and the Hong Kong-based CK Hutchison Holdings now operate ports at both ends of the canal. This presence raises concerns about potential dual-use infrastructure and strategic maneuvering, particularly given China’s deepening ties to Latin America.
CK Hutchison Holdings has been operating its Canal-proximate ports since 1997. It assumed control when Hong Kong was still Hong Kong, years before China wiped out Hong Kong’s political independence. But Hong Kong is now entirely subjugated to the mainland, which means that Hutchison’s control of the ports is PRC control and Chinese Communist Party control.
CSIS tells us more about China’s growing presence in Panama:
Chinese companies have been heavily involved in infrastructure-related contracts in and around the Canal in Panama’s logistics, electricity, and construction sectors. These projects fit naturally with China’s BRI vision, onto which Panama was the first Latin American country to sign in 2018. This, along with Panama’s recognition of China, boosted China’s already existent footprint in the Canal, and Chinese companies have since positioned themselves at either end of the Panama Canal through port concession agreements…. Additionally, in March 2021 the Panamanian government began the process of renewing the lease of Hutchison Ports PPC, a subsidiary of Hong Kong–based CK Hutchison Holdings, which serves as operator for the ports of Balboa and Cristobal, two major hubs of the Canal’s Pacific and Atlantic outlets, respectively.
Furthermore, in 2018, a Chinese consortium led by CHEC and CCCC announced it was awarded a $1.4 billion contract for the Canal’s fourth bridge, which then-president Varela called “the fifth most important project in the history of the country.” More recently, China Construction Americas finished the Amador Convention Center along the Pacific side of the Canal, a project contracted under the Varela government and funded by Chinese loans. China has also invested in energy-related facilities along the Canal.
The Atlantic Council notes that the U.S. “wields significant economic leverage over Panama.”
As the primary user of the canal and Panama’s largest provider of foreign direct investment—$3.8 billion annually—the United States can influence Panamanian decision making…. Will Panama prioritize alignment with US interests to safeguard this support, or will it risk economic repercussions by favoring China and leveraging its control over this vital trade route? Alternatively, could US economic retaliation, Panama’s reaction, and Chinese competition escalate tensions to the point that interventions are warranted under the treaty?
Transit fees, which are calculated using a universally applicable formula, have surged in recent years. In part, these fee increases are a response to droughts in 2023 and early 2024, which restricted the number of ships that could transit the canal. Authorities raised fees to counteract revenue loss from the transit restrictions. Nonetheless, if costs continue to rise, and if China continues to expand its presence around the canal, then there may be louder calls to resurrect the Roosevelt Corollary to the Monroe Doctrine. This corollary asserts the United States’ right to intervene in the region to ensure stability and prevent foreign interference.
The Atlantic Council author, Gregg Curley, also contends that Trump’s criticism of Jimmy Carter’s relinquishing of the Canal in the late 70s misses heaps of “nuanced legal and geopolitical complexities.” Curley then elaborates some of the details of what happened and what was agreed to. But he doesn’t show that giving up U.S. control of the Panama Canal was a bad decision. Obviously, it was a bad decision.
If the congressmen of 1978 had known then what we know now about China’s crowding of the area, would they have ratified the treaty?
Also see:
Hoover Institution Library: “A Firing Line Debate: Resolved: That the Senate Should Ratify the Proposed Panama Canal Treaties”
Recorded January 13, 1978 and featuring Bill Buckley, James Burnham, George Will, Elmo Zumwalt, Ronald Reagan, Patrick Buchanan, Roger Fontaine, John McCain, and Ellsworth Bunker.
Reagan Library: “Excerpts From an Address by the Hon. Ronald Reagan to Young Americans for Freedom” (August 25, 1977) (page 8 of linked PDF)
“I was critical of those in power at the time for the virtual secrecy with which negotiations were being conducted. And I was concerned that turning over the Canal to Panama might lead to conditions that could threaten our security and that of the entire hemisphere.”
StoptheCCP.org: “Trump’s Promise to Take Back the Panama Canal Is a Move Against China”
“How can Chinese investments in facilities that ‘have a potential dual use for malign and military activities’ constitute only ‘little’ evidence of China’s military interest [in Latin American countries]?”
