The Panama Canal has been back in the news this month as Red China threatens the companies operating its Atlantic and Pacific ports.
You’ll remember that in March of last year, a Black Rock–led consortium made a deal to buy an 80% interest in Hong Kong’s Hutchison Port Holdings, then operating those ports. The deal seemed to loosen Red China’s grasp on the Panama Canal.
Then, in January 2026, the Panama Supreme Court “ruled that the laws and acts underpinning the concession contracts between the state and the Panama Ports Company (PPC) for the development, construction, operation and management of the two port terminals violated the country’s constitution.” Thus, the PPC could not legally award or renew ports management contracts to Hong Kong’s CK Hutchison or, presumably, anyone else.
Hutchison lost its contract. Black Rock and friends are seeking to close a deal for CK Hutchison’s ports that does not include the Panama assets.
APM and TIL
After CK Hutchison had been stripped of the two concessions, temporary 18-month operating agreements were awarded to APM Terminals Panama, part of Danish shipper Maersk, and TIL Panama, part of Switzerland’s MSC company.
Now the Financial Times reports that Beijing has instructed the European firms not to “engage in illegal activities that harm the interests of Chinese companies, and to uphold commercial ethics and international rules.” That seems benign enough—except that the communists also ordered these firms “to withdraw from the Balboa and Cristóbal ports immediately.”
In other words, to hell with Panamanian Supreme Courts and lawful authority. This is what it looks like when you reach the end of the road of Belt and Road.
Early last month, the CCP began to give the third degree to Panama-flagged ships in communist Chinese ports, which were typically detained for a few days—as short as one day or as long as 10 days—before being released. According to Associated Press, “Of the 124 ships detained in Chinese ports for inspection in March, 92—or nearly 75%—were Panama-flagged…. That is up drastically from the previous two months, when 19 out of 45 ships—or more than 40%—held in February were Panama-flagged, and 23 out of 71—or over 30%—in January hung the Panama flag.”
Secretary of State Marco Rubio weighed in: “China’s decision to detain or otherwise impede Panama-flagged vessels engaged in lawful trade destabilizes supply chains, raises costs, and erodes confidence in the global trading system. The United States stands with Panama against any retaliatory actions against its sovereignty and will always support our partners in the face of bullying.”
In mid-March, Panamanian President José Raúl Mulino said that Panama “does not want conflict with China and hopes relations will return to normal. He added that vessel inspections are not unusual in global shipping and said Panama is still assessing the situation.” By month’s end, Beijing was denying that it had stepped up inspections of Panama-flagged ships. Some kind of misunderstanding, perhaps.
Red China is playing a weak hand. Hassling cargo ship owners and crews won’t restore its control of the Panama Canal.
Stakes holder
But the case of the Suez Canal may be different, suggest writers for Real Clear World: “China does not need to own the Suez Canal to benefit from influence around it. It only needs to continue embedding its firms, its capital, and its logistics networks into the commercial ecosystems surrounding the canal. Over time, that can shift port operations, supply chains, and regional economic alignments in ways that may favor Beijing and marginalize others.”
The Chinese-government-owned COSCO Shipping Ports “holds a 20% stake in the Suez Canal Container Terminal at East Port Said near the canal’s Mediterranean entrance. It also holds a 25% stake in the new terminal at Ain Sokhna near the Red Sea entrance.”
And then there are the ports themselves.
Per the Middle East Institute, “Hutchison Ports has invested more than $1.5 billion in Egypt, forging a long-term collaboration with the Egyptian Navy to construct and manage a new container terminal within the Abu Qir Naval Base on the Mediterranean coast. This partnership comes with a 38-year concession. But Hutchison Ports’ influence reaches further, encompassing the operation of two other vital ports: Alexandria and El Dekheila. Both ports are essential to Egypt’s commercial activity, with Alexandria Port alone handling nearly 60% of the nation’s foreign trade.” (Meanwhile…that new administrative capital city that Egypt is building? China State Construction Engineering Corporation is building its central business district.)
There’s more from MEI. It may make you queasy.
Red China is developing a stronger hand here than it had in Panama. Its influence runs broader and deeper and is still growing. The U.S. has some leverage in terms of foreign aid to Egypt. But in 2025, setting aside credits for military purchases, the non-military aid amounted to less than $193 million. Aid cannot not be enough to block China’s progress in Egypt.
There is a pattern here. In the competition between the U.S. and Soviet Union over funding of the Aswan Dam, the communists ultimately won, and their win led to a general Egyptian preference for Soviet partnership.
Washington’s win over Beijing in Panama, fairly easy, may not be replicable at the Suez Canal without a strategy and some hard work. We don’t have to outspend them if we can outthink and outmaneuver them. □
James Roth works for a major defense contractor in Virginia.
Also see:
Matthew Fulco: China and Panama
”The FT, citing someone familiar with the talks, said that if the European firms exited the ports, American operators ‘were the most likely to take over the concessions, an outcome that would be worse for Beijing.’ ”
