The Chinese presence in Latin America, including Central America, has seen a significant increase in recent years, illustrating China’s growing political and economic influence in what was once considered the “backyard” of the United States.
- The Chinese presence in Latin America, particularly in Central America, has seen significant growth in recent years, illustrating China’s increasing political and economic influence in what was once considered the “backyard” of the United States.
- The Canal de Panama is a point of fierce competition between the US and China, with Chinese companies operating two of the five ports at either end of the canal, while another port is operated by a Taiwanese company.
- The US is primarily concerned with addressing immigration on its southern border and controlling migratory flows, particularly those from Venezuela, Haiti, and Cuba, rather than challenging China in its “backyard” where Taiwan has lost most of its support and China has established its political and economic presence.
The Isthmus of Panama is now the subject of fierce competition between the United States and China. The Canal de Panama, which saw 373,000 ships pass through from 1998 to 2024, is operated by a Chinese company, Hutchison, at two of its five ports, and by a Taiwanese company, Evergreen, at another port. The small countries of Central America have long been on the front lines of competition between Beijing and Taipei, with many maintaining diplomatic relations with Taipei until recently.
The Growing Global Influence of China
China has significantly expanded its economic, commercial, and political influence in Panama since 2017, following Panama’s decision to sever diplomatic ties with Taiwan and establish relations with the People’s Republic of China (PRC). This shift paved the way for China’s increased involvement in key Canal infrastructure projects and aligned with the objectives of the Belt and Road Initiative (BRI). However, there is no evidence to suggest that the administration of the Panama Canal is under Chinese control.
Chinese companies have secured major infrastructure contracts around the Panama Canal, including the construction of the Fourth Bridge and the Amador Cruise Terminal. Additionally, they manage two key ports at the Canal’s entrances: Cristóbal in Colón and Balboa on the Pacific side. Despite these significant investments, the Panama Canal remains under the direct operation of Panama through the Panama Canal Authority.
The Panama Canal plays a crucial role in global shipping, providing unparalleled efficiency for trade between Asia and the eastern ports of the Americas. Alternatives like overland transport or rounding Cape Horn significantly increase distance, costs, and environmental impact, while Arctic routes are limited by seasonality and geopolitical challenges. As the most dependable maritime connection between the Atlantic and Pacific, the canal remains indispensable.
The US is concerned about China’s growing influence in the region and has been putting pressure on countries to recognize Beijing instead of Taipei. The US is also concerned about the security of the Canal de Panama and has been using the issue of Chinese presence in the region to push for tighter immigration controls.
