Jilted but Persistent: Growing PRC Assertiveness in Panama
Matt Brazil
Executive Summary:
The January 2026 Panamanian court decision against CK Hutchinson’s stake in the Panama Canal has led Beijing to halt state-sponsored investment, marking a turning point toward selective coercion in the relationship.
Panama, the first Latin American country to join the One Belt One Road initiative after pivoting diplomatic recognition away from Taiwan, has had to balance its deeper relationship with the United States.
Chinese media and Panamanian outlets echoing pro-Beijing themes stress economic benefits, sovereignty, and non-interference in the bilateral relationship. But partial success in driving adoption of its messages in local media could indicate scope for deepening influence in future.
Relations between Panama and the People’s Republic of China (PRC), only recently in good standing, have taken a turn for the worse in 2026. In February, Panama’s Supreme Court jolted the bilateral relationship by ruling that the concession granted to a subsidiary of the global ports, telecom, and retail conglomerate from Hong Kong, CK Hutchison, was unconstitutional. The company, controlled by the family of Li Ka-shing, had managed those ports since 1997; but its work in the canal was suspended and taken over by the government pending appeals (Caixin, January 30; BBC, January 31; 163.com, March 26).
Beijing’s reaction to the ruling was sharp. A February article signed by “Gang’ao Ping” (港澳平), the pen name for the Hong Kong and Macau Work Office of the Chinese Communist Party (CCP) Central Committee (中央港澳工作办公室), called the court decision “absurd, shameful, and lamentable” (荒谬、可耻可悲). It promised that Panama would “pay a heavy price” (将付出沉重代价) (Hong Kong and Macau Work Office, February 3). Retaliation quickly commenced. That month, Beijing halted discussions by state-owned enterprises on new projects and increased customs inspections of Panamanian imports, including bananas and coffee. Between March 8–26, Chinese port authorities detained 70 Panamanian-flagged ships in further retaliation (Lloyd’s List, March 26). While this last development was reported in Hong Kong media, mainland outlets were almost silent except to comment that the situation represented a U.S. plot to take over the canal (hk01.com, March 27).
U.S. Attempts to Roll Back Growing PRC Presence
The writing was on the wall last year, almost immediately after President Trump’s second inauguration, when Washington took measures to reverse Beijing’s gains in its bilateral relationship with Panama. In 2017, Panama had shifted its diplomatic recognition from Taiwan to the PRC in pursuit of greater trade, investment, and infrastructure opportunities. The move followed a $900 million port deal the previous year with Shandong-based Landbridge Group (岚桥集团) (Dazhong Daily, May 27, 2016; China Brief, August 7, 2023). That same year, Panama became the first Latin American nation to sign on to the One Belt One Road initiative (OBOR, 一带一路) (China Belt and Road Portal, November 21, 2017). Following its accession as an OBOR partner, the PRC pursued multiple projects in the country, such as the Amador Cruise terminal and the Panama National Convention Center (People’s Daily, September 20, 2023). Another major project, the kilometer-long Fourth Panama Canal Bridge, is under construction and due for completion in 2028 (Xinhua, November 2, 2025).
Since normalization, Panama’s engagement with the PRC has deepened, not only via infrastructure deals and OBOR participation but also through a growing Chinese media presence. Research by the Taiwan-based DoubleThink Lab, which measures PRC influence worldwide, assesses that its impact is greatest in Panama’s media, academic, technology, law enforcement, and political spheres. It assesses that it has less impact in Panama’s military or economic spheres, though acknowledges the PRC’s position in Panama’s critical infrastructure and notes that the PRC is the primary customer for its extractive industries. DoubleThink Lab also ranked Panama 12th globally and second in Latin America in terms of PRC influence, showing increased penetration by the Chinese state into Panama’s media between 2022–2025 (DoubleThink Lab, 2025, The Diplomat, January 28, 2025).
Panama was motivated to improve relations with the PRC primarily to attract investment; but Beijing appears to have approached engagement based on a mix of economic and geopolitical incentives. The oldest among these is its project of displacing Taiwan’s diplomatic presence, which has shrunk to just 12 countries worldwide (Global Taiwan Institute, January 28). This project has since evolved into a wider strategy to expand influence in “intermediate zones” (中间地区), meaning states with whom the United States does not have a formal alliance relationship, simultaneously reducing American clout and Taiwan’s diplomatic space (China Institute of International Studies [CIIS], November 9, 2021). A joint statement from President Xi Jinping and Panama’s then-president Juan Carlos Varela after their first meeting in November 2017 framed Panama as an important logistics hub in the Western Hemisphere that would benefit the OBOR, including the potential to “promote connectivity between the Eastern and Western Hemispheres” (促进东西半球互联互通) (PRC Ministry of Foreign Affairs [MFA], November 17, 2017). This appears to be part of Beijing’s wider strategy to invest in global seaports as part of a contest with Washington over supply chain dominance (South China Morning Post [SCMP], March 5).
This was the milieu in which the incoming Trump administration shifted gears on U.S. policy in 2025, pressuring Panama with a visit by Secretary of State Marco Rubio only two weeks after President Donald Trump’s January inauguration. Secretary Rubio publicly insisted that Panama reduce its economic relationship with Beijing, especially targeting CK Hutchinson’s high-profile presence in the canal (Reuters, January 31, 2025; U.S. Department of State, February 2, 2025).
Panama’s reaction was almost immediate. On the third day of Rubio’s February visit, President Mulino made his first move to lean toward the U.S. side by announcing that Panama would not renew its memorandum of understanding with the PRC under the OBOR initiative (Reuters, February 4, 2025; China Brief, March 9, 2025). In the months that followed, Panamanian officials signaled a review of PRC-linked infrastructure and technology, including possible reductions in reliance on Huawei telecommunications equipment, increased scrutiny of strategic port concessions, and reconsideration of major Chinese-backed infrastructure projects, such as rail development plans that had already stalled (China Global South Project, July 9, 2025).
Beijing’s sharp language in 2026 over the supreme court decision was an escalation from the previous year’s more diplomatic tone. Back in March 2025, a deputy director of the CCP International Liaison Department (ILD), Ma Hui (马辉), visited Panama for two days in to stabilize ties following Secretary Rubio’s visit and reinforce pro-PRC sentiment (PRC Embassy in Panama, March 16, 2025). Official statements out of Beijing expressed “deep regret” (深表遗憾) and opposed “external interference” (排除外来干扰). Although implicitly critical of U.S. pressure, the PRC avoided criticism of Panama itself (PRC MFA, February 7, 2025). PRC ambassador Xu Xueyuan (徐学渊), echoing this approach, portrayed the PRC as a “true friend” and attributed tensions to outside interference, while urging fair treatment of Chinese firms (La Estrella Panama, June 11, 2025). The supreme court decision has since prompted Beijing to pivot, though much remains at stake for the PRC in the Central American nation.
U.S. Constraints on Beijing’s Influence
PRC state-backed investment and infrastructure projects are constrained by recent American political, legal, and policy pressure, but Chinese trade and commercial presence in Panama remains. Huawei’s prior sales of telecommunications equipment to Panamanian police and security services are being displaced by an $8 million program, announced by Washington in June 2025, to replace the Chinese telecommunications giant’s equipment in government infrastructure. Huawei nevertheless appears to maintain an operating presence and corporate registration in Panama, albeit with a lower profile. Its entities in Panama City remain in place, and there is no word of its gear being replaced among commercial customers (CNA, June 13, 2025; Top Employers Institute; Del Risco, accessed April 2). According to Evan Ellis, a professor at the U.S. Army War College, the U.S.-funded replacement scheme represents a “drop in the bucket given the penetration of Huawei equipment and cloud infrastructure in Central America” (Americas Quarterly, July 21, 2025).
Figure 1: Product Placement: Ambassador Xu Xueyuan with a Huawei laptop
Washington may have moved fast since Trump entered the White House, but it faces domestic resistance in Panama. In March–April 2025, Washington secured renewed access to its former Panamanian military bases, which sparked sovereignty protests in Panama City and warnings of creeping militarization (The Guardian, April 12, 2025; AP News, May 7, 2025). The controversy highlighted Panama’s difficulty balancing its own narrative of sovereignty with great-power demands. Other popular protests continue over pension reform, mining contracts, and foreign concessions, as some Panamanians see foreign policy shifts linked to inequality and poor governance (Financial Times, June 12, 2025). Many are reminded of their simmering resentment of the U.S. each year on January 9, commemorated as Martyrs’ Day. On that date in 1964, local police and U.S. troops killed 21 Panamanians during demonstrations against the flying of American and Panamanian flags at Balboa High School in the area then called the Canal Zone (ADST, July 2016; LA Times, January 9, 2025). At the 2025 demonstrations, President Mulino said that the canal will “always be Panamanian.” Two months later, he stated that the U.S. would not be allowed to establish military bases in Panama (Xinhua Español, January 12, 2025, Xinhua, March 28, 2025).
Any criticism of U.S. presence in the country has not deterred American investors and exporters. In August 2025, Chiquita Brands announced a $30 million reinvestment in Bocas del Toro, adding 5,000 jobs, partly to stabilize relations with striking unions and reassure international stakeholders. Meanwhile, opportunities remains for American exporters in Panama’s agri-food, machinery, industrial, and pharmaceutical industries (Reuters, August 30, 2025, Trading Economics, accessed April 2).
Media and United Front Channels Carry Beijing’s Message
Media engagement, diaspora organizations, and institutional partnerships have served primarily as channels for Chinese influence in Panama, rather than overt coercion. PRC state news agency Xinhua is a consistent supplier of pro-PRC Spanish-language content in the country, and Chinese-produced documentaries and embassy-linked programming air on Panama’s popular state broadcaster SERTV. Publicly available data do not provide program-level audience figures for its PRC-produced content, but SERTV reported in 2025 that its audience had grown from roughly 80,000 to over 530,000 viewers nationwide (SERTV Panama, February 6, 2025, September 24, 2025; Instagram/sertvpanama, January 13, 2025). This indicates that Chinese programming has broad potential exposure, though it is unclear how many viewers watched those specific segments.
Print media provides another avenue. La Estrella de Panamá, one of the country’s most prominent newspapers, publishes opinion pieces by pro-PRC voices, including the PRC ambassador and the columnist Julio Yao Villalaz. These contributions generally align with Beijing’s messaging, portraying the PRC as a partner offering economic opportunity while criticizing U.S. influence (La Estrella, accessed April 2 [a], [b]).
Figure 2: PRC Embassy Cohosts Anti-Taiwan Independence Event With United Front Group in 2024
Beyond media, a spectrum of organizations—some rooted in the Chinese diaspora, others led by non-Chinese Panamanians—amplifies state-aligned narratives. The Centro Cultural China Panameño and its affiliated Instituto Sun Yat-Sen serve as hubs for the Chinese community and maintain close ties with the PRC embassy (Instituto Sun Yat-sen, accessed April 2). Originally linked to Taiwan, these institutions now reflect a clear shift toward Beijing, hosting events commemorating PRC milestones and promoting “one China” positions. This may not be an example of actual institutional takeover by the CCP, as at least one link with Taiwan survives (Wenzao University Taiwan, accessed April 2). However, normalization in 2017 was at least an inflection point for the institute, as it was for Panama’s broader economy, and appears to have since been rendered better than neutral in the continuing contest between Beijing and Taipei (La Prensa, August 8, 2017; Instituto Sun Yat-sen, accessed April 2).
Centro de Estudios Estratégicos Asiáticos de Panamá (CEEAP) illustrates a different model. Though not an ethnic Chinese organization, it plays a prominent role in disseminating PRC-aligned perspectives. Its leadership includes former diplomats, academics, and officials, and its publications and social media frequently echo PRC embassy messaging. Events co-sponsored with the embassy and publications such as Revista Asia Panamá highlight themes including opposition to U.S. “intervention” and support for deeper PRC–Panama ties (CEEAP, accessed January 10, 2024).
Diaspora organizations also contribute to influence efforts. The Panama Chinese Association and the Chinese Industrial and Commercial General Association promote cultural connection and economic ties while endorsing the CCP’s “one China” principle. More explicitly political is the Panama Overseas Chinese Peaceful Reunification Promotion Association, which has operated there for almost two decades (PRC MFA, March 29, 2011). It is part of a global network linked to the Party’s united front system, and advocates positions such as opposition to Taiwan independence and participates in international pro-PRC forums (China Brief, May 9, 2019; Alliance for China’s Peaceful Reunification USA, accessed April 2). [1]
Conclusion
The PRC’s influence in Panama is shaped by two competing forces: deep security and economic ties to the United States and the PRC’s own appeal as a source of trade and investment and a nominal proponent of preserving sovereignty and non-interference. Within these limits, Beijing has relied primarily on amplifying its messages through local partnerships and engagement with diaspora-linked networks.
In 2026, more direct U.S. pressure has caused Beijing to shift tactics, though the ultimate outcome of its more coercive behavior is yet to be determined. Facing an increasingly assertive Washington and a more reactive Beijing, Panama will likely continue hedging between the two, sustaining at least some commercial and diplomatic engagement with the PRC while preserving strategic alignment with the United States. However, Panama’s own political and economic calculations, rather than U.S. pressure, will ultimately determine the scope of Chinese influence. As President José Raúl Mulino noted in 2025, “we have a relationship with China … But our top commercial, security, tourism, and national partner is and will be the United States” (Washington Post, August 9, 2025)
The author wishes to acknowledge Vannevar Labs of Palo Alto, California and Matthew Gabriel Cazel Brazil for their assistance in the research for this article.
This article originally appeared in China Brief. Check it out here!
Matt Brazil is a Senior Analyst at BluePath Labs and a Senior Fellow at The Jamestown Foundation. He pursued Chinese studies as an undergraduate at UC Berkeley, as an Army officer with tours in Korea and NSA, and as a graduate student at Harvard in their Regional Studies East Asia program. After a stint as the China specialist for the Commerce Department’s Office of Export Enforcement, he was assigned as a Commercial Officer with the US Embassy, Beijing, where he both promoted and controlled US high technology exports to China.
Notes
[1] Several other sites for this association attract virus warnings and are not cited here.