China's involvement What Trump is right about with the Panama Canal

Donald Trump is threatening to seize the Panama Canal militarily if necessary - because of China. In fact, a Hong Kong company operates the ports at the end of the waterway. An expert explains how this should be classified.

China has been pushing ahead with the New Silk Road project since 2013. This Belt and Road Initiativeis an infrastructure project designed to promote trade, but also to strengthen Beijing's influence abroad. Critics complain that countries are falling into a debt trap as a result of the externally financed large-scale projects and are becoming dependent on China.

Part of the concept is to buy and expand ports along the various routes and sometimes connect them to the hinterland by road or rail. Chinese companies have therefore invested in infrastructure in coastal cities such as Colombo in Sri Lanka, Gwadar in Pakistan and Piraeus in Greece.

In 2018, Panama became the first South American country to join the initiative. Chinese companies have been active in the country for some time: Panama granted a Hong Kong company the concession to operate the ports of Balboa and Cristóbal back in 1996. The company in question is CK Hutchison Holdings, owned by billionaire Li Ka-shing.

His group now includes Hutchison Port Holdings, which operates ports in Alexandria, Buenos Aires, Duisburg, Rotterdam and Sydney in addition to the ports in Panama. Balboa and Cristóbal are located at the Pacific and Atlantic ends of the Panama Canal respectively.

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In 1999, the USA still had no problem

However, the USA sees no problem with this: In 1999, the State Department wrote that there were no findings that China could become a threat to the canal. There was also no evidence that Beijing was trying to control the waterway. The neutrality of the Panama Canal is guaranteed by treaty, it continues.

However, influence is still exerted indirectly: in 2017, for example, Panama revoked its recognition of Taiwan. In the same year, the connection to the New Silk Road was initiated. In 2021, the Centre for Strategic and International Studies wrote that both of these had "increased China's already existing footprint on the canal".

So is Trump right? Can Beijing influence what happens on the waterway between the Atlantic and Pacific via Hutchison Port Holdings? "You don't have to enter these ports at all, but stop at certain stopping points before entering the canal," explains a shipping agent when asked by blue News.

"The Chinese actually have nothing to say"

And: "Actually, the Chinese have nothing to say," she summarizes. But: "Of course, their influence is increasing. When the Chinese buy ports and terminals, such as in Hamburg, they also decide who can dock there. But that has nothing to do with the Panama Canal itself."

Panama has extended the lease for the port of Cristobal with Hutchison Port Holdings for 25 years in 2021, but now everything is different: Trump's accusation that the country has left the canal to the Chinese has consequences: Panama has renounced the New Silk Road, causing outrage in Beijing.

The USA was thereby demonstrating its "hegemonic nature", it continued. At the same time, China "supports Panama's sovereignty over the canal. And it could get even worse: According to "Bloomberg", Panama is now even considering terminating the leases of the two ports.

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So Trump is right that the Chinese have been investing in the infrastructure of the Panama Canal since the 1990s. However, it is not clear that they have any influence on the waterway itself. Nevertheless, the US president's political pressure is paying off, his supporters will point out. Whether he has the right to act this way is another question.