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THE PANGOAL REPORT
Dec 03, 2018
Jiang Shixue:Xi's visit to Panama unlocks full potential of China-Panama relations
Jiang Shixue:Xi's visit to Panama unlocks full potential of China-Panama relations

It's been less than 18 months between two important events: the establishment of diplomatic ties between China and Panama in June 2017 and now, Chinese President Xi Jinping's first state visit to Panama. This is quite rare in China's diplomacy.

In November 2017, Panamanian President Juan Carlos Varela visited Beijing. It was only five months since his country made the significant diplomatic move of forging ties with China.

During President Varela's visit to China, President Xi Jinping said: "Chinese and Panamanians have had friendly exchanges for over 160 years. Forging diplomatic relations on the basis of the one-China principle meets the aspiration of generations of people in our two countries."


President Varela said he was proud to make the historic visit to China in the capacity of president, fulfilling his long-cherished wish. He also noted that his people fully approve the decision of establishing diplomatic ties with China, which is in the interests of both countries and will also promote Panama's development and improve its people's livelihood.

During this trip, President Varela received an honorary doctorate from the Renmin University, one of the most prestigious universities in China. He was also commissioned as an honorary adviser for the university's Latin American Research Center, the only Chinese center on Latin America studies supported by a head of state.

Panama has a unique geographical location. The Isthmus of Panama has been an essential trade route between the Atlantic and the Pacific. The well-known Panama Canal has played an important role in promoting China's international trade. Therefore, as early as in 1995, both countries agreed to establish commercial business development offices in their capitals.

The first group of Chinese immigrants arrived in Panama in 1854. They worked on the construction of the trans-isthmus railway, which served as the main international cargo route until the Panama Canal was opened in 1914.

At present China is the second largest user of the Panama Canal, and also the leading supplier of goods in the Colón Free Zone, the largest free trade zone in Latin America, located on the Atlantic coast of Panama.

The expansion project of the Panama Canal, which began in September 2007, was completed in June 2016 and the first ship to pass through the newly expanded waterway belonged to the Chinese cargo carrier Cosco.


Panama is also interested in China's Belt and Road Initiative (BRI). During his Beijing visit, President Varela said that the bilateral agreements on maritime, education, tourism, and aviation would not only benefit the two countries but also contribute to the peace and stability of Latin America and the world beyond.

To strengthen connectivity, one of the major characteristics of the BRI, a direct air link between two countries was launched in April this year. This will definitely shorten the time of travel, thus promoting people-to-people exchanges.

Another milestone was set in June this year. China and Panama agreed to kick off the negotiation for a free trade agreement (FTA). The fourth round of negotiation finished a few days ago, bringing two sides closer.

Central America and the Caribbean used to be the stronghold of its "international outreach" of Taiwan, an indispensable part of China. Since Tsai Ing-wen became the leader of Taiwan, three countries in the region, Panama (June 2017), Dominican Republic (May 2018) and El Salvador (August 2017) have set up diplomatic relations with the Chinese mainland under the one-China principle.


Beijing's diplomatic move has raised concern in Washington. In September, the U.S. recalled its envoys from these three countries for consultations over their decisions to establish diplomatic relations with China.

On October 4, 2018, U.S. Vice President Mike Pence said at the Hudson Institute, "Since last year alone, the Chinese Communist Party has convinced three Latin American nations to sever ties with Taipei and recognize Beijing. These actions threaten the stability of the Taiwan Strait, and the United States of America condemns these actions."

Pence's accusation is groundless. China did not "convince" anyone to make such decision, not to mention Taiwan is an inseparable part of China's territory. Panama is a sovereign country with the right to make its own decisions regarding its foreign policies. Even President Varela himself has asked the U.S. to respect their sovereign decisions as Panama does to other countries. China-Panama diplomatic relations are not driven by political games but rather fair simple reasons: the desire for economic development and improving people's lives for both countries. It is in the spirit of mutual benefit that the foundation of China-Panama relations becomes stronger.


Jiang Shixue, Academic Committee Member, the Pangoal Institution;

Distinguished Professor and Director ,Latin American Research Center, Shanghai University

Former Deputy Director, Latin American Institute, Chinese Academy of Social Sciences


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