Chinese Vice Foreign Minister Zhao Zhiyuan expressed that Panama recently announced the termination of the Belt and Road Initiative (BRI) Memorandum of Understanding, and the Chinese side is deeply saddened by this as well. Zhao also noted that the pragmatic cooperation between China and Panama within the framework of the BRI has been developing rapidly in various sectors and has achieved several fruitful results, bringing tangible benefits to Panama and its people.
Zhao also enounced that China-Panama relations have never been targeted at any third party and should not be disturbed by any third party, adding that he hopes that Panama will terminate the foreign interference and make the right decision based on the overall state of bilateral relations and the long-term interests of the two nations.[1]
Within the scope of BRI, many countries, including Panama, have benefited from opportunities such as infrastructure investments, employment opportunities, and financing support, and thus have increased the development of their countries with various ports, highways, energy projects, the development of transportation networks, access to international markets and their integration, information, and technology transfer. China’s increasing contacts with both Caribbean and Latin American countries and infrastructure projects have led the United States (USA) to be concerned about geopolitical balances, taking into account their cooperation in the region. In addition, the fact that the area has more alternatives in the international arena has caused the United States to adopt a competitive strategy. Consequently, it has enabled to make economic and political decisions aimed at maintaining its influence in the region.
Chinese Foreign Ministry Spokesman Lin Jian enounced at a regular press briefing that they strongly oppose US actions to sabotage BRI cooperation through pressure and deeply regret Panama’s decision. Moreover, they stated that they support Panama’s sovereignty over the canal and are committed to maintaining the canal’s status as a permanently neutral international waterway.[2]
Panama’s decision to leave the BRI can be considered both as a move to strengthen its relations with the United States and the West, as well as to consolidate the US-China rivalry in the region. Although China is not trying to dissuade Panama from its decision, it may seek regional balance against possible US influence in the area by deepening its economic and diplomatic ties with other countries in the region. In addition, there is a high probability of economic measures such as the limitation of bilateral trade between China and Panama. On the contrary, the United States may pursue a strategy to limit China’s activity in the region, especially within the framework of security cooperation with Panama. Thus, it can gain an advantage in its global competition with China. In addition, Panama’s departure from the BRI and changing the commercial dynamics on the canal may reduce China’s commercial advantages and disrupt port projects in the region.
Considering the role of the Panama Canal in the global economy, Panama has a geostrategic importance for both the United States and China. Because the canal is an important transit point in the commercial waterways of the United States and one of the main routes that accelerate Asia-Latin America trade. The secession of Panama from BRI, a strategic trade base that allows China to reach Brazil, Chile and Argentina, will negatively affect its long-term plans in Latin America. Not only China’s infrastructure projects in Panama, but also other investment plans in Latin America will be affected by this situation. In fact, the gradual decline of China’s effectiveness in the region will affect the approaches of other countries in the region to cooperation under the BRI and the reliability of Chinese companies. At this time, countries such as Mexico, Argentina, Chile, and Colombia, which want to maintain their trade and diplomatic cooperation in a balanced and impartial manner, will try to protect their economic interests.
With Panama’s secession from the BRI, China’s economic activity in the region will decrease, while the United States will have the opportunity to increase its commercial power and increase its commercial activity in the region, which forms a connecting point between the American continents. China, on the other hand, will focus on the development of infrastructures in Mexico and Brazil and will try to create long-term alternative routes. Thus, the countries in the region will have to choose sides by finding themselves in the middle of a trade deconfliction while trying to achieve a balance between the US and China. Panama’s decision to leave the BRI, which will also change the global trade balances, will cause the US-China competition, which has recently intensified in the field of economics and technology, to be observed more clearly in Latin America.
As a result, Panama’s decision to leave the BRI is of critical importance for the international balance of power and the future role of the region. The US trade and security-oriented cooperation with Panama and China’s efforts to strengthen its relations with other Latin American countries will deepen this competition by creating another pillar of the US-China rivalry and reshaping the balance in the region. Although Panama tries to follow a policy of decoupling between the two countries, the Panama Canal, through which world trade passes, will make it necessary to develop new strategies for economic competition. Therefore, this decision taken by Panama is important for changing the dynamics in the international arena and guiding the global economy and will require the country to develop new strategies in its domestic and foreign policies.
[1] “China lodges solemn representations to Panama over withdrawal from BRI cooperation with China”, Xinhua News Agency,https://english.news.cn/20250208/8bfd47d0f3704d01a151e9810e8052d9/c.html, (Accessed: 08.02.2025).
[2] “China urges Panama to make right decision on participation in BRI”, Xinhua News Agency, https://english.news.cn/20250207/2277078b407b4c5495c7691aa9615852/c.html, (Accessed: 08.02.2025).
