Why Panama Canal Sparked War of Words Between China and the Americas
Summary
Tensions have grown between China and several Latin American countries after China increased inspections of ships flying Panama’s flag. This action is seen as a response to Panama’s decision to cancel contracts for two ports previously managed by a Hong Kong-based company linked to China. The United States and five Latin American countries have expressed concern over China’s measures, which China says are routine inspections.Key Facts
- China increased inspections of Panama-flagged ships in March, detaining 91 out of 123 ships inspected.
- The inspections followed Panama’s Supreme Court canceling port contracts held by a Hong Kong-based company, Panama Ports Company (PPC).
- Five Latin American and Caribbean countries plus the United States issued a joint statement criticizing China’s actions.
- Panama’s Supreme Court cited irregularities in the contracts that lasted since 1997 for the Balboa and Cristóbal terminals.
- Panama Ports Company claims the cancellation is unlawful and is seeking legal action, estimating damages over $2 billion.
- China says inspections are normal and accuses the U.S. of politicizing the issue.
- The Panama Canal is a crucial trade route, handling about 5% of global shipping and 40% of U.S. container traffic.
- The U.S. government, including President Trump’s administration, has warned about growing Chinese influence in Panama.
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