China has lodged a formal protest with Panama following its decision to withdraw from Beijing’s Belt and Road Initiative (BRI), a global infrastructure and investment project. The move comes amid mounting pressure from the United States, which has expressed concerns over China’s growing influence in the region, particularly around the strategically vital Panama Canal.
China’s Diplomatic Response
On Friday, Chinese Assistant Foreign Minister Zhao Zhiyuan summoned Panama’s ambassador to Beijing, Miguel Humberto Lecaro Barcenas, to express China’s “deep regret” over the decision. Zhao emphasized that China hopes Panama will “stay away from external interference and make the right decision based on the overall situation of bilateral relations and the long-term interests of the two peoples.”
Zhao also criticized the United States for its role in the matter, stating, “China resolutely opposes the arbitrary actions of the US to undermine China-Panama relations and tarnish and disrupt cooperation in jointly building the [Belt and Road Initiative] through pressure and threats.” He reiterated that China-Panama relations are not directed at any third party and should not be influenced by external forces.
Panama’s Decision
Panamanian President José Raúl Mulino confirmed the withdrawal on Thursday, stating that the required 90-day notice had been given. Mulino questioned the benefits of the BRI for Panama, asking, “What are the great things that this Belt and Road Initiative has brought to the country?”
The decision followed a meeting between Mulino and US Secretary of State Marco Rubio, who expressed concerns about China’s influence over the Panama Canal. Rubio warned that the US would take “measures necessary” if Panama did not address what Washington perceives as China’s growing control over the canal.
US Concerns and Strategic Interests
The Panama Canal, a critical global trade route, has long been a focal point of US strategic interests. Rubio has publicly emphasized the need for the US to remain “vigilant in protecting” the canal, stating that Washington “cannot and will not” allow China to increase its control over the waterway.
US President Donald Trump has also repeatedly expressed a desire to regain control of the canal, a sentiment he reiterated during his re-election campaign and inauguration speech. Trump’s administration has been vocal about countering China’s global influence, particularly through initiatives like the BRI.
China’s Presence in Panama
While China’s direct involvement in the Panama Canal is limited to a bridge construction project awarded to state-owned China Harbour Engineering Company, Hong Kong-based Hutchison Ports operates two key ports at the canal’s Atlantic and Pacific exits. These investments have raised concerns in Washington about China’s strategic foothold in the region.
Economic Ties and Global Implications
Panama, which joined the BRI in November 2017 as the first Latin American country to do so, has deep economic ties with the United States. The US dollar is Panama’s primary currency, and more than 70% of ships passing through the canal are either coming from or headed to US ports.
China’s foreign ministry has previously accused the US of attempting to “discredit and undermine” BRI cooperation through “pressure and coercion.” Some analysts suggest that Washington’s actions are part of a broader strategy to safeguard the dominance of the US dollar and counter the rise of alternative economic blocs, such as the BRICS group of emerging economies.
In December, Trump threatened to impose 100% tariffs on BRICS members if they moved to create a currency to rival the US dollar, highlighting the geopolitical stakes involved.
China’s Appeal to Panama
Zhao argued that the BRI has brought “tangible benefits” to Panama and its people, warning that reversing course on the initiative “is not in line with Panama’s fundamental interests.” He urged Panama to consider the long-term benefits of its partnership with China and resist external pressures.
As geopolitical tensions between the US and China continue to escalate, Panama’s decision to withdraw from the BRI underscores the challenges smaller nations face in navigating the competing interests of global powers. The move also highlights the broader struggle for influence in Latin America, a region increasingly caught in the crossfire of US-China rivalry
