China Condemns U.S. Pressure After Panama Cancels Infrastructure Deal

Beijing on Friday condemned what it called U.S. "coercion" after Panama decided not to renew a crucial infrastructure agreement with Beijing. This follows Washington's threat to reclaim control of the Panama Canal. Foreign Ministry spokesperson Lin Jian expressed strong disapproval during a briefing, stating that China "firmly opposes the U.S. smearing and undermining the Belt and Road cooperation through means of pressure and coercion."

The Belt and Road Initiative: A Global Partnership

The Belt and Road Initiative is President Xi Jinping's flagship foreign policy endeavor aimed at strengthening ties between China and countries across the globe by developing interconnected networks of roads, railways, airports, power plants, and other infrastructure. While the program has successfully completed several major projects, it has also sparked concerns regarding debt sustainability and environmental impact.

Panama's Decision: A Diplomatic Shift

Panama's decision to withdraw from the agreement was perceived as a concession to U.S. pressure concerning its influence over the canal. This followed a warning issued by U.S. Secretary of State Marco Rubio to Panamanian leader José Raúl Mulino on Sunday. Rubio emphasized that Panama must reduce what President Donald Trump claims is Chinese influence in the canal area or face potential retaliation from the United States.

Mulino, however, has firmly rejected pressure from the new U.S. administration to discuss ownership of a waterway crucial to global trade. On Wednesday, he vehemently denied a claim made by the U.S. State Department the previous day that an agreement had been reached for U.S. military vessels to transit the canal free of charge. Mulino labeled the U.S. statement as "based on a falsity. And that's intolerable."

U.S. Position: Protection and Responsibility

Rubio, responding to Mulino's remarks on Thursday, asserted that he was clear about his discussions with Panamanian leaders, adding, "I respect very much the fact that Panama has a process of laws and procedures that they need to follow." He underscored the U.S.'s treaty obligation to protect the Panama Canal from attack, stating, "That treaty obligation would have to be enforced by the armed forces of the United States, particularly the U.S. Navy. I find it absurd that we would have to pay fees to transit a zone that we are obligated to protect in a time of conflict."

Potential Compromise: Reevaluating Canal Operations

Despite Mulino's firm stance, some believe Panama might be open to a compromise involving the transfer of canal operations from the Hong Kong-based Hutchison Ports company. This company was awarded a 25-year no-bid extension to manage the canal, but an audit into the suitability of that extension is currently underway in Panama. This audit could potentially lead to a rebidding process.

A recent drought has caused a decline in water levels within the canal, leading to slower transit times and further complaints from President Trump. However, these delays appear unrelated to China.

China's Perspective: Regret and Hope for Resolution

Lin stated that the Belt and Road Initiative had garnered "active participation" from over 150 countries and brought "fruitful results" to both Panama and China, although he provided no specific examples. He expressed hope that Panama would consider the broader context of the bilateral relationship and the long-term interests of both nations, resist external interference, and make the right decision.