Beijing — China has strongly condemned a recent ruling by Panama’s high court that challenges the rights of a Hong Kong-based company to operate key ports at the Panama Canal, vowing that Panama will “pay a heavy political and economic price” if the decision is not reversed. The dispute underscores the escalating geopolitical competition between China and the United States for influence in the Western Hemisphere.
The controversy centers on Hutchison Ports, a multinational company based in Hong Kong and its concession to operate terminals at both ends of the Panama Canal. Panama’s Supreme Court deemed the concession unconstitutional in a ruling delivered late last month, a decision that has triggered a sharp response from Beijing. The court’s decision follows an audit initiated after pressure from the administration of US President Donald Trump.
Beijing’s office overseeing Hong Kong affairs released a scathing statement, describing the ruling as “truly shameful and pathetic” and accusing the court of “succumbing to hegemony and acting as an accomplice to evil.” The statement further asserted China’s opposition to “the use of economic coercion and hegemonic bullying.”
The dispute is the latest development in a broader pattern of Chinese investment and engagement in Latin America, a region where Beijing has cultivated significant economic ties. China’s trade with Latin America and the Caribbean now exceeds $500 billion annually, with state-owned firms and national champions playing an increasingly prominent role in the region’s infrastructure and economy.
The US, under President Trump, has made a strategic priority of countering Chinese influence in its traditional sphere of influence. Trump has repeatedly claimed, falsely, that China “is operating the Panama Canal,” and vowed to “take it back.” The administration views the Panama Canal as a strategically vital asset and seeks to prevent “non-Hemispheric competitors” from controlling it.
Hutchison Ports is not a Chinese state-owned enterprise, but a global port operator controlled by Hong Kong’s richest man, Li Ka-shing. The company has defended its operations, and Beijing has dismissed allegations of interference in the canal’s operations. However, the situation has been complicated by the company’s announcement last spring that it would sell its interests in more than 40 ports across two dozen countries, including the two near the Panama Canal, to a group led by US firm BlackRock – a deal praised by Trump.
The sale, however, appears to have stalled following the recent court ruling. Beijing has stated it will “conduct reviews and supervise” any asset sale by Hutchison Ports, raising questions about the future of the deal. Panama’s decision to withdraw from China’s Belt and Road Initiative in 2023, following pressure from the US, further illustrates the escalating tensions.
Hutchison Ports has launched arbitration against Panama, framing the ruling as part of a state “campaign” against it. Beijing has warned that Panama will “suffer the consequences” of the ruling, which it claims will “cause profound damage” to the country’s business environment and economic development. Analysts suggest Beijing may consider economic measures in response, but also recognize the need to balance asserting its interests with maintaining stability in its relations with the US, particularly ahead of an expected visit by Trump later this spring.
The situation highlights the broader strategic challenge facing China as it navigates its growing engagement in Latin America and the Caribbean. While Beijing seeks to expand its economic and political influence in the region, it must also contend with the US’s efforts to push back against Chinese expansion and maintain its own dominance in the Western Hemisphere. The outcome of the Panama Canal dispute will likely serve as a bellwether for the future of this competition.
