Aletho News

Beijing cancels Panama deals after court blocks Chinese port operations

The Cradle | February 5, 2026

Chinese authorities have asked state-owned companies to suspend talks on new projects in Panama, in response to the Central American nation’s cancellation of a contract with China’s CK Hutchison Holdings to operate two ports along its strategic canal, Bloomberg reported on 5 February.

According to sources familiar with the matter, Panama’s decision could jeopardize billions of dollars in potential Chinese investments.

Chinese authorities also asked shipping companies to consider rerouting goods through other ports if the extra cost is not prohibitive, and have stepped up inspections of Panamanian imports, such as bananas and coffee.

Chinese Foreign Ministry spokesman Lin Jian issued a statement saying that the Panamanian Supreme Court ruling “ignores the facts, violates credibility,” while harming the interests of Chinese companies.

Hong Kong-based CK Hutchison responded to the Supreme Court decision by initiating international arbitration proceedings against Panama.

CK Hutchison has operated Panama’s Cristobal and Balboa ports for decades. The ports lie at opposite ends of the Panama Canal – the strategic waterway that connects the Pacific and Caribbean Oceans, and through which roughly three percent of global seaborne trade passes.

The move comes amid US President Donald Trump’s campaign to counter Chinese influence over strategic infrastructure in the Americas.

Following his election last year, Trump argued that it was “foolish” of the US to hand over control of the canal to Panama. The US built the canal in 1904 and handed it back to Panamanians nearly a century later, in 1999.

Trump has also complained about the fees Panama charges the US to use the waterway.

Amid pressure from Washington, Panama also withdrew from China’s Belt and Road Initiative (BRI) in February last year.

At the time, Beijing stated it “firmly opposes the United States using pressure and coercion to smear and undermine Belt and Road cooperation. The US side’s attacks … once again expose its hegemonic nature.”

Twenty Latin American nations have participated in the BRI since Beijing initiated it in 2013.

Current Chinese infrastructure projects in Panama include a $1.4-billion bridge over the canal, a cruise terminal constructed by China Harbour Engineering Co., and a segment of a metro line by China Railway Tunnel Group Co.

In Latin America, Trump is seeking to revive the 200-year-old Monroe Doctrine. It states that Washington will not allow European powers to interfere in the Western Hemisphere as they had in colonial times, asserting that the region would be regarded as a sphere of US interest.

Trump used the doctrine as one of his justifications for bombing Venezuela and abducting its president, Nicholas Maduro, on 3 January.

The US president claimed that Maduro was hosting “foreign adversaries in our region” and acquired “menacing offensive weapons that could threaten U.S. interests and lives.”

February 5, 2026 - Posted by aletho | Economics, Sinophobia | China, Latin America, Panama, United States