{"id":50034472,"date":"2020-03-25T15:26:34","date_gmt":"2020-03-25T15:26:34","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=34472"},"modified":"2022-06-29T15:07:36","modified_gmt":"2022-06-29T14:07:36","slug":"34472-has-chinas-winning-streak-in-panama-ended","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/","title":{"rendered":"Has China\u2019s winning streak in Panama ended?"},"content":{"rendered":"

Frozen trade talks, failed infrastructure bids and cancelled projects suggest that Chinese companies\u2019 winning streak in Panama has come to an abrupt end. US diplomatic pressure on the government of Laurentino \u201cNito\u201d Cortizo, which took office in May last year, appears to have been effective in Latin America\u2019s most geopolitically strategic nation.\u00a0<\/span><\/p>\n

Even before previous president Juan Carlos Varela\u2019s June 2017 decision <\/span>to establish diplomatic relations with Beijing<\/span><\/a> that seemed to blindside US diplomats, Chinese firms, both state run and private, had won tenders for port concessions, power projects and convention centres. In the following 18 months the process went into overdrive. Dozens of political and commercial deals were signed, free trade talks progressed at break-neck speed and Chinese Premier <\/span>Xi Jinping made a December 2018 state visit<\/span><\/a>.\u00a0\u00a0<\/span><\/p>\n

But that visit was the high-water mark for Sino-Panamanian relations. In the US state department, the pushback had already begun.\u00a0<\/span><\/p>\n

Washington warnings<\/h2>\n

In September 2018, Washington recalled its heads of mission to Panama, the Dominican Republic<\/a> and El Salvador<\/a>, whose governments had also recognised Beijing in recent months. A month later US Secretary of State Mike Pompeo visited Panama City to warn against the \u201cpredatory economic activity\u201d of Chinese firms. US pressure put an end to China\u2019s <\/span>plans to build a giant embassy<\/span><\/a> at the mouth of the Canal.<\/span><\/p>\n

In Cortizo, the US found a more malleable ally. Despite hailing from the same political party as General Omar Torrijos \u2013 the national hero who negotiated the handover of the Canal from the US to Panama \u2013 Cortizo\u2019s administration appear to have heeded Washington\u2019s overtures.\u00a0<\/span><\/p>\n

\u201cThe positions have flipped and the US is once again is the dominant foreign player in domestic politics,\u201d says Rodrigo Noriega, a political analyst and journalist.\u00a0<\/span><\/p>\n

China has fallen out of the news and Foreign Ministry briefings. And a string of commercial decisions suggest a diminishing role.\u00a0\u00a0<\/span><\/p>\n

Infrastructure derailed<\/h2>\n

A Chinese proposal for a US$4.1 billion high speed train linking Panama City with the north of <\/span>the country was dismissed in September<\/span><\/a>. A <\/span>major electrical transmission project<\/span><\/a> on the Caribbean coast \u2013 in which a Chinese group was amongst the two qualified bidders \u2013 was cancelled and recast as a public-private partnership.\u00a0\u00a0<\/span><\/p>\n

In February, Panama Metro, the capital\u2019s rapid transport system, confirmed that <\/span>Korea\u2019s Hyundai Engineering would build the third Metro line<\/span><\/a>, a US$2.5bn 25-kilometre elevated monorail linking the centre with the western suburbs.\u00a0<\/span><\/p>\n

\n

Did you know\u2026?<\/p>\n

\n
\n3 of the 6 countries that formally established diplomatic relations with Beijing in the last 10 years were in Latin America
\n\n <\/div>\n <\/div><\/span><\/p>\n

The losing bidders, including two consortia with Chinese companies, challenged the decision, originally made in November. China Railway Group Limited offered a lower priced project but were disqualified for not meeting minimum technical requirements.<\/span><\/p>\n

\u201cIn January, no one had the slightest doubt that a Chinese firm would win the Metro tender,\u201d says Fernando Aparicio, professor of history at the University of Panama. \u201cIt\u2019s another indicator that the government wants to maintain a distance from China, or at least negotiate with China from a stronger position.\u201d\u00a0\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

A few days after the metro announcement, the Ministry of Public Works confirmed that a new bridge over the canal, awarded in July 2018 to a consortium led by China Harbour Engineering (CHEC) and China Communications Construction Company (CCCC), would be scaled back. Instead of running over the bridge, Metro line 3 will run through a tunnel 50 metres under the canal.\u00a0<\/span><\/p>\n

Rafael Sabonge, the Minister of Public Works, says the decision was made due to the discovery of a geological fault under one of the bridges\u2019 key pillars that would have led to a delay in construction and incurred larger compensation payments to third parties.\u00a0<\/span><\/p>\n

However, many remain sceptical that a tunnel under the Canal would make sense economically. <\/span><\/p>\n

\u201cI think there are two factors at play,\u201d says Noriega. \u201cThe government can\u2019t afford a delay on the bridge and there are real operational challenges for running the metro on it. But there is also a political element. The Japanese underwriters don\u2019t want to finance a project of this size for a Chinese firm to build it and the US don\u2019t want Chinese firms building directly over the Panama Canal.\u201d\u00a0<\/span><\/p>\n

the US still maintains huge clout over individual politicians, through the threat of visa denial or inclusion on the \u201cClinton list\u201d<\/p><\/blockquote>\n

Hong Kong-owned <\/span>Hutchinson Ports, the \u201cthird party\u201d operators of a port that would be most affected by the bridge\u2019s construction, publically <\/span>denied it had requested<\/span><\/a> compensation from the government for losses incurred during delays to the Chinese consortium\u2019s project.\u00a0\u00a0<\/span><\/p>\n

The port has its own problems to deal with. In 1998 the company, then known as Hutchinson-Wampoa and with 10% investment from a Chinese state firm, won the concession to operate Panama Ports Company. US Admiral Thomas H Moorer told the Senate Foreign Relations Committee that the \u201cCommunist Chinese\u201d had <\/span>\u201cvirtually accomplished\u2026a stronghold on the Panama Canal<\/span><\/a>.\u201d\u00a0<\/span><\/p>\n

In February this year, the Cortizo government announced it would <\/span>audit Panama Ports<\/span><\/a>. \u201cThere is a strong current in the government against renewing Panama Port\u2019s concession [which expires in 2022],\u201d says Aparicio.\u00a0<\/span><\/p>\n

Trade deal stalls<\/h2>\n

Meanwhile the free trade agreement, which many assumed would be rushed through by Varela before leaving office, remains unsigned and the Chinese embassy has no long-term home. The presence of Chinese engineers and businessmen has diminished. In April 2019, the first Air China flight \u2013 from Beijing via Houston \u2013 arrived in Panama City. In <\/span>February the service was suspended<\/span><\/a>.\u00a0<\/span><\/p>\n

How has the US achieved such a turn around? <\/span>
\n<\/span><\/p>\n

According to Richard Koster, an author and journalist based in Panama since the 1950s, the US still maintains huge clout over individual politicians, through the threat of visa denial or inclusion on the \u201cClinton list\u201d \u2013 a who\u2019s who of companies and individuals that profit from money laundering and drug trafficking, leading to potentially severe sanctions by US prosecutors. <\/span>
\n<\/span><\/p>\n

In May 2016 Panamanian businessman Abdul Waked\u2019s inclusion on the list swiftly led to his bankruptcy, and, Koster says, local politicians haven\u2019t forgotten it.\u00a0<\/span><\/p>\n

\u201cAnyone on the list has a type of financial leprosy,\u201d he says. \u201cPanama\u2019s politicians all come from money and have US dealings. Through visas and the Clinton list the US knows how to keep its client states honest.\u201d<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Frozen trade talks, failed infrastructure bids and cancelled projects suggest that Chinese companies\u2019 winning streak in Panama has come to an abrupt end. US diplomatic pressure on the government of Laurentino \u201cNito\u201d Cortizo, which took office in May last year, appears to have been effective in Latin America\u2019s most geopolitically strategic nation.\u00a0 Even before previous […]<\/p>\n","protected":false},"author":20000283,"featured_media":50034485,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[510,556,600,13817],"hashtags":[],"country":[20000110,50002599,50040700],"class_list":["post-50034472","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-china-in-the-world","tag-infrastructure","tag-trade","tag-us-china","country-china","country-panama","country-united-states-of-america"],"acf":[],"yoast_head":"\nHas China\u2019s winning streak in Panama ended? | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"The US noted Beijing\u2019s advances in Panama and Laurentino Cortizo has put the brakes on China and its contractors\u2019 deals\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Has China\u2019s winning streak in Panama ended?\" \/>\n<meta property=\"og:description\" content=\"The US noted Beijing\u2019s advances in Panama and Laurentino Cortizo has put the brakes on China and its contractors\u2019 trade and infrastructure deals\" \/>\n<meta property=\"og:url\" content=\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\" \/>\n<meta property=\"og:site_name\" content=\"Dialogue Earth\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-25T15:26:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-29T14:07:36+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2020\/03\/R6334T.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1333\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Joe Coroneo\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Has China\u2019s winning streak in Panama ended?\" \/>\n<meta name=\"twitter:description\" content=\"The US noted Beijing\u2019s advances in Panama and Laurentino Cortizo has put the brakes on China and its contractors\u2019 trade and infrastructure deals\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\"},\"author\":{\"name\":\"Joe Coroneo\",\"@id\":\"https:\/\/dialogue.earth\/en\/#\/schema\/person\/41b5fa6bbd3a5a4f009440478f4f316f\"},\"headline\":\"Has China\u2019s winning streak in Panama ended?\",\"datePublished\":\"2020-03-25T15:26:34+00:00\",\"dateModified\":\"2022-06-29T14:07:36+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\"},\"wordCount\":1048,\"publisher\":{\"@id\":\"https:\/\/dialogue.earth\/en\/#organization\"},\"image\":{\"@id\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/dialogue.earth\/content\/uploads\/2020\/03\/R6334T.jpg\",\"keywords\":[\"China in the world\",\"Infrastructure\",\"Trade\",\"US-China\"],\"articleSection\":[\"Business\"],\"inLanguage\":\"en\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\",\"url\":\"https:\/\/dialogue.earth\/en\/business\/34472-has-chinas-winning-streak-in-panama-ended\/\",\"name\":\"Has China\u2019s winning streak in Panama ended? 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