Panama’s President Jose Raul Mulino on Wednesday rejected China’s threat to make the Central American country pay a “heavy price” after a Hong Kong company was evicted from two ports on the Panama Canal.
Writing on X, Mulino “strongly” rejected the threat from the Beijing office overseeing affairs in semi-autonomous Hong Kong, which came after Panama’s Supreme Court invalidated CK Hutchison’s port concession.
US President Donald Trump has piled pressure on Panama to cancel Hutchison’s contract by threatening to reclaim the US-built waterway over what he claimed was China’s outsize influence on the canal.
Last week, Panama’s Supreme Court ruled that the concession was “unconstitutional” and found it had “a disproportionate bias in favor of the company” without “any justification” and to the “detriment of the State’s treasury.”
The United States hailed the ruling but China reacted angrily.
On its WeChat account, China’s Hong Kong and Macao Affairs Office accused Panama of buckling to outside pressure, Bloomberg reported.
“Panamanian authorities must recognize the situation and correct their course,” the office was quoted as saying.
“Persisting in this misguided path will result in a heavy price, both politically and economically,” it added.
Mulino condemned the threat, insisting that Panama was a country that upholds the rule of law “and respects the decisions of the judiciary, which is independent of the central government.”
He added that the foreign ministry would issue a statement on the matter “and adopt the corresponding decisions.”
The Panama Canal, which connects the Atlantic and Pacific oceans through Central America, handles about 40 percent of US container traffic.
– ‘Cold War mentality’ –
Since 1997, Hutchison has managed the ports of Cristobal on the interoceanic canal’s Atlantic side and Balboa on the Pacific side.
The concession, which reflected the growing inroads of Chinese companies into Panama’s economy, was extended for 25 years in 2021.
After Trump threatened last year to seize the canal, Panama’s independent comptroller general reviewed Hutchison’s contract and subsequently recommended it be annulled.
The Supreme Court backed the comptroller’s view that the terms of the concession ran counter to Panama’s interests.
Following the ruling, the Panamanian government tapped Danish company Maersk to temporarily take over management of the port terminals until a new concession is awarded.
Hutchison’s port concession has come to symbolize the battle for influence and trade between the United States and China in Latin America.
Beijing’s foreign ministry spokesman Lin Jian on Wednesday reiterated that China would “firmly defend the legitimate and lawful rights and interests” of Chinese companies.
Accusing the United States of a “Cold War mentality and ideological bias,” he said: “It is quite clear to the world who exactly is seeking to forcibly own the Panama Canal and eroding international law in the name of the rule of law.”
The Supreme Court ruling came amid Hutchison’s stalled effort to sell the ports.
In March, it announced plans to transfer its stake in the Panamanian terminals to a group of companies led by the US firm BlackRock, as part of a package valued at $22.8 billion.
That deal was initially seen as favorable in Washington, but interests cooled after China warned the agreement could harm its global interests and urged parties to proceed with “caution” or face legal consequences.
