Has US considered why it can’t stop China from developing in Latin America?

Illustration: Liu Rui/GT

Wang Xuguang, then a project manager at China Harbour Engineering Company, witnessed the same scene every day: cargo ships loaded with containers slowly passing through the Panama Canal, heading toward the Atlantic Ocean in the distance.

When I interviewed in Panama a decade ago, his company was building a terminal for the Taiwan company Evergreen Marine Corp. at Colón Port in Panama.

A Panamanian local half-jokingly told me that if Latin America is called the “backyard” of the US, then the location of this terminal must be regarded as the “front gate” of that backyard.

Fast forward 20 years – again, at this port, a terminal renovation project led by Hong Kong’s Hutchison Whampoa Limited drew criticism from several American politicians and media outlets. They claimed that the investment posed a potential threat to US shipping lines and pressured Washington to pay attention to the possibility of China gaining operational control over the Panama Canal. 

However, in the 2010s, China Harbour Engineering Company won the contract for this project through international bidding, and this time, no American media expressed excessive concern. 

Chinese companies and manufacturing in Panama and other Latin American countries have become commonplace.

Over the past 100 years, the canal’s operation has changed little. Yet the Panama Canal’s shipping routes have expanded from dozens to 144, now serving over 1,700 ports across 161 countries and regions. The “nationality” of the ships passing through the canal has also quietly transformed. 

When entering the top-floor exhibition hall of the Panama Canal Museum, visitors are immediately greeted by a model of a COSCO shipping vessel. Above it is a large photograph of a container-laden cargo ship passing through the canal.

Currently, China is the second-largest user of the Panama Canal, next only to the US. It is also the second-largest source of cargo using the canal and the second-largest destination for cargo transported. 

Meanwhile, the Colón Port, the world’s second-largest free trade zone after Hong Kong, has become a vital trade hub connecting China with Latin America. Over 90 percent of Chinese goods exported to the region, including neighboring countries such as the US, pass through this port. Panama has also emerged as a focal point for Chinese business investment in Latin America.

However, US President-elect Donald Trump has recently cited this development as a reason to take back control of the Panama Canal, hinting that the US cannot allow China to control such a strategically vital waterway.

On December 21, Trump posted on social media: “When President Jimmy Carter foolishly gave it away, for One Dollar, during his term in Office, it was solely for Panama to manage, not China, or anyone else.”

Panama’s President José Molino strongly condemned such hegemonic threats.

Trump’s comments emphasized the strategic significance of the Panama Canal. Still, he conveniently ignored an elementary truth – China’s growing influence in the region comes entirely from peaceful economic engagement and trade-based energy rather than military force. China has never sent a single soldier to the area.

China’s economic engagement has significantly expanded in the Caribbean, with trade volumes rising to over $11.8 billion in 2023. In the past two decades, Chinese companies have initiated major infrastructure and economic projects in Jamaica, the Bahamas, and Trinidad and Tobago.

These projects showcase how China is fostering deeper ties with the countries of Latin America and the Caribbean by emphasizing mutual economic benefits and sustainable development rather than geopolitical rivalry. 

It has delivered the material for mutual economic development, including products supporting US and Chinese trade. The development of the Caribbean region is also beneficial to the US.

Washington had no intention of calculating how much profit it had gained through the canal due to its investments and trade with China. Instead, it monitors others’ ledgers while ignoring how Latin America benefits from the trade relationship with China. What is deeply hidden here is why the US wants to, but cannot, stop China’s economic and trade relations from developing in this region.

The author is a senior editor with People’s Daily, and currently a senior fellow with the Chongyang Institute for Financial Studies at Renmin University of China. [email protected]. Follow him on X @dinggangchina

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Publish date : 2024-12-25 23:55:00

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